《Mangement lesson》.pdf

s t r a t e g y p r a c t i c e J U N E 2 0 0 9 Management lessons from the financial crisis: A conversation with Lowell Bryan and Richard Rumelt Two business strategists discuss the nature of risk, the effectiveness of performance-measurement systems, and the difficulty of getting governance and incentives right. Allen P. Webb 1 This conversation is one of three installments summarizing Lowell Bryan and Richard Rumelt’s reflections on the implications of the financial crisis. This first installment focuses on the broad managerial implications of the crisis. Over the next two weeks, we will publish two additional installments. The second examines the public-policy response to the downturn, and the third explores what the crisis means for corporate strategy today. Eight months have passed since the collapse of Lehman Brothers punctuated the global financial crisis, touching off reverberations in the real economy that continue to reshape the business environment. Is it too early to start drawing management lessons from the crisis? Lowell Bryan, a director in McKinsey’s New York office, and Richard Rumelt, a professor of strategy at UCLA’s Anderson School of Management and the originator of the resource-based 1 view of strategy, don’t think so. In December 2008, they began formally addressing what strategists should make of the financial crisis, when the Quarterly published Bryan’s “Leading through uncertainty” and Rumelt’s “Strategy in a ‘structural break’.” In late April, McKinsey’s Allen Webb asked Bryan and Rumelt to reflect together on the most important lessons executives can begin to draw from recent economic events. While acknowledging, in Rumelt’s words, that “it takes about fiv