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How Are You Planning For Success?

Thursday, 2 Jul 2009 | 1:15 PM ET

A rallying cry from today's guest blogger, author Erika Andersen who has written "BEING STRATEGIC."

Being Strategic
Being Strategic
Being Strategic

Invest in your company’s future during difficult times.

The Dow seems to be calming down and inching its way back up; job losses seem to be slowing; manufacturers' new orders for consumer goods and materials were up in April. But there’s still a great deal of fear in the business community; executives, by and large, are still operating quite protectively and reactively.

Our point of view is that, even though it may seem prudent, it’s actually a bad time to – metaphorically – stay in bed with the covers pulled over your ears. Of course it’s important to be realistic and careful; there are real dangers here. However, it’s even more necessary to be courageous and forward-looking. Historical research, by Bain & Company and others, supports the idea that recessions provide significant opportunities for growth and innovation. Information they gathered during the ‘90-91 recession shows that while an unusually high number of companies moved from the top to the bottom quartile of growth in their industries during the recession – an extraordinarily high number also moved from the bottom to the top.

How can organizations become part of the second group, rather than the first? How can they take advantage of the opportunities presented by the current situation?

We’re advising our clients to, in effect, split their focus. Certainly they need to attend to their current situation; making sure they’re operating as cleanly and efficiently as possible, and that they’re clear about what their customers are asking for, and providing it at good value. At the same time, they need put part of their focus on the future; to think about where they want to be, coming out of the recession, and what they’ll need to do now to position themselves to achieve it.

One client of ours that provides a great example of this is General Electric, with the approach it’s taking to its ecomagination initiative. GE's stated mission in ecomagination is to increase shareholder returns through improving energy efficiency and reducing environmental impact. And they’re doing this in a smart way, focusing both on the present and the future.

Here’s what the current focus is producing: they reduced GE’s overall greenhouse gas emissions intensity on a revenue basis by 41 percent by eoy 2008. They also grew revenues of ecomagination offerings by 21 percent, to $17 billion, by the end of last year. GE has built its reputation on good metrics, and they’re applying them here, as well, looking closely at the people and money dedicated to this effort to assure they’re making best use of available resources.

At the same time, they’re looking ahead: the senior ecomagination team is spending time focusing where they want to be in a year, in two years, in five years. They’re thinking about how they can best position themselves as leaders in the environmental arena – working with governments, corporations and NGOs to solve ecological problems in ways that produce “green collar” jobs and drive both economic growth overall and great financial returns for both GE and its customers. In fact, in order to take advantage of the opportunities presented by the increasing global focus on “green” solutions, and to continue to take a leadership role in this movement, GE is increasing – vs. decreasing or holding steady – their investment in R&D to $1.5 billion in 2010. They’re also investing their time and energy in exploring partnerships with customers to help them to reduce their environmental impact while operating more efficiently and productively. They feel confident that, as the world economy rebounds, they’ll be well-positioned both to lead and take full advantage of the shifting global focus toward “green.”

And here’s a historical example; a little 20-20 hindsight is often helpful in making these things clear. In the 1920s, Post and Kellogg’s were the two leading breakfast cereal companies in the US. As the Great Depression took hold, Post hunkered down: they cut R&D and advertising, laid off staff, shrank budgets overall. Kellogg’s, in contrast, made a bold decision. While trimming non-essential costs and some staff, company management decided to increase their investment in both R&D and marketing. They released new products and advertised them heavily. Their efforts paid off: by the end of the recession, Kellogg’s had grown significantly; Post had not. And Kellogg’s has maintained its market lead over Post ever since.

It takes a leap of faith, on a variety of levels, to invest in your company’s future during difficult times. But difficult times are also times of great change and new opportunity. New needs emerge, and those who can see those needs and position themselves to fulfill them can derive huge benefits.

And if you just focus on staying safe and making it through, you might be left behind when the dust clears.

____________________________

Erika Andersen
Erika Andersen
Erika Andersen

Erika Andersen is the author of BEING STRATEGIC.

She is also the founding partner of Proteus International, a coaching, consulting and training firm and has served as coach and advisor to the senior executives of such companies as MTV Networks, GE, Rockwell Automation, Union Square Hospitality Group, and Cablevision Corporation.

For more, check out the author's website: http://beingstrategic.com and her blog http://thesimplestthing.typepad.com

Do you have a book suggestion, question or comment for Bullish? bullishonbooks@cnbc.com

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