The Fall 2006 Clarion Call dealt with the three significant cross-organizational responsibilities senior leadership teams uniquely own: Ensuring Business Viability, Creating Organizational Alignment and Igniting Possibility. We used an urban architect metaphor in the article to describe the broad view required to guide the direction of a business as well as engage in the more detailed planning and execution that make organizations work.

With the recent dramatic economic contraction, the rapid decline in demand and the unsettling uncertainty about the length of the recession, leaders have naturally narrowed their focus to the cost management dimension of Ensuring Business Viability.  However, in those companies that have successfully absorbed the shock of the last six months, we are finding clients who are now broadening their focus to incorporate the rebuilding process.  Not all companies are there, of course, as the responses to our recent Business Climate Survey indicate: more than half of the respondents say that executives in their companies are spending, at most, 20% of their time on strategy (with the other 80% being spent on execution).

This is hazardous, in our view, since we do not assume that the strategy you rode into the recession will carry you out. As Peter Drucker says, “The greatest danger in times of turbulence is not the turbulence, but to act with yesterday’s logic.”

Looking Back
For at least the five or six years of economic expansion prior to the third quarter of 2008, most of the senior leaders we worked with were focused on extending and optimizing their business models. They were less focused on dramatically changing their strategies than they were focused on yielding greater returns from their existing operating platforms by growing with the expanding markets while prudently managing expenses.

We would occasionally work with clients to develop new business strategies and greenfield operating models.  However, the work was more often about creating approaches to generate new ideas to extend growth, to exercise greater discipline in developing and maintaining effective organizational alignment, and to improve individual and team performance. These three areas have not diminished over the past six months but the focus on business viability has changed – and it’s changed substantially.

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