AN INCONVENIENT LEGACY

Recent high profile failures of “safe” blue chip companies has left billions of dollars of debt within their suppliers. Business and commerce has not experienced a recession like this and there is no rule book for managing our way out of it.

The premise of Dip Dynamics suggests that organizations will not recover in typically classical ways. Furthermore there appears to be a reverse bullwhip effect within business that suggests commentators are confusing supply chain re-calibration (i.e. stocking at lower levels) with a tangible upturn in the market.

The only way we will know how well our business is doing is by staying close to the point that matters, our customers.

HANDS UP WHO WANTS TO BE THE CEO OF A $1b COMPANY

Who wants to be the CEO of a $1bn turnover company and who want’s to be the CEO of a $100k turnover company?

Many CEO’s of larger companies have been cradled all their life. The decision to buy capital equipment or put food on the table is a decision that they have been sheltered from, unlike owner operators and managers of smaller businesses. Larger companies have been able to access resources, people, credit, supplier and customers. But now business has dropped and by a phenomenal amount.

Many CEO’s may have thought nothing of taking on a $20m project last year, but this year they will be lucky if they can take on a $2m project. Because of the recession, they haven’t got the capacity, they haven’t got the finance, they haven’t got the ability in the supply chain anymore, they have cut their businesses and they are now waking up to the fact that they physically have not got the people on the floor with the smarts. The managers, specialists and technologists are all gone.

If you are asked to double the size of your business today... you could not do it, neither could most of the CEO’s of larger companies that were running the businesses at the top of the “curve”. They have not had the experience of having to grow the business form the grass roots up. We are witnessing the renaissance of the entrepreneur, and the manager of the small company because this is their home ground.

Let’s ask the question again - Who wants to be the CEO of a $1bn turnover company that is making a loss and who want’s to be the CEO of a $100k turnover company that’s retaining 80% earnings?