It is an easy choice to hunker down in difficult economic times, slashing budgets and reducing staff. Things are about as uncertain as they can be as I write this month’s column and while cutting costs can be very appealing for short term gain, is this a wise choice?
Last month I wrote about “Optimizing Portfolio Value in Difficult Economic Times.” I discussed the critical need to focus on creating economic value at two levels: Portfolio Value Optimization (PVO) that concentrates on optimizing economic value via a balanced portfolio; and on Portfolio Tactical Optimization (PTO) that concentrates on “making it happen.”
When the economy turns down, it is more important than ever to carefully scrutinize your development portfolio and redirect resources to projects that have the best chances for creating value. You cannot afford to carry projects that drain scarce resources. Killing them early frees resources to apply to projects of greater potential value.
There must be tens of thousands of Excel® business models created every day in an effort to guide management decision-making. Many of these models are exceptionally good, created by talented business analysts. How many of these models actually help managers make better decisions?
Businesses face the most uncertainty since the dot.com bust and post-9/11. A downturn is definitely upon us. How long will it last? How deep will it go? How will it affect your business? What impact will the fall elections have on your sales and profits?