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Speed Review: The Neglected Firm

Speed Review: The Neglected Firm

Speed Review: The Neglected Firm

Every Manager Must Manage Two Firms: The Present One and the Future One

by Jorge Vasconcellos e Sa

In The Neglected Firm, Jorge Vasconcellos e Sá, an internationally recognized management and economics expert and consultant, offers a systematic, step-by-step plan with which companies can face their futures with direction and expertise. By focusing on the compatibility of various initiatives and creating a global plan of action, he sheds light on the ways that managers can maximize efficiency and effectiveness when planning for the future.

Review

Nurturing the Company Of the Future
Every company is actually two companies, according to Jorge Vasconcellos e Sá, an internationally recognized management and economics expert and consultant. There is the presentcompany, which deals with the pressing and urgent responsibilities of the day-to-day working world. These tasks include negotiating with suppliers, reviewing cost accounting reports, and phoning customers. There is also the future company, which is involved in reshaping geographic zones, planning strategy, reanalyzing products and clients, and promoting positive change. Vasconcellos e Sá writes that it is this second company that is often neglected and badly handled by managers, and if it is managed at all, it is often done on a nonsystematic basis in episodic bursts or on impulse.

The Neglected Firm offers a systematic, step-by-step plan with which companies can face their futures with direction and expertise. By focusing on the compatibility of various initiatives and creating a global plan of action, he sheds light on the ways that managers can maximize efficiency and effectiveness when planning for the future.

Managing the Future Firm
His approach to managing a neglected firm begins with the creation of a planning department, which takes a place alongside all the other functional departments of the company, such as finance, human resources, marketing, etc. This planning department must be geared toward helping top managers think of new means of being effective in the marketplace and new means of being efficient. Vasconcellos e Sá writes that its role is to help the chairman, either alone or with the help of top managers, to manage the company of the future.

Vasconcellos e Sá's seven steps for managing the future firm are:

  1. Define the present strategy of the firm. This will determine the company's market standing in concrete terms by sampling clients' invoices to determine their geographical areas, industries and segments.
  2. Evaluate the present strategy. This involves using an examination matrix to eliminate the current activities of segments and businesses that offer low attractiveness and low competitiveness.
  3. Create alternatives. This step involves generating new strategic alternatives through client analysis information and industry segmentation. These alternatives can be innovations that are totally new activities in which no other firm is involved, or industry segments in which the firm does not currently operate.
  4. Select the best of those alternatives. Companies must select the new strategic alternatives that are the most synergetic with present operations. Determining whether opportunities and new segments should be followed will take selection criteria that involve resource sharing between present and new activities.
  5. Develop a new strategic plan. This plan must be based on the old segments that were not rejected by the examination matrix and new ones that have been selected by client analysis and segmentation and are highly synergetic with the company's present operations.
  6. Implement the new strategy. This must be done after careful consideration of organizational structures, processes and functional plans. The Neglected Firm concentrates solely on organizational structure and procedural planning, and leaves the functional plans to other authors who specialize in marketing, financing, production, etc.
  7. Change critical departments in search of new efficiency. This final step involves focusing on the new efficiency requirements of the critical departments. Vasconcellos e Sá offers an analysis of how internal tasks can be rendered more efficient with even higher levels of productivity and lower costs.

Detailed Case Studies
Vasconcellos e Sá offers two detailed case studies, from start to finish, which illustrate the practicality of his methods. These firms are Saab, the Swedish car manufacturer, and Caja de Madrid, a major Spanish financial institution. He writes that he chose these two organizations because they offer distinctly different products and strategies, and they show, in spite of their differences, the way the planning concepts and the methodology of The Neglected Firm can be applied to service firms and product manufacturers.

Why Soundview Likes This Book
The beauty of The Neglected Firm is the simple way in which it develops new ideas through carefully constructed steps that reach to the heart of the issues that all companies must face when planning for the future. Vasconcellos e Sá does not mince words, and he has found two case studies that describe his process in detail while shedding light on the universal nuances of his plan. His well-constructed strategy for eliminating the neglect of future planning from organizational structures offers an expert perspective on a subject vital to all companies that want to take innovation, competition and survival seriously.