- The Master Cyclist Management Wheel
- An Old Classic Sets the Stage for Our Master Cyclist Beginning
This chapter is from the book
This chapter is from the book
This chapter is from the book
An Old Classic Sets the Stage for Our Master Cyclist Beginning
"Knowing when to act is as important as knowing what to do."—Lakshman Achuthan, Managing Director, Economic Cycle Research Institute
To end this chapter, I want to leave you with a highly compelling example from the slim but nonetheless important work of Professor John McCallum—one of the earliest advocates of managing the business cycle for competitive advantage. This story aptly sets the stage for the numerous examples to follow, even as it illustrates why, as Lakshman Achuthan of the Economic Cycle Research Institute asserts in the preceding excerpt, "knowing when to act" is strategically just as important as "knowing what to do":
Retailer Montgomery Ward is the classic example of what can happen when an enterprise miscalculates the direction of the macroeconomy for too long and by too much. Believing that depression always followed a major war, chairman Sewell Avery did not open a new store between World War II and the mid-1950s. Sears took the opposite tack, opening new stores relentlessly, particularly in the fast-growing suburbs.Sears was betting on strong, post-war growth driven by pentup demand. Sears took off; Montgomery Ward never really recovered and eventually filed for bankruptcy. Many factors were involved in the dramatically different post-war paths of these legendary Chicago retailing rivals. The crucial fact remains that one was right about the macroeconomic direction. The other was wrong.
In the chapters that follow, you will see this same kind of battle played out in myriad intricate ways as we use a treasure trove of real-world examples to systematically work our way through the Master Cyclist management wheel. In the course of what should be for you both a very interesting and highly entertaining journey, one abiding fact will stand out.
In an increasingly global and fiercely competitive economy, the line between corporate success and failure is now being drawn by the ability—or lack thereof—of the modern executive team to first understand the business cycle in all of its strategic and tactical richness and then proactively manage that cycle for competitive advantage.