Who's got time to worry about building a stronger organization
in an acute downturn? Surely executives can't focus on internal
issues when so many other pressing matters are crowding in on
One CEO we work with explained this struggle in stark terms:
"Our revenues are down fifty percent and earnings are negative," he
said. "We're in survival mode. All we can do is cut our costs,
watch our cash, and try to hold on. We don't have time or resources
to focus on organizational concerns."
But another senior executive had a different answer. "Our
business is challenging, but we're not in a crisis," she said.
"Frankly, this is a unique opportunity for us to make improvements
in the organization-our people, our processes, the way we make
decisions, how we execute. If we do it now we'll come out of this
recession way ahead of our competitors."
It's clear enough how a company that is relatively strong can
gain by strengthening its organization. Turbulence offers a rare
chance to bring in new talent and improve the way that
organizations function. But while skepticism from executives under
stress is natural, companies in dire straits have even more to gain
from investing in their organizations. They often lack the
organizational capabilities to take on the challenges they face.
Some rush to snap judgments and ill-considered decisions. Others
stall, unable to make key decisions. Some of these companies badly
need new people and the perspectives they bring to help the
business survive. They may need to overhaul dysfunctional
cultures-the kind, for instance, that supported excessive risk and
reward without accountability. They certainly need to revisit the
questionable decision processes that landed them in so much
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The fact is, strengthening the organization is one of the most
powerful levers any company can pull to improve its performance in
a downturn. As we've said throughout this series, industries are
affected differently by different recessions. Individual companies
occupy stronger or weaker competitive positions. Some have adequate
financial resources; others are strapped for cash. These
differences determine a company's action plan in turbulence.
But even though the situations and necessary actions vary
widely, the questions that companies must ask to strengthen their
organizations are largely the same. What are the critical decisions
we must address in this downturn? Do we need to adjust our
organizational structure to address them effectively? How should
our roles and processes change? Will our most experienced people be
able to make and execute the key decisions, or are new skills and
perspectives required? Which aspects of our culture reinforce
decision effectiveness, and which should be thrown out?
Adopting this "decision lens"-by identifying the critical
decisions and then determining what needs to change in order to
help the organization make and execute those decisions
effectively-is the single most important step a company can take to
improve the performance of its organization. It helps leaders focus
their efforts where they will have the most impact during a
downturn. And it positions the company to accelerate when the
economy turns around.
To read more about how global companies are using a
decision lens to strengthen their organizations, clickhere.
Marcia Blenko is a partner with Bain & Company and
leader of Bain's Global Organization practice. Darrell Rigby leads
Bain's global practices in Retail and Innovation.