The Upside of the Downturn: A book review by Bob Morris

Posted on: August 25th, 2012 by bobmorris

The Upside of the Downturn: Ten Management Strategies to Prevail in the Recession and Thrive in the Aftermath
Geoff Colvin
Portfolio/The Penguin Group (w009)

Note: I read this book when it was first published and recently re-read it.  If anything, it seems more relevant now than it did then.

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A brilliant analysis of “why this historic downturn is so rich with possibilities”

Although in dispute whether or not (as some insist) the Chinese character for the word “crisis” has two meanings, peril and opportunity, the juxtaposition of the two helps to explain Geoff Colvin’s response to a question many business leaders now ask: “How can my company survive and then prevail during the current recession, and eventually thrive in its aftermath?” What he recommends are ten management principles (none of which is a head-snapping revelation) that can guide and inform efforts to achieve the objectives indicated in the question. It is important to keep in kind that Colvin is a hardcore, world-class pragmatist who has an insatiable curiosity to understand what works, what doesn’t, and why…and then share what he has learned with others, with the hope that the information and advice provided will prove helpful to them. I should add that all of his material is anchored in real-world situations. Also, that he is especially talented writer.

In the introductory chapter, Colvin observes: “Performance in the Tour de France is a lot like performance in business and, for that matter, in virtually every realm: the worst, most difficult conditions bring out differences in competitors that were not previously apparent. Such conditions turn leaders suddenly into laggards and vice versa. They determine the winners and losers. Periods of extreme stress and challenge are reliably when dramatic competitive change takes place.” In this context, I remember the outrage expressed by golfers who played in a U.S. Open years ago. The rough was too high, the fairways were too narrow, the greens were too fast, etc. In response to the uproar, an officer of the U.S.G.A. replied, “We’re not trying to embarrass the world’s greatest golfers. We’re trying to identify them.” That is what the “difficult conditions” to which Colvin refers continue to do. Warren Bennis and Robert Thomas characterize them as a “crucible” from which some leaders emerge stronger, others do not.

Colvin devotes a separate chapter to each of the ten management principles. Wherever appropriate, he also offers an explanation of especially important issues or developments. For example:

o  Why “this historic downturn really does offer new, similarly scaled possibilities. The reasons are specific and hardheaded” (Pages 4-9)
o  “Why we don’t have to wait for the recession to end to see the new world that it’s creating – to glimpse the next episode in the story” (Pages 19-24)
o  How to examine the most significant changes – in six key categories that shape performance — in a company’s competitive world (Pages 27-34)
o  Given the “enormously destructive power of this recession,” which lessons does it suggest that will help business leaders to understand what that its risks are and how to manage them effectively (Pages 137-144)

Colvin observes, “A tendency to avoid reality, to minimize bad news, may lie deep in a corporate culture. But while most cultural change must start at the top, this change can start anywhere. This recession is an unprecedented opportunity to begin such a change.” In most workplaces, there is a wider and deeper sense of job insecurity now than at any previous time that I can recall since the 1930s.

Readers will appreciate Colvin’s generous provision of examples of companies that demonstrate the effectiveness of several of the ten management principles that he recommends. However different these companies may be in most respects, Colvin suggests that their leaders understand the importance of taking five actions that are “simple to state and may seem simple to do, but they aren’t”: (1) They are highly visible and “make it emphatically clear they are present and on the job,” (2) They are calm and in control, demonstrating composure and especially self-discipline; (3) They are decisive, making not only the tough calls but making what Noel Tichy and Warren Bennis characterize (in their book Judgment: How Winning Leaders Make Great Calls) as “the right tough calls”; (4) They show fearlessness by “facing bad news head on without cringing,” addressing dangers in unvarnished terms; and (5) They explain a crisis in a larger context “by giving shape to events that have occurred and are occurring, portraying them as interesting, normal elements of life that may be no fun but [can be dealt with] while learning and growing.” In the healthiest organizations, there are leaders at every level and in all areas who demonstrate these five behaviors.

Credit Geoff Colvin with sharing everything he knows that can help many (if not most) companies to survive and then prevail during the current recession, and eventually thrive in its aftermath. I suggest that business leaders who read this book think of it as a hybrid: a wake-up call/reality check and an operations manual. Heaven knows, the challenges business leaders now face are formidable. That said, they would be well-advised to keep in mind what Henry Ford said long ago: “Whether you think you can or think you can’t, you’re right.” The choice is theirs.

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