Corporate Boards and CEOs Say – Blame It On The Weather!

Good companies on proper foundational footing should be able to weather a storm. A real one or an economic sector rotation hitting their industry – however, it’s often easy to blame missed earnings in any given quarter on the weather, yes, the weather – or some freak of nature – a natural disaster for instance. Okay so, let’s talk shall we?

Do you remember the Japanese Earthquake and Tsunami a year ago? Well, the people of Fukishima sure do. So to do all the companies in Japan, all the manufacturing companies of high-tech electronics and automobiles. The power was out for a long time, and then there was energy rationing, and everything was shut down. These Japanese industrial manufacturing companies’ losses were staggering; in the hundreds of billions of dollars.

Supply chain disruption can be an economic disaster for a large corporation. It can set a new trajectory with the growth trends of the company, and cause complete chaos in any given industry moving forward. Especially as many of the component makers are in various countries. When the big floods came in Bangladesh there were shortages and companies scrambled making new vendor partners in other parts of the world. It is quite possible that much of that will never come back again to the country.

The cell phone industry, right at the birth of the smart phone age was devastated by wildfires in New Mexico taking out a chip plant. Some companies never fully recovered, for instance Motorola, which was sold many years later to Google. At the time of that wildfire disaster other companies scrambled like mad to find smaller vendors to make up the difference. That changed things for years to come, and the industry has never been the same sense. Today there are even new players which may not have had a niche opening to get their foot in the door. There will always be winners and losers when there are disruptions in supply chains.

Nevertheless, I would submit to you that there is no excuse for being unable to overcome natural disasters or massive supply chain disruptions. A smart company with a strategic mindset should always have a plan of attack in case something of this magnitude occurs. Now then, there was an interesting article in The Wall Street Journal on November 14, 2012 titled; “Beware of Companies Bearing ‘Sandy’ Excuse” by Specer Jakab.

Right, just as there is no excuse for not having a secondary plan, it’s not okay for companies to use a big weather event or natural disaster to bring out previous hidden losses blaming it on something beyond their control. In discussing all this recently with a group of college business students I was reminded and reiterated something that General Electric’s Jack Welsh once stated; “I don’t care what the economy is going to do, we’re going to do well, you show me what the economy is doing, and I’ll show you how we will overcome it.”

Indeed, I think that’s the right attitude whether you are trying to win a war, market share, or maintain shareholder’s equity and quarterly profits. There’s just no excuse, and we have far too many excuses and blame games going on in our major corporations, and even with our own government. There is no excuse for losing a war because at that point excuses don’t matter anyway.

Indeed I hope you will please consider all this on a philosophical and business level, and stop making excuses for your corporation – because quite frankly I don’t want to hear it. Either perform, or quit, and if you make excuses you should expect to be fired.

Source by Lance Winslow

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