Economic indicators can be difficult for CEOs, CFOs, and treasurers to absorb. When things are good, the indicators open the door to spending, investment, and engaging in a bit more risk. When the indicators are bad, there is a tendency for those in charge to focus heavily on risk, reduce expenses, and avoid a strong push for growth. Unfortunately, these management adjustments to weak indicators can harm a company’s growth and future sustainability.
This idea prompted a recent conference of CEOs and high-level management to discuss their own business plans and the current state of the global economy. The conference, called “Redefining Reality for Sustainable Profit Growth,” was held in January in Washington DC and saw close to 100 professionals in attendance.
One prominent speaker at the conference was Mr. Rattner, who was in charge of the government auto bailout of General Motors. The bailout, widely viewed as a success, gave Mr. Rattner a case study to examine and discuss during his time at the conference. He addressed how the restructuring helped the company achieve sustainable profits once again. He stated, “You have to have a culture that is vigilant around costs. GM was sloppy and lost its edge.”
A very important lesson taken from the case study of GM is that companies need to “kill complacency” and encourage – in fact, embrace – a culture of change, especially in an uncertain economy. Otherwise, complacency will lead to an eventual ending of growth that will hurt the sustainability of the company in the future.
Additional lessons were to ensure that management and employees “understand and support your company’s culture.” A focus and championing of innovation should be a primary driver of a company’s management team. Achieving sustainable profit growth is possible at all times; it takes the will, creativity, and skill of an excellent team willing to make the changes necessary.
To read more about the conference and the information relayed from the case studies examined there, be sure to use the link above and read the source yourself.