Avoiding Corporate Death: Part III

In previous postings, I’ve mentioned employee retention and morale. Let’s take a look at how the data plotted for “likely financial performance.”
By Robert A. Rudzki, SCMR Contributing Blogger
September 04, 2012 - SCMR Editorial

The global research results demonstrate a clear relationship between an organization’s overall Beat the Odds (BTO) score across nine core principles, and key corporate longevity issues such as employee retention, employee morale, industry rank, and financial performance.

In previous postings, I’ve mentioned employee retention and morale. Let’s take a look at how the data plotted for “likely financial performance.” For survey participants who indicated that their organization’s future financial performance was likely to exceed their corporate cost of capital (red line in the Figure below), the BTO scores were significantly better. A similar pattern emerged for “recent financial performance.”

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The research white paper has other graphs and analyses. So, if you like data, or graphs, you can download the entire white paper here

What does it all mean?

Simply put, the survey’s results are a “wake up call” to organization leaders regarding the importance of continual diagnosis and attention to core principles. In the current, dynamic business environment, it is easy to become consumed with daily emergencies and managing complexity. In fact, as the survey’s results suggest, most organizations are among the “walking wounded” long before their problems manifest themselves in their financial statements.

That is why senior leadership of organizations must set aside time to focus on periodic and comprehensive health checkups for their organizations, and pay attention to core principles on an ongoing basis.

What exactly are the nine “core principles” I refer to? My next posting will cover that.



About the Author

image
Robert A. Rudzki
SCMR Contributing Blogger
Robert A. Rudzki is a former Fortune 500 Senior Vice President & Chief Procurement Officer, who is now President of Greybeard Advisors LLC, a leading provider of advisory services for procurement transformation, strategic sourcing, and supply chain management. Bob is also the author of several leading business books including the supply management best-seller "Straight to the Bottom Line®", its highly-endorsed sequel "Next Level Supply Management Excellence," and the leadership book "Beat the Odds: Avoid Corporate Death & Build a Resilient Enterprise." You can reach him through his firm's website: http://www.GreybeardAdvisors.com

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