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Adversity creates opportunity

December 27, 2011

The New York Times reports that US corporations are poised to cash in on Eurozone troubles, acquiring businesses and assets at knock-down prices. The challenge for many European companies arises from a lack of liquidity, as banks are forced to raise capital and cut lending. This has already resulted in a growing number of acquisitions by Chinese buyers.

This lack of liquidity comes at a time when many major contract and project opportunities demand significant up-front investment. So lacking traditional sources of cash, what are European companies to do? One option is that they must pool resources through partnering and teaming arrangements – and it seems likely that this will become more and more frequent in the years ahead.
But partnering requires the ability to collaborate – and hence a reputation for such an ability will be of great value.
So will the financial difficulties of the West lead to new thinking about the allocation of risk and a greater readiness for them to be shared? Will performance management also become a cooperative activity, focused on mutual success?
Adversity can lead to a sense of helplessness. On the other hand, it frequently leads to new approaches that generate fresh opportunities. For European companies especially, it appears 2012 must be a year of commercial creativity.
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