In good times when business is expanding, it's easy for managers to not pay much attention to long-term strategy. As a result, when a downturn comes, any cuts that you make may end up cutting your ability to rebuild your capabilities later, says Robert Kaplan in Take Strategy to the Front Lines. Separate what you spend on operations from what you spend on building strategic capability to position yourself for growth long-term.
Download a Free Chapter:
The Little Black Book of Strategic Planning for Distributors
Submit your email address below to receive a chapter of Brent Grover's new book. When you submit your email you will be signed up to receive weekly distribution news updates.
"During a slowdown you have to look much more closely at all the spending programs and all the capacity you have put in and hold onto only those that you want to sustain into the future," Kaplan says. "That's where strategy helps you focus."
Know what type of company you are and what type of company you want to be to make more strategic cuts that will help in the long- and short-term.
Identify what the strategic capabilities you have are and what parts of your business support them. And then make sure you protect those assets when cuts are necessary – whether those assets are personnel or capital equipment.
Please do not reprint MDM's content on your website without MDM's express permission as it is copyrighted material. To gain permission, email us, or call 1-888-742-5060. For information on PDF or print reprints, visit www.mdm.com/reprints. MDM welcomes inbound links from your site. Please cite Modern Distribution Management.
Download the Top 40 Industrial Distributor List
Get the Top 40 Industrial Distributors list in PDF, and you will be signed up to receive MDM Update, your free daily distribution news update by email.