Ask the consultant: What can a CEO do to ensure long-term success?
- February 6, 2012 - 10:37 AM
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?
CHIEF EXECUTIVE OFFICER
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.
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