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Don’t let the crisis go to waste


PA strategy experts, Øystein Landgraff and Jørgen Stenbakk  have had a byline article published in Dagens Næringsliv  in which they explore the need for restructuring in Norwegian companies.
Øystein and Jørgen explain how the 45% fall in the oil price is having a dramatic impact on the Norwegian economy where job losses of 100,000- 300,000 are predicted. This means there is a need for restructuring and the article outlines the common characteristics of companies who restructure successfully and how to avoid the common pitfalls.

This starts with the need to accept the requirement for major change and not be distracted by managing more minor day to day issues. They show how the most successful companies have been those with the courage to completely transform their businesses such as media companies making major investment in e commerce to reverse declining revenues.

Øystein and Jørgen go on to explain that the other problem companies face is their tendency to invest in the same areas year after year. In contrast, successful companies evaluate the return on capital from different parts of the business and then allocate future capital and talent to the areas that seem to present the most attractive future growth opportunities. They provide examples from the retail and building materials sectors where companies have developed very successful new product ranges.

The article then covers the role of technology in providing competitive advantage through new sales channels, innovative distribution and customer dialogue and follow-up.  In particular, Øystein and Jørgen, highlight the potential of innovative developments to change the nature of production. This means that companies need to involve technology and IT managers in all aspects of business restructuring, from new opportunities for mergers and acquisitions and to what is needed to keep pace with competitors.

The article stresses that “the biggest challenge is not bad strategy, but failing execution,” so those who have to implement the strategy should be involved at an early stage and use testing and learning as part of the implementation process.

Øystein and Jørgen conclude by quoting Winston Churchill’’s maxim "Never let a good crisis go to waste," and saying “We believe that last year's drop in oil prices also has many positive effects. Freed capital and expertise will once again be able to seek out opportunities where the expected return is greater.”

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