It’s hard to look at the proverbial glass as half full when the news is so bad: rising unemployment; poor earnings reports from Fortune 500 companies; a hibernating bear market; a housing market in the tank; and oil too expensive for the tank. An article by Asaf Farashuddin in the Booz & Company publication, Strategy+Business, argues that this is the time to get ready for better days. As if to say, “Quit your whining and start doing something,” the author wrote:
All industrial corporations face downturns and periods of retrenchment. Successful strategists promote upturn thinking even during the deepest downturns. Techniques such as crafting an upturn SWAT team, implementing long-term strategic planning, and requiring upturn thinking during restructuring help companies develop their own Marshall Plan to stay one step ahead of competitors when better times return.
Of course, Booz & Company would take this position - strategy is their bread and butter. However, they’re partly right. The U.S. economy will bounce back; it’s just that nobody knows how long it will take. And even now some companies and some sectors, large and small, are making money and growing. Exxon recently set the record for most profit in a quarter. Small, fuel efficient cars are selling like hotcakes (Hotcakes must be a growth industry, too.).
What Booz & Company, and all of the other share price-oriented, strategy companies fail to take into account is the cost and value of knowledge. Their focus is new markets, new products, and new partners. They should also be thinking about new knowledge and retaining the knowledge that is walking out the door. Through layoffs, buyouts, and downsizing, many industrial corporations are getting dumber, not smarter. If they want to be ready for the inevitable upturn, they need people who have the skills, knowledge, attitudes, and beliefs that are the platform for creativity and innovation. They need “talent” with the ability to make continuous improvements in R&D, marketing and sales, production, and operations. They need a culture that supports risk-taking and is prepared for the permanent white water of our economy.