Strategy During Difficult Times

     Peter Drucker, the widely-known management expert and self-described social ecologist, would ask a CEO five essential questions to help him frame his thinking and strategy for action. Drucker would often ask: What is our mission? Who is our customer? What does the customer value? What are our results? What is our plan? In writing Shaking the Globe, I asked myself those questions when thinking about international business opportunities and risks. It struck me that when the globe is shaking in the world of business—as it is now with the financial services and housing market meltdown—some people will understand the fast-paced interconnected business dynamics they are facing and react accordingly. These people are the best of the best. Others might read the headlines and say, “Put up the walls, protect what we have, prevent the globe from shaking as long as we can.” Unfortunately, an ostrich with his head in the sand will quickly lose his breath and expire. No one can corral the global forces of today’s business world. But, in some capacity you can shape events.

     The United States has become the world’s largest sovereign wealth fund in the last six months based on (1) its investments in banks and automobile companies at the end of 2008, and (2) the additional planned investments in targeted industries highlighted in the $787 billion stimulus plan signed by President Barack Obama on February 17, 2009. Until September 2008, Abu Dhabi controlled the largest sovereign wealth fund, starting it in 1976 and growing to $625 billion invested in companies around the globe. The global business world has shaken yet again—now the U.S. government invests directly in business. Consequently, corporate leaders must now find ways to tap into these funds and identify the specific customers they can supply. Corporate leaders must also advertise and invest in distribution methods to reach these customers and provide services and products in new markets. The rule of thumb must be to ensure that investments are made in ways to improve the standard of living, not just to pay off the mistakes of yesterday.

     Now, more than ever, we need courageous and talented leaders who can deal with these forces to foster the development of a healthy market economy. Otherwise, we run the risk of having our economy directed by political forces rather than market forces. The rise of emerging countries and their view on market economics will matter now and in the future because America is losing its ability to keep those markets open and growing. It is critical to develop strategies for partnerships between private and public entities, domestically and internationally, especially as we face increasingly consequential population migration and intensifying consumption of natural resources around the globe. •••

Global Perspective: Items of Note

Thomas Friedman of The New York Times writes: “Sorry, friends, but this is not the American way. Bailing out the losers is not how we got rich as a country, and it is not how we’ll get out of this crisis… When it comes to helping companies, precious public money should focus on start-ups, not bailouts." Read more....

Wesleyan University's Sean McCann wonders about the zeitgeist of today’s America resulting from the current economic troubled times. In The Wall Street Journal, he asks: “Will this crisis produce a ‘Gatsby’? The 1930s galvanized a generation of authors and filmmakers, recasting the American journey.”

The Wall Street Journal provides line-item list of stimulus act spending.

A time of strategic change for The New York Times Publisher and Chairman, Arthur Sulzberger, Jr., pictured here with Blythe McGarvie.