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Strategic Flexibility–Managing in Disorderly Markets
Contractors, like political leaders are making management decisions based on conditions we are not familiar with from past experience. The rub is, however, governments had no experience dealing with this post-pandemic disorderly market and, even with the best of intentions, their decisions were inappropriate and ineffective.
Disorderly Markets–A Case Study
Contractors are used to managing in volatile markets that go up and down in predictable cycles. This post-pandemic market, however, is not simply cyclical or volatile. It is disorderly.
The CFO Risk Manager
It is time to bring the CFO out of the back office and join him or her in an active risk management program.
Making Book
By isolating the most common causes of project failure, then weighting them according to their impact on the thousands of case histories I used in the sample, I found that the causes of project failure were both identifiable and measurable, and that the Project Selection Program could predict with an excellent degree of accuracy whether a contractor could complete a project successfully/profitably.
Project Selection Realities
While choosing projects is always a gamble, a skilled CEO will use his/er experts (CFos or senior accountng managers) to set the odds in their favor.
The Gambler
Every bid submitted and contract signed should only be executed after data experts (your estimators and your Chief Financial Officer) have analyzed the relevant economic environmental factors (impact of inflation, labor costs, supply shortages) and have assessed the bottom-line risk of winning or losing.
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