Growth is widely seen as the fundamental evidence of successful leadership. If you’re not rising, you must be falling. And if your business is falling – or, an equally grave sin, stagnating – then it can’t be very well run.
Yet sometimes decline is inevitable. A manufacturer of cassette tapes in 1983 could do nothing to halt their obsolescence in the face of the CD, but if they managed that decline well they might have had a chance of diversifying before it was too late. Indeed, it is often a logical strategy for a firm to cut costs and reduce operations in one division so that it can invest in another.
Knowing how to manage decline successfully is therefore an undervalued business skill – at least in most companies.
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