short term, high impact
Management education relies a lot on the analysis of case studies and to memorize an array of economic theories. Equipped with this knowledge, managers aspire to outperform their peers to be selected for promotion. Yet, the truth is, task performance holds no information on leadership skills and management theory is, with few exceptions, building on... Continue Reading →
friendship is a great start for business, yet there is a red line, when friendship becomes the breeding ground for Nepotism, challenging shareholder interest.
For Generation X, born between the mid 60’s and late 70’s, blessed with the illusion of everlasting growth, and the succeeding Millennials, spoiled by the amenities of the modern information society, COVID was a hard stop from full throttle. When talking about startups, thoughts are with the young Bill Gates, smiling at a police camera... Continue Reading →
In professional sports, mental readiness is key for champions. This is highlighting the importance of being mentally balanced also for senior executives. The Non-Executive Board must observe and nurture the mental health of the firm’s top executives in addition to overseeing the firm and acting as the interface between shareholders and executive management, to create resilient and sustainable organizations. Executives are skilled, able, and well-meaning! Yet, in situations of rapid change,... Continue Reading →
Cash constraints and scarce liquidity are notorious in Distress and Turnaround situations and often characterize situations of rapid change for many companies. Maneuvering under these conditions is often a question of discipline and applying the right tools in a timely manner. Challenges are faced on many levels of the organization, but ultimately it comes down... Continue Reading →
COVID-19 has catapulted us to collaboration 2.0. The black swan event of a global pandemic has disrupted the work-environment. The urge to adapt is inevitably forced from the outside on companies, creating a situation of rapid change, where the dynamic of the transformation keeps accelerating. Companies are struggling to retain their operational integrity shaping the... Continue Reading →
High emotional engagement of the executive management can flaw the assessment of the situation of the firm and the decision, to discontinue an ineffective strategy. Yet, the lack of adaptability has been identified as a major reason for bankruptcy. This is intuitive, understanding, executives are maneuvering through vast uncertainties every day. In situations of rapid... Continue Reading →
“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” “What brought it on?” “Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.” Ernest Hemingway, The Sun Also Rises Entrepreneurs and executives with experience in... Continue Reading →
Bankruptcy rates are closely linked to GDP volatility. In OECD countries the regular insolvency rate is around 8%. Though dramatic for the individual firms, this is a healthy process for the economy, as part of economic Darwinism, selecting the weakest market participants. Companies, failing to adapt to changing market conditions as a result of inertia,... Continue Reading →
COVID-19 has quickly evolved from a far-away tragedy, to what is now also a large economic threat to businesses all around the world. Numerous companies are finding themselves, suddenly facing situations of rapid change, where the dynamics of the transformation process are forced from the external and keep accelerating. Due to globalization, supply-chain processes, and... Continue Reading →
Chief Executives carry the responsibility for shareholder returns, numerous jobs, and compliance of the firm on their shoulders. Workdays are never finished after 8 hours, and weekends are generally not off. Top leaders are assumed, to rely on a stable and supportive relationship, to emotionally balance for the responsibilities and stress levels associated with the everyday... Continue Reading →
CEOs are traded just one level below Batman. They are rock-star-cherished for success and condemned to eternity to corporate no-man-land, upon failure. To monitor, observe and discipline this league of its own, shareholders appoint Non-Executive Directors (NEDs) to the Board of Directors (BoD). A (subtle) tension is often observed between the NEDs and the CEO.... Continue Reading →
Activist Shareholders raise their voice over the legitimate interest, associated with their actual investment. This is competing with the economic interest of other shareholders. Activities of Activist Shareholders are also eligible to distract the management's focus and attention. The role of the Board of Directors (BoD) includes to balance the different spheres of interest and... Continue Reading →
Management is facing investors, engaging directly in strategy and operations. The perception of Activist Shareholders is ambivalent. The impact on the company can vary from delivering higher returns but also causing significant inefficiencies. For the management, it is a thin line, how to answer to calls from shareholders, in order not to disconnect from its investors, but also not... Continue Reading →
The common understanding of investors is over-simplified. Authorities disregard irrationalities, as well as degrees of financial sophistication. The idea, of an idealized rational investor is flatten out the spectrum of different investor types. This creates misalignment with regulations as well complexity for investor relations. Current research identifies five major types of investors, based on behavioural... Continue Reading →
The Board of Non-Executive Directors (BoD) can contribute significantly to the long-term and sustainable growth of a firm and offers similar benefits as good (and expensive) top consultants or strategic departments in the corporate landscape. The role and composition of the BoD determines success or failure in everyday life. On the other hand, increasing competition,... Continue Reading →
Following the right strategy is the key to long term going concern of a firm. As markets keep ever-changing, for mature companies, it’s vital to review the implemented strategies and also foster adaptability to new market conditions; whereas Start-Ups are observed to launch with mistaken market assessments and competitive strategies into the rough waters of competition. Both observations are... Continue Reading →
If the executive team gets stuck in any of the five stages of the "process of depression" during the turnaround management, it is likely to lead to the bankruptcy of the firm. Severe troubles of a firm are often paralleled by a situation of rapid change, where the dynamics of (involuntary) transformation keep accelerating and exceed the... Continue Reading →
It is fair to say, turnaround specialists, are often onboarded in the very last moment of distress situations. For firms, this can be dramatic, as the onboarding of a turnaround professional increases chances for going concern from (only) 12.5% to more than 90%. Reasons are linked to the degree of the ability of an organization... Continue Reading →
To secure going concern for a firm, a turnaround professional should on-board before the final struggle for economic survival has begun. If waiting too long, going concern is at stake and it is more promising to go to Las Vegas, to preserve investments. The suck of the downward spiral Root causes for distress situations putting going concern at stake... Continue Reading →
Steve Tobak from CBS MoneyWatch identifies three phases for a turnaround, in a situation of rapid change. The most important initial starting point of claiming control over the turnaround process is forgotten. When on-boarded, stopping the firm's downward trend is critical and the core objective of the turnaround CEO. This aims for multiple stakeholders, including investors,... Continue Reading →
As a rule of thumb, a turnaround is considered something in the region of 12 for up to 30 months. Due to many uncertainties, the timeframe is varying. The objective of the turnaround is to reach break-even of the firm (again), or for start-up and growth firms, getting to the verge of scalability. Three milestones mark... Continue Reading →
10 facts on turnaround situations (US data, research by TMS - Turnaround Management Society). 172 businesses file for bankruptcy in the US per day, this translates into 320'000 jobs lost every year due to distress situations of firms. Many turnarounds could resolve distress situations and lead to success if understanding and managing such situations of rapid change well.... Continue Reading →
In autumn 2014 another promising and emergent Swiss Start-up filed for bankruptcy. Sadly, this is rather the rule than the exception. As out of every 11 serious ideas, only one succeeds. This delivers an attrition rate of approximately 90%. From the investor's perspective the numbers are even more frustrating, as "survival" is something significant different... Continue Reading →
The concept, society has been arranged and governed by, for the past couple of hundred years, is disrupted by the digital transformation. This is happening right now. Today. It is doubtful, if political leaders have anticipated this, nor if they will be qualified to manage through the increasing uncertainties and eroding governance. As the link between the governance of... Continue Reading →
Digital markets are ruled by a very few players. It will be difficult for other market participants, to keep competitive.
The majority of start ups fails for precedented and avoidable mistakes. Though innovation needs a degree of freedom to evolve, the discipline, applied by the venture capitalist's whip can help the management, to focus on the right spot. Though uncomfortable, this might be critical to channel creativity and align with commercial success and ROI. Innovation... Continue Reading →
A new wave of acquisitions is on the horizon for the Swiss online and media industry On 17th of August the fundaments of the Swiss media industry were shaken by the announcement of Ringier. The 182 year old Swiss publishing giant plans to join forces for marketing its online advertising with the SRG, the public broadcaster... Continue Reading →
3 rules to prepare for disruptive innovation The responsibility to set up the organization for future challenges and manage downside risk is a task for the non-executive board. This calls for active and technologically affluent non-executive directors. Being a board member is in today’s industry far from honorable seats for the “good-old-boys-club", neither it is the eligible... Continue Reading →
Buy now, to create competitive advantage in times of rapid change The shock of the latest decision of the SNB to no longer defend the floor of 1.20 for the CHF to the Euro is not yet gone, but quickly the smoke vanishes. For now, it is important to quickly assess the situation, analyse the... Continue Reading →
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