This morning, my esteemed colleague - Bob McGhee - brought McKinsey’s quarterly economic survey of 1,820 executives to my attention. Honestly, I never read the stuff, but it’s a good thing Bob does. In his words:
“It was good to see so many taking advantage of the times by hiring talent they could not normally get, and going after their more weakened competition.”
Sure enough, in response to “Managing the crisis: What steps, if any, has your company taken or does your company plan to take as a result of the global economic turmoil?” we see increases, among respondants, in the following categories:
- Restructure (37%)
- Introduce new products/services to gain market share from weakened competitors (36%)
- Hire talent that would not have been available otherwise (22%)
- Leave certain markets (18%)
Bob also reminded me of Intel’s age-old tactic of investing in manufacturing facilities during hard times to take advantage when things turn around. (Bob and I worked together at Cyrix in the 90s, competing head on with Intel in the heyday of the microprocessor wars.)
Of course, Bob was referring to yesterday’s announcement by Intel chief Paul Otellini that the Silicon Valley giant plans to invest $7 billion over two years to upgrade U.S. manufacturing facilities in Arizona, New Mexico, and Oregon, to a new process technology. According to CNET News.com:
“For nations like the United States, absolutely nothing about the future is inevitable or guaranteed–not jobs, not leadership, not our standard of living,” Otellini told the Economic Club of Washington here. “How we deal with these changes can lead us to new heights–or they will define the beginning of a downward spiral.”
Inspiring words, to be sure. And Paul is right, of course. But the point I’d like to make is this. Economic recession and market turmoil have always had the effect of reconfiguring competitive landscapes - shuffling the deck, if you will. It marks a rare opportunity for savvy executives to reposition their companies to take advantage of the inevitable market recovery.
The article Taking Advantage of a Downturn, from Harvard Business Update, names Arrow Electronics, Dell Computer, Mattel, and Walgreens as companies that, in the past, made smart moves to boost market share during recessions. You can find similar companies of all sizes in virtually every market category.
In these uncertain times, I can say one thing for sure. Out of the rubble will rise new leaders - and old ones - that had the foresight and fortitude to take risks and move boldly when their peers and competitors hunkered down, waiting for something good to happen.
Which will you be when the market turns around: a leader or road-kill?
[Image: AP]
