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Sunday, January 23, 2011

View From The Big Chair – Current Situation

When I was CEO, the senior staff would refer to my role as ‘sitting in the big chair’ – I find this is a warm and respectful way to refer to the leader of the organization, and continue to enjoy using it even today.

Through many, many conversations with top leaders of all kinds and sizes of organizations several common elements have emerged.

Get cash and hold it as cash –
from the chair, the sense is to get and horde cash – do not shift into long-term or market-driven vehicles…got burned badly!  With cash there’s agility and some insulation from the unknown.

Go Slow Taking On Additional Resources – organizations have trimmed staff, and cut expenses to the quick in the face of flagging demand and sales.  From the chair, as times improve (which is not as rapid as in past cycles) - there is no hurry to rehire workers or to increase spending.

Demand and Sales Are Funky –
demand is sporadic and had dropped almost to nothing in some sectors; sales are not being completed – committed orders are cancelled even at the last minute; even the government sector has made awards which do not receive funding: ker-ching>>No Sale! From the chair, there’s a growing ‘tentative sales’ category which is not recorded until the check clears.  The demand and sales graph has almost flat-lined…a slight pulse can still be felt, but no rebound as in the past.

R & D Is NOT Robust –
From the chair, research & development in process has slowed (funding is squeezed) and new projects are delayed or cancelled until the smoke clears on a view of future priorities in a diminished economy.

Planning Is Now Immediate Term –
From the chair, real 3-year plans are non-existent in most organizations – same with meaningful 2-year plans; there is an annual budget plan, but in reality the working plan only goes out for about the next 6-months.  Strategic plans are mothballed for now rather spending effort on updating with guesses about the economy.

But There Is Hope –
Occupants of the Big Chair are rising to the challenge of a down & sluggish economy and have jolts of optimism as they see their markets show some signs of life.  The consensus is the overheated go-go times are behind us and are history – recovery is happening BUT it will not bounce back to old levels and will grow slowly over time from the current minimalist position.

Collaboration and On-Demand Resources Are Now The By-Words –
using someone else’s capacity when needed; contracting for workers with specific needed skills for the duration of a production run; working together with other complementary organizations -is the plan of the day. If sustained into the future, this is an interesting structural change in how we do business and opens up the opportunity wider for entrepreneurs and small firms to be an integral but independent part of the available resources for larger organizations (discussed in more detail in Getting Back To Normal).

The view from the big chair is that there IS movement in a positive direction in the economy – it is slow, but evident.

What’s the view from your chair?  Any different?
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