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Quick Links & Good Ideas, March 2010

Navigating “The Recovery”
Late last year we offered our thoughts in Surviving the Upturn... Be "The Other" as both an article and a webinar.

The recent Kellogg Private Equity conference was entitled “Partnering through Uncertainty,” and last week’s meeting of the University of Illinois Family Business Council centered on a panel discussion entitled “Leadership in the Face of Adversity.” 

We have also just begun to undertake a survey study entitled “Adaptability and Innovation” in conjunction with the Family Firm Institute (FFI). This survey will consider changes that companies have made to get through the trough, focusing on the ability of privately held firms to better adapt to economic adversity and future uncertainty. Over the next several months we will share insights from the survey leading up to presentation of the results at the FFI annual meeting in October. (If you’d like to see a copy of the final presentation, just ask.)

Indeed, if there is one overriding lesson to be drawn from the numerous “survival stories” that we’re reading and hearing about, it’s that one solution does not fit all. But there are commonalities, including . . .

• the need to plan for both the short and long term,

• fostering open and frank dialogue with your entire organization,

• working in close cooperation with key suppliers and customers, and

• appreciating that “hope” is not an action plan.

Clearly, the effects of the recession have not fully abated, not by a long shot. Yet, as we move through uncertain times and make decisions that will impact not only today and tomorrow but next year and beyond, these survival stories should help provide useful insights into how we can seize advantage during the recovery, as well as future-proof our organizations for the next inevitable downturn.

Flexible planning does not mean discarding long-term strategy
One of the necessary skills for survival is adaptable planning . . . but too many people, we believe, have used this approach to take aim at the value of strategic planning.

The Wall Street Journal wrote about abandoning the long view. In “To Plan or Not To Plan? That Really Is the Question!” we took exception to this overreaction.

Thinking of your plan as a stone tablet is never a good idea. Business downturns require additional flexibility, but if your plan does not allow you to move nimbly – while still locking upon a specific goal (or goals) – then the plan itself, not the concept of planning, is at fault. It’s far better to make short-term tactical decisions against a solid backdrop of a longer-range strategic plan.

The “Silver Tsunami” is hitting at exactly the wrong time. How will it affect your business?
Another one of the common themes in the business press these days is the notion of employee retention. Many articles provide advice on keeping talent that will be needed to help drive your business into the future. This issue is exacerbated by talent that might have been disaffected by drastic actions you may have taken or by frustrations encountered during the recession.
What is missing from many of these pieces is the phenomenon called the “Silver Tsunami,” which was elegantly outlined in a recent article in The Economist.

With the aging of the baby boomers and policies such as one child in China, the experienced, knowledgeable workforce is nearing retirement and there are not enough people ready behind it to fill these slots. On a micro scale, we see this in many of the companies we advise.

Even as companies plan for the recovery, they also need to plan for transferring leadership skills and knowledge from those nearing retirement and retaining as much of the critical knowledge base as possible.

This cannot happen overnight.

First, a long-term plan for leadership retention and development needs to be constructed. It must include strategies for both retention of key senior talent, perhaps on a consulting basis, and career development for the next generation of leaders. The latter might include coaching, mentoring, outside training, and education. In short: a career development plan. A compensation plan tied to career development should also be included in the planning.

The bottom line
So, what’s the takeaway from all the “recovery” advice out there? Simply put, we’re not out of the woods yet. We likely won’t be for some time. But, that’s no reason to wait! Set your long-range goals and plan now. And get moving, now, on the short-term actions needed to accomplish that plan.

Sincerely,
Barry S. Cain, JD, CMC, Managing Director, Strategic Services
David Spitulnik, Director, Strategic Services

 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.