Turning the Downside Upside Down
When management guru Adrian J. Slywotzky digs into a piece of the strategic management puzzle in his books, he journeys so deep that conventional thinking on the subject is flipped upside down by the time he emerges. In The Upside: The 7 Strategies for Turning Big Threats into Growth Breakthroughs, Slywotzky continues his counterintuitive revelations while delving into the risks managers face, exposing the valuable opportunities that risks can become. An insightful collection of anecdotes and case studies combine to form a map company leaders can use to recognize moments of risk; plan for them; and prepare themselves “to transform them, making real the upside potential hidden within the downside risk,” he writes.
The Greatest Source of Lost Value
Slywotzky starts with the latest Standard & Poors statistics to show how the level of risk is rising for businesses. He writes that strategic risk might be the biggest source of lost value in the American economy. One solution to this dilemma is to hire a strategic risk manager who does his or her job at every level of the company, Slywotzky writes. Once an organization has created this role, the tough work begins. It isn’t easy to keep strategic risks from breaking connections between company and customers while maintaining profits and holding competitors at bay. Slywotzky points out that “strategic risk comprises most of the total risk most companies face.”
Staying One Step Ahead of Risks
To help organizations and managers prepare for the risks that threaten their business plans, Slywotzky divides strategic risk into seven major types. For each category, he offers many lessons learned by the smartest companies on the cutting edge of risk management. By providing a new working model of strategic risk management, Slywotzky reveals a plan organizations can use to stay afloat during and after massive changes in the marketplace.
The first of Slywotzky’s seven risks undermining a company’s future goals is the failure of an important initiative. With true tales from Toyota, Apple and NASA, he describes the vital process of choosing ways to increase the odds of a big project’s success. By revealing the specific actions these organizations have taken to do that, Slywotzky offers a realistic perspective on the difficult challenge of starting something new, whether it is a merger or acquisition, a new food product, a new venture capital investment or a new pharmaceutical product. Since the risk of failure for each of these types of new projects is 70 percent or more, he warns companies not to underestimate the investments needed to win.
Toyota Changes the Odds
Toyota was able to increase the odds of success for its Prius hybrid by going back to the drawing board to improve existing hybrid engine technology, Slywotzky writes. Toyota also improved its chances by creating an open communications system in which engineers openly shared e-mails among all team members to solve problems. Slywotzky reports that the project moved faster because engineers had instant access to answers thanks to the elimination of hierarchical communication and the addition of a system that provided equal access to the entire group. By using bold percentages to highlight the impacts of strategic maneuvers on entire projects, Slywotzky shows readers how each bright innovation reduced the project’s risk to the organization.
Other strategic risks Slywotzky covers in The Upside include customer defection, industry change, unbeatable competition, loss of brand power, loss of profit, and growth cessation. When a company’s growth slows to a stop, Slywotzky urges leaders to ponder the difficult question, “How can you invent new forms of customer demand that can trigger new waves of growth, even in a seemingly mature industry?”
Why We Like This Book
The Upside presents a positive spin on risk, turning its threats into competitive advantages. The Prius is a huge success because Toyota anticipated strategic risks and overcame them. This and other examples show managers and executives how to assess an organization in terms of its “current risk story.”