Tuesday, August 28, 2012

Boards of management: the third option


The three main option come from the stock market. The stock market is a place where you have to think fast and error can cost a fortune. Analysts feed the stock market with advice on individual stocks. Any such advice is provided with a main cause, or is it to buy, sell or hold. There are nuances to each other and some analysts use different terminology (this stock will outperform the market ...), but to buy, hold and SELL are the main choices.

The stock market is a very transparent market in which a single action is easily traced and benchmarks.
This organization is completely different "markets", where the start of a project, purchase a product or a new business development you can not really be compared to another scenario.

Yet, the choices for the director are the same: buy, hold or sell.

What is also the same is that management consultants and most of the directors on the one hand and market analysts, on the other, they share one characteristic: they are unbalanced in their general councils; in the aggregation of advice on financial markets, BUY outweighs HOLD and SELL. Banks are reluctant to advise selling. For many obvious reasons.

In the same line of reasoning, the buy recommendations of the consultant will exceed SELL, HOLD recommendations or at least, there is no gain for the consultant, even if the best option for an organization is to maintain the status quo.

The similarities between the two worlds do not match exactly. The Sell advice for example, would mean getting rid of a product, an application, a method of an employee or a department (within an organization), but this requires more than just a single action.

But the idea is the same and with this information you know that most people will recommend action (Buy is the most abundant, followed by SELL) because there is a transaction in question. But before you try out both options, you should try to convince themselves and the organization, there is perhaps a third option.
Hold on.

Hans Bool ......

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