Innovation/Global Risk

Managers: You Are Missing Opportunities Daily!  Unfreeze!

By Shlomo  Maital  

  

 

A common reaction to crisis, among ordinary people, is simply to freeze.  Facing danger, risk or threat,  many of us simply become incapable of doing anything. 

  Apparently, this is equally true of highly-paid executives.  A new study by the global consulting firm McKinsey, published in the September 2011 issue of McKinsey Quarterly, * reveals that “executives are foregoing opportunities that, despite today’s volatility and uncertainty, are probably worthwhile”.  

   According to McKinsey’s global survey of CEO’s,  two-thirds of the respondents believe that their companies are underinvesting in product development.   This, despite the well-known finding that recession and its aftermath are the times when competitive rankings within industries change the most, with the ‘bottom feeders’ tending to rise, and the ‘top teams’ tending to fall.  The firms that improve their market share and competitive position are those that seize opportunities inherent in global crises.

    Last year, together with my colleague D.V.R. Seshadri, I published the book Global Risk/Global Opportunity, showing how talented managers and entrepreneurs can transform global risk into massive opportunities.  Apparently, according to McKinsey, nobody read the book or is even interested.   Like us ordinary people, those who lead global businesses seem to be reacting to global crisis, volatility and uncertainty simply by ‘freezing’ – by avoiding any risky investments or product development programs.  In general, facing danger, ‘freezing’ is the worst thing we can do.  And it is also the worst thing our business leaders can do.  Nonetheless, that’s what they are doing. And so, incidentally, are our political leaders, especially in Europe.   

   I wonder how this damaging paralysis can be cured.

  • “A bias against investment”, Sept. 2011
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