The leader who falls will emerge stronger

October 28th, 2009 12:47am

F Scott Fitzgerald said: “There are no second acts in American lives.” An awful lot of entrepreneurs, investors and executives must hope he was talking nonsense.

The past 18 months have seen many reputations ravaged, plenty of high-profile sackings and a lot of business failures. I am afraid that in this digital world, such blemishes are recorded for all time.

Not many of us will emerge entirely unscathed from the battering of this downturn – a great deal of mistakes of different sorts have been exposed. So we should all maintain an optimistic belief that the world is more forgiving than is commonly supposed.

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Living strategy and death of the five-year plan

October 27th, 2009 12:46am

Is strategy dead? Chief strategy officers will deny it. Some strategy consultants may reject the idea, too. But, right now, markets are unpredictable. The economic outlook is uncertain. The world has changed. If old-style strategy formulation is not exactly dead, then it is hardly in the best of health.

For months, many leadership teams have had only one strategic goal in mind: survival. Grander visions have been filed away or forgotten. This hedgehog-style approach – roll up into a ball and wait until things are less scary – may keep a company alive temporarily, but does little to prepare it for the future.

Analysis by Boston Consulting Group suggests that corporate hibernation only works if recessions are short, if the outside world goes back to the way it was before, and if all your competitors are equally inactive, tucked up for the economic winter. In 2009, not one of these conditions applies.

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Failing to cope with change?

October 20th, 2009 1:54am

David Rubenstein, co-founder of Carlyle Group, the private equity firm, said last week that his industry ought to consider adopting a new name to describe what it does more accurately. How about “change capital”, he suggested. I am not sure that this is a good idea. If Mr Rubenstein thinks the word change will be less provocative than private equity, then he is likely to be disappointed.

Change is everywhere in business, and people tend not to be very happy about it. But it is not just nostalgia, or laziness, that causes the negative reaction. Change is rarely managed well.

What do managers get wrong about change? There is quite a long list. They underestimate how long it will take to get people to accept change. They fail to recognise how difficult it is to spread the message that change may be necessary or unavoidable. They do not understand what change feels like beyond the boardroom or the top management table. And, having finally got the organisation to accept the need for change, they forget to explain that the new direction or mission may change again, and possibly quite soon.

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Why ‘chillaxing’ isn’t cool

October 19th, 2009 1:10am

The other night, I asked my youngest child what he thought about his new secondary school. He considered the matter and then said: “It’s not very chilled.”

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A new look at age-old questions

October 13th, 2009 11:38am

Like the rain, recessions fall on the just and the unjust, and on people of all ages. But not every age group will face the same problems or react to them in a similar way.

Some pundits are predicting that, in the coming age of austerity, the workplace will be the setting for intergenerational conflict. Tensions over unequal pension arrangements or varying attitudes to work may cause trouble.

Others argue that now is the time to invest in youth. My colleague Luke Johnson last week recommended hiring “as many bright young things as you can afford”, in the hope that “their dynamism will counteract the inevitable conservatism of an existing institution”.

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Further reading

October 7th, 2009 4:21pm

Generation game redefines business

October 7th, 2009 1:13am

An issue that has troubled me for some time is the clash of generations under way at the top of so many organisations. It is not just the usual strife between ambitious youngsters and older incumbents waging a rearguard action to maintain their grip on power. Rather, this conflict reminds me of the battles between young and old in the 1960s over the Vietnam war, and the gulf of misunderstanding between them.

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How to compete in an upside down world

October 6th, 2009 1:09am

Do we need to think again about globalisation in the wake of the financial crisis? Almost certainly yes. One of the few good things about the crisis is that it should have made fresh thinking possible.

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Prahalad is back

October 1st, 2009 10:18am

Today sees the publication of CK Prahalad’s update of  The Fortune at the Bottom of the Pyramid, his book originally published in 2004 that argued that businesses could eradicate poverty and earn profits at the same time.

Stefan Stern will be writing his column on some of Prof Prahalad’s key ideas next week. Until then, you might want to check out the ‘bonus section’ on the website above.

Jerome Kerviel: curbing bonuses won’t work

September 29th, 2009 5:01pm

I’m a bit late on to this but last week Jerome Kerviel, the “rogue trader” who is accused of losing French bank Societe Generale €5bn, was interviewed on French television.

The video on France 2’s Objet du Scandale is revealing partly because of all the talk at the G20 and, in the UK at the Labour party conference, of the need to curb bankers’ bonuses or at least restructure how they are paid out. Kerviel’s broader point is that there isn’t any point; whatever rules are created, clever people will find a way round them.

But I thought his other comment on the nature of his former job as a trader pointed to a wider issue that doesn’t seem to be attracting quite as much discussion. “It’s a job that makes you a bit crazy, an addict. They push you to take risks,” he said, referring to the culture of his former workplace.

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