The Due Diligence Checklist (Part 4)

Backed Into a Corner?  Think Again…

Sometimes managers and business leaders feel like they have been backed into a corner.  Things are not the way they like, but they don’t believe they can do anything about it – perhaps due to time, money, or the sheer overwhelming nature of the task.  However, there may be an expert out there who can surprise you with a straightforward solution that you had no idea was even possible.  People often don’t realize that many chronic problems have simple solutions.  If nothing else, an expert or a tech advisor can give you some structure and guidelines for what to do when you can afford a solution.

If all your choices seem bad, cast a bigger net; go to a bigger wheel.  You may just be looking at the situation with blinders on.

Look for Major Trends That May Affect Your Strategies.

One common mistake we make is to assume that the future will be pretty much like the past has been.  We have seen how wrong this can be in the recent financial crisis.  Greenspan’s impregnable models just didn’t go back far enough, so he made one wrong choice after another.  American car companies overlooked the fact that women entered the workforce en masse in the 1980s.  Japan seized the opportunity by building cars that appealed to the working woman.  Today our middle class has been devastated, and many young people are living disenfranchised, marginal existences – perhaps with college degrees, lots of school loans, and jobs as department store clerks.

The world has changed and continues to change, and emerging trends may affect your business – tomorrow or five years from now.  We don’t have a crystal ball, but we can figure out some of these trends.  In the book, The Tech Advisor, we look at some examples of major technology shifts that caught many unprepared, even though industry  insiders took them as a given.  Sometimes an expert advisor can help bridge this gap, and help business leaders get ahead of the curve.  Research studies are another valuable source of information.

The Golden Rule:  Don’t Confuse Strategy and Tactics.

Strategy versus tactics is part of a much larger discussion, where there are numerous perspectives and, without a doubt, agendas.  Therefore it will only be mentioned here.  Generally the idea is thought to have originated as a part of military planning, but it has been adopted in the business world.  Strategy involves long-term goals, vision, mission, and identity (“Who are we?”  “Toys R Us”), and usually represents long and careful planning.  Tactics are methods and means for pursuing a strategy, usually shorter term activities, often combined with other tactics, and easily replaced when better ones are found.  However, when a tactic is pursued without a strategy or instead of developing a strategy, it might be a knee-jerk reaction that is less likely to be productive.

During the .Com bubble in the late 1990s, many companies went into merger and acquisition mode.  In some cases there was a confusion of tactics for strategy.  There were always reasons given, such as business synergies, but often the main reasons were:  Wall Street will like it; this will allow us to go public; the stock price will go up; and I’ll get rich.  These unfortunately were not tantamount to full-blown strategies that could unify companies.  The planning consisted of, buy first, and figure out how to integrate later.  While this kind of planning, or lack thereof, affected all layers of the respective corporate cultures, it was often very obvious in the difficulties encountered with the inconsistent computer and software systems that somehow had to be merged.  With good planning, there could be a smooth, orderly transition.  Otherwise the result was chaos.

 Copyright © 2011 Patrick D. Russell
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