Looking Forward to Guide Today

Looking into the Future to Change Today

The CEO is responsible to continuously assess the performance of company. Critical measurements include the timely development of products and services, the deployment of the necessary teams and employees, the market penetration and the accumulation of sales opportunities. If the company appears to be on track, the questions needing answers would include “Can we improve our performance?” and “Do we need course corrections to bring this improvement and what are the odds of success?” If the company appears to be behind on the targets, the analysis would seek to understand if there are significant weaknesses or threats unfolding. Different questions would be asked including “what resources and time will be needed to get back on track?” and “with additional expenditures will the return on this increased investment be acceptable?”

Based on the answers to the previous questions, one technique that can be effective is the 6-month future view and assessment strategy. The CEO will want to assemble the executive staff and together assess what the performance of the company might be 6 months out based on the current situation if nothing affecting the company changes. The key question that needs to be answered is, “If we were able to estimate what our situation will be 6 months out, what might we do today to change the distant view?” The answer to this difficult question may result in planning to make course corrections. It is better to ask this question now, rather than six months from now stating, “If we only had made a change 6 months ago…”

One of the responsibilities of the CEO is to be the company change agent. Many times companies try to make adjustments to the current company direction to improve problematic issues. Many times, short-term solutions to problems may not be enough to turn the flow. This calls for the CEO to make bold moves to decide on whether or not to try to improve the situation. Tough decisions are needed to change the status quo. The company must assess what can be done. The concept of sunk costs enters these thoughts. If the current direction seems wrong, money that has been spent up to this time might not be recoverable. Too often, the level of this sunk cost clouds the decision making of the CEO who may have a personal tie to the company direction; this executive realizes that it may have a tough to explain why things are not working out. The need for a bold change creates high stress and pushback from the CEO’s staff and the operations management who themselves may have a personal vested interest in what has been happening. In some cases, major product developments or significant sale’s programs my have to be scrubbed. Lingering on with current costs or expenses that could result in missing a market window or bringing out an inferior product or service that could be very damaging to the company.  Pouring out more money to offer a bandage to a bad situation many times is can result in costs overruns that may never be recovered.

Being a change agent and making serious course corrections are not always done in negative situations. If things are going well and more product features can be added to improve the marketability of a product resulting in stronger sales forecasts, then the CEO and the management look like heroes. Often, though, when changes are needed to correct a negative situation, these are the times that CEOs do the best to analyze and understand the situation and many times a CEO’s gut level decision is made. In the long run, making appropriate corrections can be helpful. Trusting employees who would expect nothing less will applaud bold moves made by the CEO.

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One Response to Looking Forward to Guide Today

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