How to Improve Your Rank on the New Phase of Hunker Down Versus Grow – Call it Leadership, ERM Etc!

Simply put, a key issue in economic turbulence is always the balance between hunkering down too much (being too conservative) versus growing too much (being too optimistic). And when times are really turbulent like they are this year, the stakes for guessing wrong on this key component of balancing risks and rewards go up dramatically. Just think how hard it can be for you to change momentum from either direction, once executive leadership implemented the newest business model.

The Wall Street Journal weighed in on this issue in Monday July 26th in the Money & Investing section. Markets Say No to Expansionist Companies. Take some zeros off the discussion about Texas Instruments, Delta, Ford and UAL to apply the article and discussion to your business, project or job. Where are you too conservative or too aggressive now? What changes should you make?

For instance, take too big a risk for growth and guess wrong or there is a double dip in the comply, and the company and your job are at risk. And the other side of the coin is not any better. Be too conservative and miss out on sales opportunities or potential acquisitions and you start losing customers, deals AND your best people. The grass does not have to be much greener on the other side of the fence, when times are turbulent, for key employees to move to a competitor.

In essence this thought process and the insights you gain are the key aspects of risk management. Call it enterprise risk management, ERM, operations risk management, ORM, contingency planning, strategic planning, risk assessment, operational review, due diligence, or even simpler versions like cash planning, performance management, conservative leadership or a business model review. No matter how sophisticated the phrase your business uses, the process starts with regular and consistent common sense applications balancing current and future risks with current and future rewards. It is very easy to underestimate how much risk you are taking and overestimate the realistic rewards.

After all, someone at British Petroleum balanced risks and rewards when Tony Howard and his leadership team changed their business model to supposedly improve business performance versus their industry peers so bottom line dollars could be reinvested better. Classic strategic planning application to improve growth, efficiency, return on investment, (ROI) etc. What went wrong? Was it faulty strategic planning, poor operational and tactical execution, or under estimating risks and overestimating realistic rewards?

Repeating the questions earlier to help you apply the article and discussion to your business, project or job. Where are you too conservative or too aggressive now? What changes should you make?

Bottom line? – Control your financial destiny! Capitalize on hidden high return opportunities, while limiting exposure to risk.

Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided.

You need a perspective of business under the microscope and to have lived to tell the tale. After analyzing and helping over 200 companies, I have learned one key point:”What You Don’t Know About Your Business Can Cost You Your Business.”

From the author of the book, ‘Stick Out Your Balance Sheet & Cough: Best Practices for Long Term Business Health’. Available on Amazon. So open this book and say Profit.

A video of Gary discussing his book is available at http://www.youtube.com/watch?v=OXhsY8hP70A

From Gary W Patterson, http://www.FiscalDoctor.com FiscalDoctor