The Market, The Analyst and The CEO
“The Idea that business is just a numbers affair has always struck me as preposterous. For one thing I’ve never been particularly good at numbers, but I think I’ve done a reasonable job with feelings. And I’m convinced that it is the feelings- and feelings alone- that account for the success of the Virgin brand in all of its myriad forms.”
Richard Branson- Virgin Group
Here are NBT we have been beating the drum for an evolution in the management practices of the past since the beginning. The traditional models of management just don’t work too well for creating adaptive, innovative and engaged organisations. The management practices that are firmly grounded in the Industrial Era focus on the content of the business, not on the message or the effects – of that content on people. People are the key to successfully performing today and into the future.
A well placed and connected contact of ours, recently asked us to firstly forget the rhetoric of big business, then they questioned us ”what do you think CEO’s are most concerned about really?” We said the changing business environment, business models and things to that effect. Our contact said yes true…in part but in reality the main thing keeping CEO’s up at night is analysts. They bend over backwards to ensure that they are kept sweet, Leading analysts can get through to the CEO in super quick time and CEO’s these days spend alot of time selling their numbers or why the numbers will eventually stack up. As our friend suggested many CEO’s appear dominated by the power of the analysts, apparently that’s what’s keeping many CEO’s awake at night.
An interesting insight for us and it’s interesting that so many businesses still focus all strategy purely on the numbers, even when a situation can arise where better than forecast profits doesn’t even guarantee upwards share movement, actually, if a few influential analysts believe that the balance sheet doesn’t signal the future then strong profits could even be a catalyst for a slight drop in shares. The market is based on emotion and feeling- despite it seeming completely rational it’s actually very human in nature.