STRATEGIZING by Emanuele Sacerdote.
The extreme synthesis of the economic emergency we are experiencing is that the main macroeconomic cycle has been abruptly interrupted. Most of the economic activities of the ecosystem and of the industrial and commercial chains have been severely halted. The level of braking was synchronous globally, continentally and regionally: effect all-in like in poker.
Apart from the alleged cause of the human-animal viral exchange, the real co-cause that has accelerated the spread of the virus has been globalization. Thus, it could be argued that the planetary economic super-macrocycle has been interrupted by its main engine of expansion, globalization.
Now we need to start again, restart the machine and the real problem will be to reactivate the production and marketing chains.
The question "Where are we going?" it seems to me the simplest to try to give an answer to in this restart phase and there are three possible answers: we go forward, we go backwards or we go around. Let's start with the last one.
We go around. Unlike the next possible decisions, here we try to re-find the lost position. The decision-making context could be something in between going forward and going backwards, with the risk of going nowhere. After managing the inevitable downturn, we will try to re-find the pre-covid position.
Let's go back. Contrary to the previous decision, it is stipulated here that it is better to step back and downsize. This decision will also be driven by the sure negative impact of external or internal factors from not being able to grow significantly. Surely the degrowth phase will be longer and will stabilize downwards due to a general downsizing of pre-covid levels. The appropriate strategic approach is downsize turnaround management.
Go on. It means deciding to continue, possibly even to progress by trying to attack the market. The reference context for taking this decision serenely is probably more positive and the recovery forecasts are more optimistic. There will very likely be a less drastic first phase of decline, but then there will be a lively hope of being able to return and exceed pre-covid levels. The appropriate strategic approach is change management.
In my opinion the worst decision is the first as it projects a very unlikely situation to intercept. Obviously all decisions are honorable, but the last two are the most consistent and the most acceptable.
Part of the decision to be made will have to find the correct relationship between will and power by more realistically evaluating the identity, purpose, vision, culture, strengths and weaknesses that the organization will and can face in the near future.
All the Best!
