Recession

Listen up, biz leaders: It's time to rethink everything

September 4, 2012: 5:00 AM ET

We're not living in ordinary economic times. Every company needs to determine if its strategy requires an overhaul or just thoughtful tweaks. Here's how to start.

By Geoff Colvin, senior editor-at-large

FORTUNE -- Remember when Motorola (MMI) ruled the mobile phone business worldwide? And then Nokia (NOK) did? And then BlackBerry (RIMM) did? And now none of them do? As Fortune headlined a recent BlackBerry article, "What the Hell Happened?"

We all ask the same question about Kodak, monarch of the global photo industry for a century, now bankrupt, while Instagram, a photo-sharing service with a dozen employees, is sold to Facebook (FB) for $1 billion. And while we're at it, what happened to Hewlett-Packard (HPQ)? To Yahoo (YHOO)?

We're not living in ordinary economic times. The convulsions of the past five years have left many business people asking the most fundamental questions about their companies: Will our strategy work in this environment? What must we change, and what must we not change? Do we need a new business model?

MORE: America's workers: A year of ups and downs

Reconsidering strategy can turn into a miasma that consumes endless time and yields nothing. Yet the process is manageable. One way to think through your strategy in today's uncertain environment is to answer three basic questions.

1. What is our core?

A finding that's consistent across cycles is that the best performing companies keep investing in their core no matter how bad things get. Look at what Dupont (DD) did during the Great Depression. Even as profits plunged, the company resolved to keep funding chemical research -- its core -- no matter what. Among the results: nylon, neoprene, and other products that brought Dupont billions of dollars over the following decades.

In good times, companies often wander into businesses for which they command no special capability. Then, when a downturn hits, those non-core businesses blow up and have to be axed. Pioneer bailed out of the grindingly competitive flat-screen TV business in the recent recession. Home Depot (HD) shut down its Expo chain of home design centers. Google (GOOG) closed non-core businesses that sold advertising on radio stations and in newspapers. More

  • Recession recovery blues

    If the downturn is receding, why is my mood indigo?

    By Stanley Bing

    FORTUNE -- Spring has sprung. The grass is riz. So it's reasonable to ask where the birdies is. Because I don't know about you, but I don't see no birdies. I'm tense. I'm nervous. I guess you could say that my consumer confidence is sort of ... leaky. Why should that be? All signs point to a slow MORE

    May 2, 2012 5:00 AM ET
  • Don't fight the last recession's war. You'll lose.

    Opening the managerial toolbox from the 2008 recession to tackle today's economic turmoil will only get you into trouble. That's because the critical elements that affect companies are sharply different today. By Geoff Colvin

    Aug 15, 2011 5:00 AM ET
  • Class struggle

    Writing a check for a soccer uniform, I thought, Gee, when I was a kid, my school had money for that.

    Most of the time I feel okay with the way things are going. I'm not part of the half of our nation that seems to think everything is heading to hell in a handcart. But sometimes I get grossed out by wild discrepancies. A sense of dislocation overwhelms me, and MORE

    - Nov 12, 2010 11:44 AM ET
  • How Wall Street Is Screwing Up The Recovery

    I had to laugh the other day at the way the Market is behaving, but it wasn't a good laugh.  It was one of those dark laughs, full of phlegm and bile, a laugh that dies in the back of your throat, turning before it fades away entirely into a short, sharp growl.

    One day up. Two days up. Then down, down 150 or 200 points.  It's like psychoanalysis. Two steps forward. MORE

    - Aug 19, 2010 1:31 PM ET
  • The uncatered lunch meeting is not worth having

    Just a little note to get the summer started off right. I have noticed a disturbing, post-recessionary trend developing that should, I believe, be killed in its cradle.

    It's the uncatered meeting that takes place during what in civilized societies would be considered lunchtime.

    When I was a lad, I worked for a guy I'll call Walt. Walt was a wonderful guy, except he had one (well, actually more than one, but MORE

    - Jun 1, 2010 11:56 AM ET
  • This just in! Survey finds surveys superfluous!

    According to a new survey conducted in late January by Charles Schwab, 85% of all independent advisors believe that the recession will be over in a couple of years. Two or so, they think. Perhaps a little more. Or less.

    Some believe that it will be over by the end of this year, but not many.

    Others think it's going to be bad until late 2011, although they are in the minority, MORE

    - Mar 4, 2009 1:41 PM ET
  • One store closes, another opens

    Everywhere you look: gloom. But maybe not.

    Gloom, of course, isn't hard to spot. The other day I looked outside my office window, which fortunately, the way things are going some days, is hermetically sealed and made out of extremely strong plate glass. Outside on the sidewalk, on the other side of the avenue, was a long, long line of people that grew as the morning progressed. By 10 AM, it was tripled MORE

    - Feb 27, 2009 9:32 AM ET
  • Our morning analyst reports

    From: Investor Relations
    Sent: Thursday, January 22, 2009 9:26 AM
    Subject: Morning Security Analyst Notes

     

    Overall Industry

     

    • Mark Putznick at Boardman Frakes (which reported a fourth quarter 2008 loss of $4.97 per common share) commented on the U.S. revenue environment stating that everything will decelerate significantly during 1Q'09, although "visibility into the overall picture is murky." He downgraded everything he could get MORE

    - Jan 22, 2009 12:23 PM ET
  • The Consumer Electronics Show gets underway

    Vegas, January 8 -- You wouldn't believe the portions they serve you here. It's almost like they sit planning the menu for people who are looking to keep their weight at a nice, round 300 pounds. Who wants a pizza with scalloped potatoes on it? It's the house specialty where we had dinner last night. The drinks are small and expensive. A vast majority of the waiters look like potential MORE

    - Jan 8, 2009 11:08 AM ET
Anne Fisher

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