3 aspects for taking tough decisions

3 mins read

Siemens CEO Kaeser and Trigema Chef Grupp have announced that they don't want to fire anyone (due to the crisis) [1-2]. Others have to decide on the length of short-time work that they prescribe for the workforce.

In the past few weeks, I have had some discussions about upcoming decisions. Quite a few are wondering whether they should invest in a new topic.

E.g. Ford had produced 2.4 million respirators in two weeks [3]. Siemens decided against the manufacture of ventilators [1]. Others ponder business acquisitions.

Without knowing what the future will bring, it is quite difficult to make an informed decision. Some, thus, try scenario techniques. Others play through concrete ideas.

In my view, you may filter through ideas and make a decision if you reflect on three aspects.

  1. The identity. Does the idea match the current identity? I.e. Mission, positioning in the market, skills, and culture in the organization. If the idea does not fit into the environment, leave it or build a new organization. Otherwise, you run the risk that the idea feels like a foreign body and does not get the necessary attention.
  2. Business model: Does the idea fit the current business model? Which deviations are there? Which assumptions do you have to verify? The bigger the deviations, the more risky the idea. This is not a bad thing per se, because you can only develop further if you also think through and explore unusual things. But, you should use the modern methods of hypothesis work to cut the risks.
  3. Customer orientation: In times of shortage, the brand doesn't matter. Everything is bought (see toilet paper). But, how long will the deficiency persist? At the latest then the question arises whether they understand your customers well. What feeling do you want to convey to the customer with your product or service? In contrast to the second point, this aspect looks onto the emotional side. Do you understand what intangible assets you need to create for the customer? How does the product fit into users' lives? This is probably the most difficult of the three points if you have never had a relationship with these customer groups. At this point, the sustainability of the idea proves itself when the time of shortage comes to an end.

The importance you attach to these points depends somewhat on the situation. Often, you can take your decision quickly. Especially if you can foresee that your traditional business will last.

If, as with Fuji-Film a few years ago, there is no hope of improvement in the traditional business, your decision will be different. Then you will accept more risks and develop new fields based on your existing strengths [4]. For this situation, you need to give the organization a new self-image or narrative. Mr. Komori of Fuji-Film once said: “You can leave now (because film is dying), or you can stay with me and be part of a bigger company” [6]. Fuji-Film describes itself as a “Never stop” company.

Whatever you decide to do, reinforce the never-stop gene in your organization!

If you would like to know more, please contact me directly +4917647188250 or sign up at https://holgerlaabs.de/newsletter

[1] Siemens

[2] Trigema

[3] Ford

[4] Fuji-Film

[5] https://holdings.fujifilm.com/en#

[6] https://www.youtube.com/watch?v=GcOCtfPVSk4

strategy

I work with clients who have the courage to grow.

Dr. Holger Laabs

founder and CEO
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