Category Archives: 1feautred

Decision making and risk

June 6, 2017 By in Risk, 1feautred Tags: ,

My willingness and ability to take risks and manage them often comes up as a topic of conversation.

Let me explain how I got here. In 1989, after completing my first year at university, I spent the summer as an intern at the Abu Dhabi Investment Authority (Adia). I found the world of investments fascinating and as part of that education I was told to read the book Market Wizards by Jack Schwager, a compilation of stories about traders.

One story that stuck in my mind was about a new trader who could not get himself to start trading. He did not know how to make or take a decision. So his manager walked over to his desk, picked up the phone and executed a trade on behalf of the trader. The manager then informed the trader that if the trader sold the position and the price went up, then the trader would be held responsible but if he held the position and the price went down he would also be held responsible. The manager’s tactic was brilliant, he did what should happen to all of us – he took away the trader’s option to do nothing. Continue reading →

Strategic Downsizing

December 20, 2015 By in Management, 1feautred Tags: ,

I have been involved in downsizing at many companies and have been exposed to both the theory of downsizing and the horror of the reality. In today’s business environment we are seeing faster downsizing than usual, but in many cases still not the most effective approaches.

Where senior managers and business owners make the biggest mistake is in understanding their biggest risks in these scenarios – morale. The problem with morale is that it takes time to build and is easy to shatter. The idea that damage to corporate morale can be quickly regained is false and leads to counterproductive strategies.

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Crisis Response Strategies

March 10, 2015 By in Strategy Cornerstone, Strategy, 1feautred Tags: , ,
This entry is part 3 of 3 in the series Strategy

In a world of uncertainty management is constantly evaluating potential risks as they unfold and deciding how to respond.

At one end of the response spectrum is what might be called the Anglo-Saxon Fast & Furious model: ignore all risks until they become an existential threat of such dire proportions that there is only one available response and it is blatantly clear to all involved.

At the other end of the spectrum is what might be called the Asian Ancient Wisdom model: treat everything as an existential threat at all times and avoid taking any proactive decisions whatsoever lest it lead to greater danger.

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Operational Value Creation

October 21, 2014 By in Private Equity, 1feautred Tags: ,

Many of the PE firms that I have dealt with have had difficulty in deploying an institutional approach to operational value creation post their investment in a company. Most PE firms simply revert to expending a large amount of resources in the pre-investment analysis and due diligence phase and then settle on one or two board seats to manage their assets post investment. The large imbalance resource expenditure pre and post investment leads is a warning flag. Although the board is the correct way for a PE firm to manage its assets post investment it cannot rely on the standard model of a board member acting independently. The same resources that analysed the investment need to support the board directors in governing the investment. This same analysis is also useful for companies in transition whether due to internal or external shocks.
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