The March 2009 issue of Harvard Business Review is live at HBR.org. When we went to press with the issue, it was difficult to predict what the balance of 2009 had in store for business leaders. We were still wondering if it would be the end of a tough recession, or the second year of the deepest recession in a generation, or, well, something even scarier.
Things are somewhat clearer now. As today’s news on layoffs shows, we’re not nearing the end yet. We’ve been covering the volatile economy here in the HarvardBusiness.org blogs along with the the daily and weekly business press. The magazine, though, serves a different but equally useful purpose–to leverage its longer lead time to develop articles that are deeply analytical and useful regardless of the length and severity of the economic crisis.
March’s lineup address the economic crisis that’s here and now but with analysis that goes beyond this particular round of layoffs or that piece of the stimulus package.
This month’s case study tackles the painful job of laying off workers. What’s the best approach–focusing on older, more expensive employees? On the bottom 20% of performers? On individual businesses that are no longer a good fit? Our commentators suggest several subtler, more creative approaches to this unpleasant but sometimes necessary work. (We’ve also built a collection of the best HBR articles around this rather difficult topic).
As consumers and businesses continue to feel the pinch, they’ll search out better value for their money. Chinese and Indian companies are brilliant cost innovators, according to Peter Williamson and Ming Zeng in “Value-for-Money Strategies for Recessionary Times” (free for the month of March). Western multinationals need to understand and emulate those companies before their markets are disrupted by lower-priced offerings.
Is your sales team having trouble even getting in the door, much less reaching sufficiently senior buyers? “In a Downturn, Provoke Your Customers” (free for the month of March) suggests a smart way to reach senior people–and close a sale. Rather than push products or “solutions,” figure out what the clients should be worried about. In other words, tell them something they don’t already know. Philip Lay, Todd Hewlin, and Geoff Moore argue that their approach to sales will be even more successful now than in typical times because senior executives are facing bigger, more intractable problems.
It will be years before we collectively understand exactly how risks were so badly mismanaged at the systemic, macroeconomic level during the most recent business cycle. But managing financial risk at the firm level is a more tractable problem, one that René Stulz analyzes elegantly in “Six Ways Companies Mismanage Risk.”
Other articles in this issue focus on more timeless business questions. The CEO of Brazilian energy giant Petrobras describes the journey his company has made from environmental disaster case to environmental role model during a period of extraordinary growth in “The Greening of Petrobras” (free for the month of March).
Big companies typically move their highest-potential employees from job to job quickly, in an attempt to hurry their development along. As a result, these managers don’t stay in any single job long enough to live with the consequences of their decisions. In “Making Mobility Matter,” Mercer consultants Haig Nalbantian and Richard Guzzo offer a nuanced–and cost-effective–take on executive mobility.
Companies are far better at systematizing processes, and then managing for efficiency and quality, than they were just 20 years ago. That’s great for processes that lend themselves to a scientific model, say Joseph Hall and Eric Johnson in “When Should a Process Be Art, Not Science?” But some processes create value by way of their practitioners’ art, expertise, and judgment–and firms make a grave error when they try to eliminate this variability.
When resource-intensive businesses (oil companies, say) invest in a new facility, they have to bet millions, even billions, of dollars years before seeing a return. The Tool Kit, “Option Games,” describes a method for analyzing these investments, and those of your competitors, using a combination of game theory and real options; McKinsey consultants Nelson Ferreira and Jayanti Kar developed this approach with real-options expert Lenos Trigeorgis.
Enjoy the new issue and visit regularly for the HBR Editors’ blog, article collections, audio, video, and more.