The smart company lays out strategic planning in a way that’s visible to everyone: For example, if we do this, X will happen, if we don’t, Y will happen. The three important things are volume, retained earnings, and overhead. Your planning also has to account for the positive — you may need 25 extra people. Your date and volume are milestone targets. You’d better be prepared for everything below them. If everyone knows that if the volume drops below a certain level, they’re going to lose 42 positions, it’s not going to be a shock; in fact, they’re preparing for it. Visible planning ties the vital signs of the company to behavior in a self-regulating way. It doesn’t require a chainsaw CEO to come hacking away after the fact. In my work, construction, death on the job is not a matter of if, but when. So, the one-word answer is, plan. What would you rather spend your time doing — bandaging the wounded or avoiding the battle?
Senior Vice President
Bread Loaf Corporation
You have to have a strategic plan in place for contingencies, and whether or not something happens to disrupt your business. That could be an actual call-down list, a roll-call list of the people you feel are the most important in your organization to take care of each department and will enable your communications and your continuity. Make sure you have an emergency reaction team ready to go at a moment’s notice, people who know their responsibilities and their duties if something happens. Make sure you have a standard operating procedure for anything that could happen. Understand where you would get backup data if you lost data. If you lost machines, where is your stockpile of spare machines? Will you be able to use those machines and put them back into work? You also have to have people trained on those old machines as well. Have a plan in place to be able to move to an alternate location in case your location has been disrupted.
M. Christopher Herrera
Arthur Andersen, LLP
New York, NY
You’d have to define the crisis. Is the crisis a further economic deterioration? We’ve addressed that by managing the business conservatively.
If I knew the economy was going to go further in the dump, I probably wouldn’t be hiring to the extent that we are today or investing in many areas with a longer-term payback. We’re cautiously optimistic; we’re investing that way in terms of growing our business, and we’re protecting ourselves from the downside, we hope, by taking a pretty conservative approach to it.
A year ago we might have been branded as foolish to take this approach, not aggressive enough and really missing out on the supposed rewriting of all the business rules that was going on.
One of our core values is prosperity, and when customers invest in an enterprise software company product, they’re really placing their jobs on the line betting that the company’s going to be around. We feel a commitment to our customers not to bet the company, so to speak, and put the company at risk.
Chris Heim, CEO
Eden Prairie, MN
Basically, we’d just make sure that we had enough inventory in the pipeline so if something were to happen to the plant where we produce it, then we would be covered for our customers’ orders. We are making candy, so truthfully, in a crisis, it probably is not the most important product. Beyond just making sure that we have inventory located in different areas in the case if something were to happen to one of the locations, I’m sure that Kraft, being such a large company, has backup plans to move production from one facility to another at a moment’s notice.
Product Supply Planner, Confections
East Hanover, NJ