- Change your mindset. Recognize that market conditions have changed, and that those changes should call into question many aspects of how you’ve traditionally done business.
- Get your financial house in order. Make tough choices, possibly including eliminating lines of business and issuing more stock, to strengthen your balance sheet and to secure your firm’s fundamental financial health.
- Make a move for market share. Focus on your core business and be on the lookout for newly available resources, both human and asset-related.
- Rethink your reward system. Avoid cutting compensation across the board; instead, find non-monetary ways to reward employees and improve morale.
- Dare to innovate. Taking the time and effort to innovate during the downturn could open new doors in the future. It’s risky, but may result in high returns.
The past year has forced us to think differently about what it means to undertake risk. Additionally, it seems that obtaining actionable information about potential risks is becoming increasingly difficult. It may not be a lack of information that fuels this difficulty; rather, it may be that managers today have such an abundance of information to process—via numerous financial reporting services, for example—that they cannot reasonably evaluate competing courses of action. Much of 2009 will be about figuring out what exactly happened to markets during 2008, but whether managers can use that information to guide their firms successfully remains to be seen.
This entry also appears at Organizing for High Reliability.