A Booz & Company study reveals that only 17 percent of companies are poised for a profitable future.
by Ashok Divakaran and Vinay Couto
Very logical and powerful
Since the economic crisis, many companies have been trying to figure out the best way to re-position themselves for greater performance and success in the future. Clearly the answer involves some combination of growth strategy and cost management. Over the past several years, working in a variety of industries, we have seen firsthand that companies that do three things together seem to be better positioned for a sustainable return to high performance. First, they create clarity and coherence in their strategy, articulating the differentiating capabilities that they will need to win in the marketplace. Second, they put in place an optimized cost structure and approach to capital allocation, with continual investment in the capabilities critical to success, while proactively cutting costs in less-critical areas to fund these investments. Third, they build supportive organizations. They redesign their structures, incentives, decision rights, skill sets, and other organizational and cultural elements to more closely align their behavior to their strategy, and to harness the collective actions of their people