The Hindu Business Line : <I>Manage `polyphonically' </I>

You may call a champion bike racer `master cyclist'. To Peter Navarro, however, the phrase means "a business executive who skilfully deploys a set of well-timed strategies and tactics to manage the business cycle for competitive advantage."

One such cyclist was Johnson & Johnson's Ralph Larsen, mentions Navarro in `The Well-Timed Strategy,' from Pearson (www.pearsoned.co.in) . "We saw this recession coming three years ago. It was obvious the booming economic cycle couldn't continue. We tightened our belts. We focussed on cash flow," reads a quote of Larsen.

In contrast to Larsen was John Chambers of Cisco, a `reactive cyclist'; for, he failed to read numerous signs that the March 2001 recession was on its way. As a result, "Cisco got caught flat-footed in the 2001 recession and was eventually forced to write off more than $2 billion in excess inventory."

Navarro offers a `management wheel' with six segments, viz. capital expenditures and finance, acquisitions and divestitures, human resources management, production and inventory control, marketing and pricing, and risk management. The book lists three sets of favourite forecasting tools that master cyclists use. The first set comprises leading economic indicators, as for example, the yield curve, stock and oil prices, and inflation numbers. The second set of tools has the forecasting models. "Economic forecasts deserve to be taken seriously, not necessarily because they promise to be accurate but because they are more useful than having no forecasts at all," is an apt quote of Peter Bernstein and Theodore Silbert cited in the book.

The final set includes `the monthly macroeconomic calendar of economic reports'. Keep scanning the horizon for reports from other countries too, says Navarro.The true measure of the corporate executive team is not in bullish times, concludes the author. The team should have the ability to manage `polyphonically' at critical and turning points in the business cycle. "At such points, the polyphonic corporation begins to harmonically blend both pro- and counter-cyclical strategies and tactics into an ever-changing and highly profitable mix as it presciently seeks to gain advantage over its rivals and position itself for the next sweet spot or dead zone."

A book worth biking to the shop for.

http://BookPeek.blogspot.com

D. Murali