Menu
ENTERPRISE STRATEGIES: Consolidation fallout

ENTERPRISE STRATEGIES: Consolidation fallout

Photography has long been a hobby of mine and I often carry a camera with me. While driving to Dallas recently, I pulled over to shoot a picture of a shipping warehouse surrounded by trailers parked in neat rows. It’s an unremarkable photograph unless you know the story behind the trailers’ “CF” logo.

Last September, Consolidated Freightways, one of America’s largest trucking firms, filed for bankruptcy. More than 15,000 workers lost their jobs. Each of those trailers was parked for the last time by someone who drove it for a living. I see the trailers in my photograph and wonder how their drivers are doing now. After a time, I saw another story there. What about all the businesses that relied on CF? Did anyone imagine that an industry icon would mothball its entire fleet almost overnight?

I’m bullish on an IT sector recovery in 2003 but not naive enough to imagine there won’t be casualties.

Ironically, the toughest part of a recession can be the first stage of recovery: consolidation. A lot of familiar players, even some major names that have been around for years, won’t see 2004. Others will have to sell off or abandon some of their prized assets.

For the IT economy, the only thing worse than no spending is a little spending (as we’ll see in 2003). If the market had any compassion, early post-recovery spending would be spread out evenly: All the players would get a share of early expenditures and they’d all return to profitability at the same rate.

But like nature, the market has no heart. When those first few coins start to tumble out of customers’ withered purses, the players’ survival instinct will not be to share them, but to try to grab them all.

That’s not a lament. I don’t expect fairness from business anymore than I believe I could teach African lions to prefer cornflakes to antelope. Nevertheless, I admit I don’t find ruthless carnage entertaining.

Does effective planning require knowing in advance who’s not going to make it? Not in most cases.

When I worked in IT, I built the potential departure of key staff and/or suppliers into every plan. It wouldn’t matter which of them I thought might go first. The goal was to build a machine that would keep running with any of its parts pulled out.

Contingency planning naturally provokes an emotional response. We don’t want to plan for a co-worker’s or business partner’s exit because we wouldn’t want anyone considering our demise. Yet your boss needs to think about life without you. And, if they’re smart, your customers already know what they’d do if your company went belly-up. You would not be denying anybody’s or any business’ uniqueness or value by accepting that your business can’t cultivate dependence.

When the quicksand rises, I don’t counsel standing on the shore and doing nothing. Be a human. Throw out some ropes. Just be sure that none of them is tied around your waist.


Follow Us

Join the newsletter!

Error: Please check your email address.
Show Comments