Position Your Company for the Inevitable Downturn
The Chief Executive article, “Position Your Company for the Inevitable Downturn,” quoted Russell Reynolds Associates CEO Clarke Murphy about his thoughts on how CEOs can prepare their companies for downturns. The article is excerpted below.
One way CEOs can buttress against that day is to plot where the company should be before the next downturn and move deliberately on a path to get there. “Invest more in the future in this up market than you did the last cycles,” advises Clarke Murphy, CEO of Russell Reynolds Associates. “The pace of change is so fast that you can’t just book revenues, you have to consistently look at how you’re operating and innovate so that your company is here five years from now, or whenever the music stops.”
Many legendary companies failed to make sure they were doing this before the Great Recession, including General Motors, Bank of America and even GE, and they and their CEOs paid the price for their failures. Industrial stalwart Barry-Wehmiller stayed ahead of the game, and that’s what CEO Robert Chapman is intending to do this time, too. “Our business model is designed around a balance of markets, products and technologies and financial strength,” he says. “And I would never compromise our financial strength.”
Also, with the next economic swoon in mind, the boom could be a good time to overhaul personnel evaluation and even realign succession plans.
“You need to assess your executives on multiple levels to see how they can succeed in a world of rapid change, rather than just in a single dimension,” says Murphy. “Can they be both disruptive and pragmatic?”
To read the full article, click here.