Tough Questions for Tough Times

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					                      Tough Questions for Tough Times
                         For Financial Service Organizations

                        What to do in a ‘downturn economy’?

Get an accurate read on the environment and your position in it

   1. Identify the specific changes / challenges we are facing in the marketplace? –
      WHAT are they? / What is the IMPACT on us? – short and long term

   2. What are the ‘marketplace success indicators’ in your business?

   3. Is our core business strong enough to withstand the stresses created by the
          a. Strong innovations can help to maintain pricing position
          b. Sufficient variability in cost structure can help protect margins
          c. Sound capital structure can provide financial flexibility

   4. Assess both our financial and competitive strengths
         a. Strong companies – strong financial and competitive
         b. Stable companies – strong financial, but weak competitive
         c. Struggling companies – weak financially and strong competitively
         d. Failing companies – weak financially and competitively

   5. What is not discussed about our present ‘realities,’ that we need to confront?

Internal Assessment

   6. What are our ‘true competitive strengths’ (including what we are best at) and
      ‘vulnerable areas’?

   7. Execution capabilities - Talent / Leadership / Process Disciplines / Technology –
      where are we in these areas?

   8. Our balance sheet and cash position?
         a. Identify a limited set of straightforward initiatives that have the potential
             to make a difference quickly
Strategic Repositioning – first strategy, then budget!!!

   9. Go on the offensive or defensive?
         a. Offensive: Revenue Growth
                  i. Enter new markets
                 ii. Acquire weaker competitors
                iii. Innovate product, service & processes
             Strategic Investments
                iv. Cherry pick competitor talent
                 v. Price aggressively to steal customers
                vi. Implement sales force effectiveness strategies
         b. Defensive: Protect Revenues
                  i. Implement pricing incentives
                 ii. Stay in tune with customer needs
             Protect Profit Margins
                iii. Benchmark and manage costs aggressively
             Preserve Balance Sheet
                iv. Asset and working capital management

   10. Facing the liquidity challenge
          a. Implement a better financial risk management program

           b. Build or buy strategic liquidity (design of capital structure) – cash is a
              strategic asset – how to retain operating cash flow / selling idle assets /
              drawing down bank lines / more flexible purchasing

           c. Monitor your source of value – quality execution requires that countless
              economic, value-based decisions be made at all levels with the company –
              including integrations, dispositions, closures, outsourcing, promotions,
              pricing changes

           d. Move forward to your growth agenda, especially in emerging markets

   11. Have a clear understanding of strategic versus non strategic costs

   12. Does our present ‘business model’ align with the marketplace and our internal

   13. What is the most important ‘change’ (that will make the most positive impact)
       that we need to make to address our current situation and our long term

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