UK business leaders have their heads in the sand as the economy goes into sharp decline, says the Hay Group’s report, ‘Fight or Flight?’ It exposes what Hay describes as a “startling lack of forward planning” among British businesses.
Just over half of the 120 senior business leaders questioned (40 of whom were in financial services) admit they had the “wrong strategy” for economic slowdown.
Some of it’s down to lack of planning — 18 per cent admit they’ve only just started tackling the downturn — but a large part of the problem’s that UK bosses are playing ostrich.
While 78 per cent recognise the need for action and even admit their current plans may be wrong, 68 per cent have no plans to change direction. Instead, they’ll just downgrade targets to reflect lower sales.
Only a very small minority are planning for the upswing, showing a surprising lack of opportunism.
Some blame short-termism for forcing them to make myopic decisions — which is a bit hand-wringing. But Hay also identifies inexperience as a fundamental issue — these CEOs are part of Brown’s ‘Boom Generation’ and know only stable markets and low inflation.
Nearly half (46 per cent) admit they don’t know how to handle economic turmoil. Worse, 45 per cent believe they lack the vision to steer their companies through the coming difficulties.
So this small band of UK bosses, while demonstrating admirable frankness, is totally bereft of the abilities that surely should’ve got them to the top in the first place — decisiveness, risk analysis, planning, execution. It takes courage to change direction, says Julian Baggini.
Forecasting is hard — some would argue impossible. (Although Warren Buffett’s certainly made a fair fist of it, his hurricane bet notwithstanding.)
But it’s part of the job — it’s risk management at heart. Who hired these people?
