THERE is a staggering lack of common sense in the corporate strategies of a surprising number of companies.
Often the worst culprits are the biggest firms, as demonstrated by the near-collapse of Bank of Scotland parent HBOS. This bank should have had a simple business model but managed to mess things up spectacularly, and had to be rescued through a Government bail-out and takeover by Lloyds TSB. There are many less extreme examples.
So it is always a relief to hear of strategies that make perfect sense.
In recent days, it was almost a delight to read in Scottish cashmere specialist Johnstons of Elgin's annual results statement that the family-owned company had taken the decision to maintain its workforce, in spite of a downturn in business last year resulting from a milder winter in 2011/12. It did this to retain key craft skills.
This decision played a part in pushing it into a loss last year, reducing efficiency greatly.
Johnstons was happy to look through this short-term pain and take a longer view. Sure enough, its sales are rebounding this year. And, crucially, the manufacturer of jumpers, shawls, hats, scarves and cloth still has the necessary skills to meet demand from a discerning global customer base.
The greatest common sense often seems to come from long-established family companies with a formidable collective memory of all sorts of economic situations. Johnstons of Elgin goes back as far as 1797.
Another business that is a fine example of making brave decisions with an eye on the long term is John Watson & Company, the Glasgow printer which traces its roots back to 1824. This firm, which has just left family ownership through a sale to Multi-Color Corporation of the US, has been operating in an even tougher sector than Johnstons. There have been no end of casualties in the printing business.
But John Watson, who stepped down as chairman of the Glasgow printer on October 1, made some big calls during his decades with the company which ensured its success.
He did big volumes of work in the 1980s for the US electronics giants which had set up in Scotland, including Compaq and Motorola.
He saw the writing on the wall and decided to specialise in designing and printing labels for the big Scotch whisky companies, which proved an extremely shrewd move.
Such big but essentially simple calls are often the ones that make the big differences for companies, their employees and their owners.
Those who become too obsessed with the latest quarter's figures or corporate fads, restructuring for the sake of it while rhyming off a load of jargon about synergies and all the rest of it, are often the ones who at times appear almost to lose sight of their actual business.
When it comes to Stock Market-listed companies especially, far too much value is destroyed by taking short-term decisions. Just imagine the clamour from big institutional investors if a listed company declared it was not cutting its staff even though it would run up a loss because it wanted to retain skills.
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