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Not Business as Usual

Not Business as Usual
Management professor helping companies think through unsettling questions in unsettling times

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As one of the nation's preeminent scholars of business strategy and policy, John Mahon has long been recognized for his ability to help CEOs tackle the most difficult, unsettling questions.

But since Sept. 11, businesses large and small are more than ever reconsidering how they operate. Major corporations located in our largest cities — and the most obvious targets for future attacks — are reevaluating everything from how they store records to where they locate their offices.

It is no longer business as usual.

"The timeframe in which business operates and makes decisions has continued to shorten, and executives know this," says Mahon. "But the requirements of running global — and even local — businesses are straining ‘managerial' resources.

"Executives need to think faster, act quicker and consider new threats to business as usual — or find new ways to deal with them. These threats can include terrorist acts like those that occurred Sept. 11, rapid downturns in economic activity as a result of growing interdependent economies, or the sudden and unexpected loss of personnel, data or information. Survival of the fittest may not be the appropriate term, but rather survival of those who are flexible and prepared for ‘abnormal' contingencies. This requires some new thinking on the part of executives and a willingness to think out of the box on issues that have not taken up much time in the past.

"The question, ‘How well prepared are we?' takes on new urgency here, as the response, ‘Prepared for what?' has new and broader meaning," Mahon says.

A professor of management, Mahon came to The University of Maine School of Business in 2001 as the first John M. Murphy Chair of International Business Policy and Strategy. His responsibilities include enhancing the study of international business and strategy, and working closely with the University's William S. Cohen Center for International Policy and Commerce.

For 23 years, Mahon served on the faculty of the School of Management at Boston University. He has published more than 80 articles and 75 cases. In his writing, he examines corporate political strategies, public affairs and business, management theory, and the politics of healthcare. He co-authored Industry as a Player in the Political and Social Arena: Defining the Competitive Environment, as well as a series of textbooks on management.

Last summer, he brought together business leaders and educators from Arizona, Maine, New Mexico and New York with counterparts from Canada, the Netherlands and the United Kingdom for a two-day conference, "Conversazione 2001: Public Affairs, Issues Management and Political Strategy." Participants discussed how business and industry could shape governmental policy to improve their competitive climate.

In his current research, Mahon is studying states as competitors — how they attract business, and, in turn, more and better-paying jobs. He holds up Tennessee as a model. And he has begun to look at Maine.

"In the next five or seven years, Maine's going to have to figure out where it's going," he says. "Is it going to be a place for campgrounds and retirement communities? Or is it going to be something else as well?"

He questions what he perceives to be an absence of a plan for broadening the diversity of the state economy. Without more attention to diversification, he says, Maine is in trouble.

"If you don't like high taxes, and if you don't want your children to continue leaving the state for good-paying jobs, you'll need a broader-based economy than you have now. You'll need a plan to get it done," he says.

"And time is not an ally."

On Sept. 11, the Massachusetts-based parent company of the clothing retailer T.J. Maxx lost five top executives when hijackers flew two airliners into the World Trade Center. The international investment firm Cantor Fitzgerald, headquartered in the Twin Towers, lost 700 employees in the attack.

In the aftermath, businesses grew hungry for ways to make their operations safer. Suddenly, the terms "strategic planning" and "crisis management" took on a greater level of complexity. And, Mahon says, recommendations assume greater poignancy.

"I can't help but think Europeans, despite the horror of the attack, might look at all this with a wry smile. Northern Ireland, England, Germany, Spain, Italy, Greece; Europe has been living with this sort of thing for years. We've always thought it can't happen here.

"In corporations, we have strategic planning," Mahon says. "We believe a plan will insulate us. A plan might make us feel good, but it doesn't protect against everything."

Sept. 11 has forced us to reconsider questions such as how we deploy our workforce and how we store our records, Mahon says. For years, the question of data and storage was: What happens if the method of storage goes bad or wears out?

"But we never gave thoughtful consideration to the question, ‘How do we survive without it?'" he says.

Survival of a company is tied to how it responds to crisis, Mahon says. Crisis could be a terrorist attack. Or a car accident that kills the top management team, or a warehouse fire that destroys inventory and critical records.

"I ask executives to think about these things. They want to turn away. They say, ‘Go away, Satan, you remind us of our own mortality.'"

But it's precisely these reminders, Mahon says, that force a new look at a crisis plan that "was written in 1964, that names deceased or retired people as contacts and lists phone numbers that no longer exist."

To adapt adequately to the new business climate, Mahon says an important next-step is the consideration of basic questions. What do most people want in life? Chances are they want to make a contribution to society, and they want to live comfortably, and without fear.

Safety, unfortunately, no longer is limited to concerns about garden-variety auto theft, assault or an apartment break-in. In post-Sept. 11 America, the young business-school graduate might well love the opportunity and financial package a recruiter offers. But she rejects it because she won't work on the 78th floor of the Sears Tower.

"Any reasonable CEO is thinking about decentralization," Mahon says. "Is it smart to have (an) entire organization in one or two sets of buildings? What reasonable measure should (a CEO) be driving for?"

Just as important as the threat of more terrorist attacks is the perception that more attacks are coming. And if you don't believe the power of perception, take a look at the recent financial losses suffered by the airline, travel and hospitality industries, Mahon says.

If executives intend to spread out their operations, they are shopping for new locations.

"Let's be realistic. The chances of being hit (by terrorists) in a place like Maine are extraordinarily low," Mahon says. "It sounds like we're suggesting ambulance chasing, but we're discussing a reality. If businesses are going to be looking for places to move, why not encourage a move to Maine?"

There's a question for state economic developers to consider.

by Gregory Reid
February-March, 2002

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