Management | Strategy |
BOOK REVIEW: Planning for TurbulenceBy
Airlines ask you to keep your seat belt fastened any time you’re in your seat as a precaution against turbulence. But how do businesses cope with turbulence? Running a business with “seat belts fastened” probably isn’t a good idea, but being prepared for turbulence will help your company survive.
In Winning in Turbulence, Darrell Rigby talks about how to handle business turbulence and use it in a positive way. First define a starting point. Rigby suggests looking at three dimensions—industry impact, strategic position, and financial strength—and identifies tools and methods that could be used before turbulence even occurs (e.g., looking closer at costs, sales figures, and prices). To strengthen the organization, clarify roles and processes in the company, put the right people in the right roles, and manage the company culture actively.
To improve performance, look for process improvements and identify and eliminate bottlenecks. Streamlining is key during turbulence. If companies keep an eye on factors like performance improvement, process improvement, and so on, they will less likely experience turbulence. And if they do experience turbulence, the effects won’t be as dire as for a company that’s unprepared.
In regard to acquisitions and partnerships, it’s essential to consider time as a factor. A reactive company is in a weaker position than a company that’s actively screening the market. Cultivated relationships with competitors, customers, and suppliers can be a factor if an acquisition or joint venture overcomes turbulence. Making the wrong decision under pressure can put an entire company at risk.
Rigby’s overall message is to be prepared. If a partnership is a suitable solution, I know from experience how important it is to know all about the potential partner. The faster you deliver the information, the earlier the deal can be closed.
In my own career, I’ve dealt with several due diligence situations, and I learned that the process is less stressful and quicker if relevant data is updated continuously. My company now has a PDF data room that is updated regularly—and, in this case, updating means having an eye on the processes, methods used, and sales figures. If turbulence occurs, we won’t be caught off guard.
If you haven’t had to deal with due diligence before but want to be prepared, this book will help you get started and show you which information might be relevant for steering a company, for decision making, and for ultimately winning in turbulence.