Corporate crisis: evolve or die

A news case, a failing company closing down. An outcome I predicted a year earlier, unfortunately unheeded. One must recover the willingness to take risks in order to grow.

Chronicle of a Death Foretold

The local newspaper reports on a business crisis: a high-quality handcrafted production in the luxury leather goods industry. There are a few dozen jobs at risk, I’m sorry, and I hope a solution is found that will safeguard the business and those who work there.

The news particularly touches me because last summer that company had contacted me and, in the concise framing analysis, I had pointed out in black and white critical issues in the historical business model that could jeopardize the very existence of the company: and they are the same ones that, I read, have led to the disruption today.

I had recommended moving beyond the contract-based business model, focusing on Asian niche designers (perhaps not everyone knows that there is a blossoming of creativity in luxury in Asia), providing them with top-notch “made in Italy” craftsmanship, and the idea was deemed sound and well received by people working in the industry in Shanghai.

Ownership – unfortunately – did not feel they should invest in the lines of business development I had identified, and not because of lack of means, but out of fear of taking a new path “wedon’t feel like it, let’s continue as we have always done” was their response.
Would it have been a successful choice? No one can know. Certainly continuing on the same path did not help.

It is not a matter of disowning the past; what gave a good result in a certain condition may not give more in a different condition. Once then one could also be “content” with an acquired position and not want to grow, markets and margins allowed it, today one has to reach certain sizes to stay in the market because,

If you don't grow up... you're going backwards

Recovering the thrust of origins

Let us not hide behind the lack of state aid and contributions or bank support (if there is so much the better but it cannot become the excuse with oneself to do nothing), Italy has become the seventh world power with courage, sacrifice and promissory notes.

fabbrica anni 60

Let’s be honest then, corporate crisis is not always the result of unpredictable fate, globalization, banks or who knows who (much less the euro).

Italian entrepreneurship must be able to renew itself, it must find the courage to invest for change; traditional models (of production, distribution, management) are in crisis and must evolve if they are to survive.
The entrepreneur is not required to know how to do everything (in fact, he or she would be better off delegating more, avoiding wanting to manage every little trifle).

But the entrepreneur must understand the big picture, must know when it is time to change, must have the courage to change, and must know how to choose the people he needs to change. This is his work, his real added value.
The Italian labor market today is as business-friendly as ever (1), there are many professional skills available at a reasonable cost: move, focus on people, choose those who give you confidence, introduce new points of view, fresh and different experiences; get help to innovate: open new foreign markets, improve internal organization, digitize the company…

(1) try running a business today in the U.S., where there is full employment and literally no employees available (if you need someone you have to go and take them away from some other company, with costs that are easy to imagine).



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