Despite the doom and gloom that the media wants to portray, the economy seems to be quite resilient and maybe strong, even if not booming. Truth is we’ve all been a lot smarter than we were in the latter 90’s about our strategic growth initiatives, capital outlay methodology and human capital planning – which is a complex way of saying the “grow at all costs and let someone else clean it up” days are over. What didn’t kill us in the 90’s through the post 9/11 economy made us smarter and stronger. Although “job growth” remains small or even at a negative, the search for executive talent has simply evolved – not declined. In fact according to the AESC (The Association of Executive Search Consultants) executive search revenue was up 22% in Q4 2007 vs. Q4 2006. The search industry is seeing a more strategic assessment and focus for each and every hire – and is leading in the analysis of how every opening and role impacts the overall business plan both short and long-term.

As I have found myself in this new Managing Partner role in a new economy, I have been reading a little bit of everything and found an article by a former multibillion dollar client’s EVP of HR, who as an accomplished business executive and Ph.D. has interesting insights on “Strategic Thinking” that were of particular value when I also considered the Harvard Business Review’s article for a new leader on “Diagnosing the Business.” I hope you enjoy them both and can incorporate their value in your own way. I will assume you’ve all had a solid start to the calendar year, and have high expectations for the quarter to come.

David M. Sobocinski
Managing Partner
dave.sobocinski@carterbaldwin.com

The New Leader’s Guide to Diagnosing the Business

Incoming CEOs and general managers don't have much time to show what they can do to improve a business's performance. (In 2006, for instance, about 40% of CEOs who left their jobs had lasted an average of just 1.8 years--and many of them were ushered out the door.) Within a few months at most, leaders must find ways to boost profitability, increase market share, overtake a competitor--whatever the key tasks may be. But they can't map out specific objectives and initiatives until they have accurately assessed their companies' distinctive strengths and weaknesses and the particular threats and opportunities they face. In this article, Bain consultants Gottfredson, Schaubert, and Saenz provide a diagnostic template to help organizations figure all that out so they can decide which goals are reasonable and where to focus performance-improvement efforts. The template is built on four widely accepted principles. First, costs and prices almost always decline; second, your competitive position determines your options; third, customers and profit pools don't stand still; and fourth, simplicity gets results. Along with each principle, the authors offer diagnostic questions and analytic tools. Of course, each manager will emphasize certain elements of the template and de-emphasize others, based on his or her business situation. This process will show incoming CEOs and general managers where they are starting from (their point of departure) and help them establish their performance objectives (their point of arrival) as well as the change initiatives that will take them where they want to go.

Strategic Thinking : Learn to Optimize Its Power

Most leaders rarely reflect on their thinking patterns and biases and miss critical information that is vital to their growth and profitability.

Great strategies result from rich and varied viewpoints, facts, and instincts. Great strategists discern what is critical, identify their preferences, understand their biases, and plan for blind spots. Insight into thinking preferences, power, and politics provides a leader with a strong platform for strategy formulation and implementation.

One organization’s path of strategy development demonstrates the power gained by moving beyond its comfortable, predictable thinking patterns. A staid consumer products organization had plateaued in revenue growth and profitability. The company languished for years because it had little insight into the thinking and assumptions that were driving its leaders. By challenging long-held beliefs about what presaged company success, leaders doubled revenue and reached unparalleled profitability — even during a time when its industry was flat.