Managing in Turbulent Times
In turbulent times, liquidity is more important than earnings. (page 13)
In turbulent times, the balance sheet becomes more important than the profit and loss statement. (14)
In turbulent times, management has to put financial strengh before earnings. (14)
In turbulent times, it is essential to know the minimum liquidity needed to stay in business. (14)
During the panic a business has to be able to stay afloat without outside help. (14)
Liquidity by itself is not an objective. But in turbulent times it becomes a restraint. It becomes a survival need. (14)
Four key resources have to be managed consistently, systematically, and conscientiously for productivity. They are capital, crucial physical assets, time, and knowledge. Each of these resources has to be managed separately and differently. (20)
Productivity of the human resource, and especially of knowledge workers, requires that people are assigned where the potential for results are, and not where their skill and knowledge cannot produce results no matter how well they work. (23)
Assignment control is the key to the productivity of the skilled worker. (23)
The only true "expert" is the person who does the job. (24)
The only way to increase productivity of "labor" is to increase the productivity of the people, that is, the productivity of time and the productivity of knowledge. (28)
Managers thus have to manage separately the productivity of all four key resources : capital, crucial physical resources, time, and knowledge. (28)
"Profit" is an accounting illusion. (29)
The minimum cost of staying in business is the cost of capital. (29)
A rate of profit that does not equal the cost of capital is not "profit" at all. It is loss, both for the firm and for the economy. (33)
The cost of capital is always the minimum cost of staying in business. (36)
One way to exercise assignment control and to concentrate is to have two budgets : an operational budget for the things that are already being done, and an opportunities budget for proposed new and different ventures. (42)
A minimum amount of growth may be necessary to survival. It is always necessary if the market is growing or if the industry structure is changing. (48)
"Industry leadership" is thus a matter of quality and of concentration on areas of strength, rather than of size alone. (64)
There is room in almost every area for the true "specialist" who preempts a small ecological niche. (64)
What is not tenable is the strategy in between. (64)
Any business needs to know its strengths and to base its strategy on them. (65)
Most businesses and public service institutions alike believe it possible to be a "leader" in every area. (65)
Strengths are always specific, always unique. (65)
Every "right" product sooner or later becomes the "wrong" product. (66)
All it needs is a "scorecard" that judges results against expectations. (70)
The performance of management can and should be measured against its business strategies. (71)
Population structures will be the least stable and most drastically changing element in economics, society, and world politics, and probably the single most important cause of turbulence. (77)
The population changes and their dynamics are so sweeping and so pervasive as to affect all institutions, businesses and public service institutions alike. (116)
In three related facets of its environment - the economic, the social, and the political - management faces new realities, new challenges, and new uncertainties. (153)
Never before has a social leadership group, a new social institution, emerged as rapidly as management, which was virtually unknown in 1900 and is now worldwide and ubiquitous. And rarely, if ever, has it proven indispensable so quickly. (225)
Management is now being stridently attacked. It is at the very center of the turbulence. And it has become highly controversial. (225)
Institutions cannot function without management. (226)
Management is the organ of institutions, the organ that converts a mob into an organization, and human efforts into performance. (226)
The form which management will take may be quite different tomorrow. The restraints, the controls, the structure, the power, and the rhetoric of management may all change drastically. (226)
The first-line supervisors may face the most upsetting challenges, for which they are least prepared. (226)
"Middle management" also faces challenges. (226)
In all developed countries, top management is already in a process of rapid change. (227)
The times ahead will demand more rather than less concern by top management with the actual business, its objective, its priorities, and its strategies. (229)
Rarely has a new social institution, a new social function, merged as fast as management in this century. (231)
Rarely, il ever, has it become indispensable so fast. (231)
But rarely also has a new institution, a new leadership group, faced as demanding, as challenging, as exciting a test as the one that managing in turbulent times now poses to the managements of businesses and no-business public service institutions alike. (231)