THE NEW LEADER'S GUIDE TO DIAGNOSING THE BUSINESS.
By: Gottfredson, Mark, Schaubert, Steve, Saenz, Hernan,
Harvard Business Review,
February 2008, Vol. 86, Issue 2
Within a few months at most, incoming CEOs and general managers must identify ways to boost profitability, increase market share, overtake competitors - whatever the key tasks may be. But they can't map out specific objectives and initiatives until they know where they are starting from. Every organization, after all, has its distinctive strengths and weaknesses and faces a unique combination of threats and opportunities. Accurately assessing all these is the only way to determine what goals are reasonable and where a management team should focus its performance-improvement efforts.
Diagnosis Template for new CEOS
Analyze Costs and Prices
--Construct cost and price experience curves.
--Determine costs relative to competitors'
--Assess the profitability of your product lines.
Evaluate Your Competitive Position
--Compare your returns and market share with those of your rivals.
--Measure your market size and trends.
--Assess your firm's capabilities
Understand Your Industry's Profit Pool
--Study customer needs and behavior by segment
--Track customer retention and loyalty
--Anticipate profit-pool shifts
--Gauge the complexity of your products or services
--Assess the complexity of your organization
--Determine where you can simplify processes