Page 190 - Accelerating out of the Great Recession

A NEW MANAGERIAL MIND-SET

In the face of such uncertainty, it becomes harder to build
clarity around direction and focus—and there is a bias toward
the short term. As a consequence, investment programs are typ-
ically the first things to be cut back—often with insufficient
thought or reprioritization.
So how can companies overcome these obstacles? Strong
leadership—which serves to create a climate in which the risk
of failure does not overwhelm real opportunities—obviously
helps. Even when funds are short, it is still important to allow
experiments and pilot programs to flourish. Keep in mind that
every dollar invested has even more impact as competition
scales back. One company close to bankruptcy invested in the
development of a new product, in this instance a computer
game, that turned out to be the source of a multibillion-dollar
revenue stream.
Celebrating success and recognizing (positively) heroic fail-
ure—and rewarding both accordingly—are important. This
approach can be supported by setting sensible metrics over real-
istic time frames. After that, the difference between success and
failure lies in the execution. How well does the company under-
stand the potential of new markets for existing products? Have
the recession and the company’s response to its aftermath cre-
ated new compromises for customers in the way the company
now undertakes its business? Does the conventional industry
wisdom need challenging in light of economic developments
and emerging new realities? And which elements of business
economics can be fundamentally challenged in order to change
the competitive rules of the game?
Such approaches do work. For example, challenging funda-
mental business economics has led to innovative business mod-
els such as low-cost airlines as well as online and telephone sales

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