Ask the consultant: What can a CEO do to ensure long-term success?

  • Updated: February 6, 2012 - 10:37 AM

question

What are three actions that a CEO could take over the next one to two years to ensure the company not only survives the current economic turbulence but can thrive for the next 10 years?

ALEX ARMOUR

CHIEF EXECUTIVE OFFICER

OFFSPRING SOLUTIONS

answer

No. 1: Try to conserve your cash for the next year. Eventually there will be bargains on everything from overstock inventory to buying out your competitors during times of economic turbulence. If you have the cash and the borrowing capacity, you may be able to position yourself to take advantage of expansion opportunities when other firms may be hurting.

No. 2: When hiring additional people you should be somewhat pessimistic about your projected nonsalary, HR cost per person. Currently, various legal issues concerning our recent health care law are still in flux, which makes labor cost projections very uncertain.  

No. 3: Continue to maintain good relations with your banker or major borrowing sources. The nongovernmental sector of the U.S. economy has been deleveraging in response to the financial crisis for the past two years.

This trend will eventually make lenders hungry for your loan business when an expansion does start.

About the author

David Vang is a professor in the Finance Department at the University of St. Thomas Opus College of Business.

ASK THE EXPERTS

The University of St. Thomas Opus College of Business invites you to participate in the Outside Consultant Q&A column, which appears weekly in Monday Business Insider. E-mail your questions to: www.stthomas.edu/business/schulzeschool/submitquestion.html

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close