This time last year I was making the closing address at the Annual Turnaround Management Conference in which I drew attention to one of the claims made by Richard Kawasaki in his book “Rich Dad’s Prophecy” that the would be a significant financial meltdown during the period 2008 and 2015. There were many in the room who denounced such a prediction as a myth. As I indicated at the time, the issue was not whether there was going to be one but how well protected were people in the event that the event did actually occur. My genuine concern was the increasing belief by a number of parties that it could not happen.
It was a belief that rings similarities in my mind of the statements made in 1911/12 that the ship that could never sink had finally been built. The result of those beliefs, and the short but spectacular life of the RMS Titanic, is now a matter of recorded history and a basic understanding that essentially almost anything that floats can sink.
There are always many people who jump up after the event and spruce I told you so, alas this does not help. Risk assessment and contingency planning are the foundations of preparation against difficult times or events regardless of what they are, financial or otherwise. The difficulty with this is that there is a cost associated with this which will reduce the level of profit that you make, alas in boom times where the simple driver seems to be ‘increase profits at any cost’ alas this make surviving the difficult period more difficult.
Turnaround has now genuinely become a global issue. No doubt there are many that will be gloating at the impending prospect that there is money to be made in the demise of others. The real issue is that if steps are not taken to minimise the damage the collateral impact will be significant.
This year in addressing the 2008 Business Leader’s Summit I revisited the fundamentals of turnaround from a global perspective. They can effectively be summarised as follows:-
G – Growth
L – Logistics
O – Operations
B – Behaviour
A – Action
L – Leadership
It will be the application of these processes that will see the regaining of value within the community. Let us hope that at the end of the day there is a genuine attempt to preserve, retain and build stakeholder value at all levels. Failing this then the impending slide may well have a very long distance to go and there will be many unnecessarily hurt along the way.