Monthly Archives: May 2009

Seize the moment: Making hard calls in a downturn

May 30, 2009 11:34 am

My recent posts argued that managers spread resources evenly like peanut butter on a slice of bread, rather than making hard trade-offs. They do so to preserve a sense of perceived fairness among units and achieve compromise among tribes with conflicting interests. A boom provides the cash to spread around.

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Now or never: Forcing hard calls in the downturn

May 27, 2009 11:01 am

Despite their reputation as decision makers, managers often dodge hard calls.  In many cases, the biggest obstacles are not insufficient information or uncertainty. Rather managers avoid tough decisions to preserve their organization’s social fabric and maintain truces negotiated among coalitions within the organization.

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When good intentions lead to bad decisions

May 23, 2009 5:59 pm

Leaders avoid hard decisions for a variety of reasons. Brute uncertainty may obscure the right course of action, for example, or executives may lack incentives to make the tough calls. Often the right choice is obvious and managers have strong incentives to make the right call. Yet they still avoid tough calls. The story of Firestone’s response to the radial tire illustrates this dynamic.

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Posted in creating value in a downturn, Why good companies go bad |

The peanut butter approach to resource allocation

May 19, 2009 11:08 am

Executives, according to the conventional wisdom, are decision makers. Their job consists of laying out alternatives, calculating the relative merits of each using tools such as net present value, and making the hard choices on which deserve resources and which do not. Like a Roman emperor turning a thumb up or down in the coliseum, they make decisions and their choices have consequences.

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Posted in creating value in a downturn, execution, value creation |

Developing general managers: The Haier case

May 17, 2009 1:02 pm

Firms navigating through turbulent markets face many challenges. One of the most daunting, however, is how to develop their executives to effectively manage the range of diverse threats and opportunities that volatile markets generate. And how to provide this executive education in a way that offers good value for money and time.

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Training under fire: Making executive education work in a downturn

May 14, 2009 11:50 am

In the current downturn, many companies have adopted a slash and burn approach to executive development. While a bit of pruning may well be in order, a wholesale dismantling of management training is short sighted. Well-designed programs provide benefits well in excess of their cost: They help managers who have never seen a recession avoid common mistakes; they allow top executives to drive their agenda. Employees, moreover, are highly motivated to learn anything that will help them navigate the current downturn.

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Posted in creating value in a downturn, execution, executive education, performance culture, talent |

Executive education in a downturn: Opportunity not luxury

May 10, 2009 11:01 pm

Companies can hire stars in a downturn, but they can also develop existing employees. A recent survey of European HR executives found that the three least effective ways to cut costs in past recessions all entailed cutting back training and management development. Despite their negative impact on organizational effectiveness and employee commitment in the long-term, companies continue to rely on them to trim costs in the short-term. This is a mistake.  In a downturn, management development is not a luxury to cut, but an opportunity to seize. Talent development in a downturn can create a sustainable competitive advantage in three ways:

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Posted in creating value in a downturn, execution, executive education, talent, turbulence, value creation, Why good companies go bad |

Getting the most out of stars you hire in a downturn

May 10, 2009 2:05 pm

A downturn creates a buyer’s market for resources, including high-performing employees. For complex jobs, including coding software, analyzing investments, and conducting scientific research, stars perform at levels ranging from two to ten times the productivity of average employees. Unfortunately, a star’s performance often deteriorates after switching employers. What steps can managers take to ensure that newly-hired stars continue to perform at a high level?

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Posted in creating value in a downturn, performance culture, talent, value creation |

Shooting stars: Why highfliers flame out in new jobs

May 8, 2009 7:40 am

In a downturn firms can acquire resources that would be too expensive or unavailable in a boom. This logic applies to human resources as well as brand or hard assets. A recent survey found that hiring stars is among the most effective ways to enhance a firm’s talent pool during a recession.

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Building human resources in a downturn

May 5, 2009 12:48 am

Over the past few weeks, I have read dozens of special reports produced by consulting firms on managing in a downturn. Most are banal—heavy on data, light on insight, and devoid of non-obvious recommendations. There are exceptions. The Boston Consulting Group and the European Association for People management recently published an excellent white paper called “Creating people advantage in times of crisis” which provides some very practical advice on developing human resources during a downturn, as well as some surprising findings on what companies are actually doing.

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Posted in creating value in a downturn, performance culture, talent |
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Leading in turbulent times

This blog is no longer active but it remains open as an archive.

Don Sull is professor of management practice in strategic and international management, and faculty director of executive education at London Business School. This blog is dedicated to helping entrepreneurs, managers, and outside directors to lead more effectively in a turbulent world.

Over the past decade, Prof Sull has studied volatile industries including telecommunications, airlines, fast fashion, and information technology, as well as turbulent countries including Brazil and China, and found specific behaviours that consistently differentiate more, and less, successful firms. His conclusion is that actions, not an individual’s traits, increase the odds of success in turbulent markets, and these actions can be learned.

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