What's Your Problem?

My bosses are too risk-averse...

by Jeremy Bullmore
Last Updated: 31 Aug 2010

Q: As business development manager for a medium-sized company, I'm becoming increasingly frustrated with senior management, whose obsession with avoiding risk during the downturn means that they are continually refusing to give me the go-ahead to capitalise on opportunities that previously wouldn't have existed. We're a cash-rich business that can now afford to buy small competitors to great advantage, but the FD refuses to see it this way. I'm straining at the leash to get these deals done!

A: This may sound a little harsh on financial directors, but there's no doubt that some of them quite enjoy tough times. Recessions make it a great deal easier for them to do what they quite like doing anyway, and that's to be fierce about expenditure. (In fairness, I bet your FD is equally of the view that all business development managers are reckless expansionists who need to be kept on a tight rein.)

At times like this, no acquisition, however shrewd, is going to prove itself instantly; so your argument has to be that, when the downturn turns up again, your business will emerge competitively stronger.

There's plenty of evidence that those companies that can afford to invest sensibly during difficult times prosper disproportionately later. So what you need to do is put together a closely argued, well-documented case to your CEO - not just to your FD - for an opportunity budget; a strictly monitored and limited sum, representing a modest proportion of your company's available cash, for prudent investment now.

Analyse and approach those potential acquisitions one by one and you should be more successful. But avoid phrases like 'I'm straining at the leash to get these deals done!' That's enough to scare any reputable FD witless.

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