currency cycles
Loans that demant a lot of time and effort
A partnership needs to identify the objectives of the relationship. For example, I worked in a manufacturing setting establishing a partnership between a company and its union. Their common objective was to grow the business. But growth required retooling the production line and increasing automation.While the company and union had a single common objective, each also had its own separate objectives. The company wanted to improve the production rate by 25 percent while reducing work defects by 10 percent. The union did not want the company to lay off employees in the process.
This group spent a lot of time and effort documenting their objectives and involving all the partners. Because of the documentation, all stakeholders understood the outcomes expected in the partnership. They could all see what was in it for them and the other parties if the alliance achieved its goals. Before I bring parties together and develop a mutual vision of the partnership, I have each group meet separately. In these separate meetings, they create their own vision of what they want from the partnership. Then I bring the parties together to share their individual visions. Inevitably the group begins to identify areas they have in common. That is the start of the mutual vision and the first step for creating common objectives.
Introduction to credit operating leverage
For the last couple of years the broad economy has experienced an extraordinarily high level of operating leverage and consequently since 2000, companies have cut costs. The best evidence of that elevated level of operating leverage is the very low rate of industrial capacity utilization. Despite the modest improvement since 2001, utilization is still at levels not seen since the 1982 recession. On the one hand, that is a sign that businesses continue to suffer from overcapacity. Looked at it another way, however, the low-but-improving rate of capacity utilization is an indication that profits may grow above average in the future.