BCG Expert: Mgmt Imperatives for 2011 and Beyond
Got this interesting press release from the folks at BCG
Media Advisory: BCG’s Management Imperatives for Outperforming Your
Rivals in a Slow-Growth Economy Executives Should Adopt a New Managerial Mindset, Say David Rhodes and
Daniel Stelter in Accelerating out of the Great Recession: How to Win
in a Slow-Growth Economy, a New Book Offering a Blueprint for Success
After the Great Recession NEW YORK, NY–(Marketwire – April 21, 2010) – Business leaders need to
rethink the way they run their companies in order to capitalize on a
series of “new realities” affecting business life in the wake of the
Great Recession, according to David Rhodes and Daniel Stelter in
Accelerating Out of the Great Recession: How to Win in a Slow-Growth
Economy (McGraw-Hill, 2010). The authors, senior partners at The Boston Consulting Group (BCG),
warn that business leaders face troubles ahead as the global economy
emerges from a sluggish recovery. But they also outline a way forward,
offering a blueprint for success in the aftermath of the Great
Recession. The emergence of a series of “new realities” of business life —
including the rise of government involvement in corporate affairs, the
changing nature of globalization, and the decline of shareholder power
— means that business leaders need to reassess their approach to
running the company. The BCG authors are available to discuss what they believe it will
take to accelerate forward during the long and difficult recovery
period ahead. It All Begins with a New Managerial Mindset For many companies, the climb out of the prolonged period of slow
growth will be even more painful than the initial shock of the Great
Recession. Margins remain razor thin — and to survive and win,
business leaders need a new mindset, which includes: Developing a new style of personal leadership. In times of
uncertainty, people are even hungrier for information. Managers need
to be honest and visible while calling for clear ownership and
deadlines for projects and tasks.
Rethinking what globalization may mean. Managers need to consider how
the changes in the global economy will affect their businesses.
Globalization will play out differently from the way most people
thought it would just a couple of years ago.
Honing political skills. Government intervention is likely to rise,
and workers, like politicians, are likely to regain some of the power
lost in the past decades.
Challenging the existing shareholder-value mantra. As companies move
away from quarter-to-quarter earnings and toward a longer-term
approach, they will need a greater focus on other stakeholders,
including their workforce and customers.
Reassessing compensation systems. Compensation systems will have to
emphasize the long term, reward relative and not absolute performance,
track measures that executives can influence, and move away from basic
P&L metrics. Managers will also have more “skin in the game” as their
share in downside risk increases.
Always being ready to mobilize for growth. Uncertain times lead to a
more risk-averse culture. However, executives will need to push
against this sentiment in order to prevent it from taking hold.
Recognizing and even celebrating not only successes but also heroic
failures will help prevent retreat. The authors also say that business leaders need to take significant
steps to protect their business fundamentals and to make smart, bold
investments in the future. In making these recommendations, they draw
on the experiences of companies that survived and thrived during the
Great Depression, the stagflation in the United States in the 1970s,
and Japan’s so-called Lost Decade. The Best Defense Is a Good…Defense As part of the new mindset, managers must work hard to protect the
company’s financial and business fundamentals. Renegotiate with suppliers. Locking in better terms can help ensure
survival in difficult times. For example, during the Great Depression,
F.W. Woolworth was able to shorten its contract periods with suppliers
from six months to 60 days to take advantage of falling prices.
Protect the company’s cash position. Lending standards have tightened
significantly despite government intervention.
Refocus inventory management practices. Inventories need to be aligned
with economic forecasts and the external environment in order to
mitigate the risk of inflation and exchange rate fluctuations.
Reduce debt levels. Financing and refinancing will continue to be more
difficult, so companies should reduce debt levels. Nonetheless, there
is an opportunity to take advantage of low interest rates, as
McDonald’s did in the early 1970s when it pushed past Burger King.
Drive down costs — particularly over the long term. Reducing
complexity, improving efficiency, and diversifying the supplier base
are the key ways to control costs.
Employ strategic pricing. Managers should consider simplifying or
unbundling products as a means of adjusting prices. Another option is
to lock in customers and push for additional, higher-margin add-ons
and services. A Good Defense Isn’t Enough: A Great Offense Is Critical, Too Few battles are won simply by standing your ground. Companies still
need to remain innovative and aggressive to move out of the economic
doldrums. Stay or become laser-focused on innovation. R&D dollars, while always
important, pay an even greater dividend in downturn periods.
Capitalize on consumer changes. During slow-growth periods and
recessions, customers are more likely to change their spending
patterns. Managers must not neglect marketing research or its twin —
targeted advertising and communications. These are usually the first
places companies look for cost-cutting measures.
Secure a deeper understanding of government intervention programs.
Companies need to know and, to the extent possible, influence where
government money will be spent and when the government will end or
reduce its stimulus spending.
Take the fight to competitors. Flexible companies can change the
competitive environment by attacking competitors and coming out on
top.
Invest in the future–and divest from the past. Gaining key low-cost
assets can change the competitive landscape and eliminate smaller
competitors though acquisitions. Less strategic and profitable pieces
can also be jettisoned, freeing up capital to spend on any new
opportunities. To learn more about Accelerating Out of the Great Recession or arrange
an interview with David Rhodes or Daniel Stelter, please contact
Katarina Wenk-Bodenmiller at + 1 212 255 8386 or at
katarina@sommerfield.com. About the Authors David Rhodes is a senior partner at The Boston Consulting Group and
the global leader of the firm’s Financial Institutions practice. Since
joining BCG in 1985, he has worked primarily on projects involving
major strategy and organizational change in large financial
institutions, working with clients in Europe, Asia-Pacific, the Middle
East, and the United States. Daniel Stelter is a senior partner at The Boston Consulting Group and
the global leader of the firm’s Corporate Development practice. He is
also a member of BCG’s Executive Committee. During his 19 years with
BCG, he has participated in and directed many projects throughout
Europe with a focus on corporate finance (including M&A, IPOs, due
diligence, strategic alliances, and joint ventures) and strategy
(including portfolio strategy and value management). About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting
firm and the world’s leading advisor on business strategy. We partner
with clients in all sectors and regions to identify their
highest-value opportunities, address their most critical challenges,
and transform their businesses. Our customized approach combines deep
insight into the dynamics of companies and markets with close
collaboration at all levels of the client organization. This ensures
that our clients achieve sustainable competitive advantage, build more
capable organizations, and secure lasting results. Founded in 1963,
BCG is a private company with 69 offices in 40 countries. For more
information, please visit www.bcg.com.
Rivals in a Slow-Growth Economy Executives Should Adopt a New Managerial Mindset, Say David Rhodes and
Daniel Stelter in Accelerating out of the Great Recession: How to Win
in a Slow-Growth Economy, a New Book Offering a Blueprint for Success
After the Great Recession NEW YORK, NY–(Marketwire – April 21, 2010) – Business leaders need to
rethink the way they run their companies in order to capitalize on a
series of “new realities” affecting business life in the wake of the
Great Recession, according to David Rhodes and Daniel Stelter in
Accelerating Out of the Great Recession: How to Win in a Slow-Growth
Economy (McGraw-Hill, 2010). The authors, senior partners at The Boston Consulting Group (BCG),
warn that business leaders face troubles ahead as the global economy
emerges from a sluggish recovery. But they also outline a way forward,
offering a blueprint for success in the aftermath of the Great
Recession. The emergence of a series of “new realities” of business life —
including the rise of government involvement in corporate affairs, the
changing nature of globalization, and the decline of shareholder power
— means that business leaders need to reassess their approach to
running the company. The BCG authors are available to discuss what they believe it will
take to accelerate forward during the long and difficult recovery
period ahead. It All Begins with a New Managerial Mindset For many companies, the climb out of the prolonged period of slow
growth will be even more painful than the initial shock of the Great
Recession. Margins remain razor thin — and to survive and win,
business leaders need a new mindset, which includes: Developing a new style of personal leadership. In times of
uncertainty, people are even hungrier for information. Managers need
to be honest and visible while calling for clear ownership and
deadlines for projects and tasks.
Rethinking what globalization may mean. Managers need to consider how
the changes in the global economy will affect their businesses.
Globalization will play out differently from the way most people
thought it would just a couple of years ago.
Honing political skills. Government intervention is likely to rise,
and workers, like politicians, are likely to regain some of the power
lost in the past decades.
Challenging the existing shareholder-value mantra. As companies move
away from quarter-to-quarter earnings and toward a longer-term
approach, they will need a greater focus on other stakeholders,
including their workforce and customers.
Reassessing compensation systems. Compensation systems will have to
emphasize the long term, reward relative and not absolute performance,
track measures that executives can influence, and move away from basic
P&L metrics. Managers will also have more “skin in the game” as their
share in downside risk increases.
Always being ready to mobilize for growth. Uncertain times lead to a
more risk-averse culture. However, executives will need to push
against this sentiment in order to prevent it from taking hold.
Recognizing and even celebrating not only successes but also heroic
failures will help prevent retreat. The authors also say that business leaders need to take significant
steps to protect their business fundamentals and to make smart, bold
investments in the future. In making these recommendations, they draw
on the experiences of companies that survived and thrived during the
Great Depression, the stagflation in the United States in the 1970s,
and Japan’s so-called Lost Decade. The Best Defense Is a Good…Defense As part of the new mindset, managers must work hard to protect the
company’s financial and business fundamentals. Renegotiate with suppliers. Locking in better terms can help ensure
survival in difficult times. For example, during the Great Depression,
F.W. Woolworth was able to shorten its contract periods with suppliers
from six months to 60 days to take advantage of falling prices.
Protect the company’s cash position. Lending standards have tightened
significantly despite government intervention.
Refocus inventory management practices. Inventories need to be aligned
with economic forecasts and the external environment in order to
mitigate the risk of inflation and exchange rate fluctuations.
Reduce debt levels. Financing and refinancing will continue to be more
difficult, so companies should reduce debt levels. Nonetheless, there
is an opportunity to take advantage of low interest rates, as
McDonald’s did in the early 1970s when it pushed past Burger King.
Drive down costs — particularly over the long term. Reducing
complexity, improving efficiency, and diversifying the supplier base
are the key ways to control costs.
Employ strategic pricing. Managers should consider simplifying or
unbundling products as a means of adjusting prices. Another option is
to lock in customers and push for additional, higher-margin add-ons
and services. A Good Defense Isn’t Enough: A Great Offense Is Critical, Too Few battles are won simply by standing your ground. Companies still
need to remain innovative and aggressive to move out of the economic
doldrums. Stay or become laser-focused on innovation. R&D dollars, while always
important, pay an even greater dividend in downturn periods.
Capitalize on consumer changes. During slow-growth periods and
recessions, customers are more likely to change their spending
patterns. Managers must not neglect marketing research or its twin —
targeted advertising and communications. These are usually the first
places companies look for cost-cutting measures.
Secure a deeper understanding of government intervention programs.
Companies need to know and, to the extent possible, influence where
government money will be spent and when the government will end or
reduce its stimulus spending.
Take the fight to competitors. Flexible companies can change the
competitive environment by attacking competitors and coming out on
top.
Invest in the future–and divest from the past. Gaining key low-cost
assets can change the competitive landscape and eliminate smaller
competitors though acquisitions. Less strategic and profitable pieces
can also be jettisoned, freeing up capital to spend on any new
opportunities. To learn more about Accelerating Out of the Great Recession or arrange
an interview with David Rhodes or Daniel Stelter, please contact
Katarina Wenk-Bodenmiller at + 1 212 255 8386 or at
katarina@sommerfield.com. About the Authors David Rhodes is a senior partner at The Boston Consulting Group and
the global leader of the firm’s Financial Institutions practice. Since
joining BCG in 1985, he has worked primarily on projects involving
major strategy and organizational change in large financial
institutions, working with clients in Europe, Asia-Pacific, the Middle
East, and the United States. Daniel Stelter is a senior partner at The Boston Consulting Group and
the global leader of the firm’s Corporate Development practice. He is
also a member of BCG’s Executive Committee. During his 19 years with
BCG, he has participated in and directed many projects throughout
Europe with a focus on corporate finance (including M&A, IPOs, due
diligence, strategic alliances, and joint ventures) and strategy
(including portfolio strategy and value management). About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting
firm and the world’s leading advisor on business strategy. We partner
with clients in all sectors and regions to identify their
highest-value opportunities, address their most critical challenges,
and transform their businesses. Our customized approach combines deep
insight into the dynamics of companies and markets with close
collaboration at all levels of the client organization. This ensures
that our clients achieve sustainable competitive advantage, build more
capable organizations, and secure lasting results. Founded in 1963,
BCG is a private company with 69 offices in 40 countries. For more
information, please visit www.bcg.com.
Gautam Ghosh 
Hwoa..thats a very detailed write up. Sorry I did not have time to read it full. Bookmarked for the time being. That Social Media network analysis was nice.