CIO: Do you need to bring in an outsider?

C Davis Fogg: No. For example, Genesco, the parent of Johnston & Murphy, was once the largest manufacturer and marketer of men's shoes in the US. It threw itself into chaos by a series of misbegotten acquisitions of high fashion and other retailers in the 1970s. Genesco changed key management over the next 15 years like socks every morning. New executives were inevitably hot shots from other industries and companies. The company never turned around.

Then in 1996, Ben Harris, a 28-year company employee, became president and COO. He and two other longtime officers replotted Genesco's future. Genesco had never before set and reviewed meaningful objectives. Harris's measure of success was a version of Economic Value Added, which measures capital employed, return on capital, profit margin, cost. Everyone in the company could be measured by one or more of its components. They turned Genesco around quickly.

That it was handled in an emotionally motivating way is illustrated by a touching incident. When corporate offices were being refurbished, a worker came to Ben and handed him $US4000. He told Ben that his job was measured by cost, and he knew that the company was going though tough times. He took old doors left from the remodelling, slated to be thrown away, threw them in his pick-up truck, sold them and gave Ben the money.

When bonuses came out that year, the man got a bonus.

In my study of 28 companies for my last book, Implementing Your Strategic Plan, the 26 that required drastic action to turn their performance around were turned around by long-tenured insiders. Insiders know how to get things done through the culture. They know where the skeletons and poor performers are hiding, and where the opportunities lie.

CIO: Does Wall Street's focus on quarterly earnings prevent companies from doing a good job both planning strategically and implementing those plans?

C Davis Fogg: It does. But some leaders I know don't worry about the short haul. It drives the managers nuts. Roberto Goizueta [the late CEO of Coca-Cola], who was a class ahead of me in school, told Wall Street to stuff it. I know a number of companies that are run for the long haul. One of them uses a form of Economic Value Added. Others do it according to stockholder value, which is a very, very good measure as long as people don't measure quarter to quarter. IT is such an underutilised power in the marketplace, I would expect right now is a very good time to be thinking about powerful investments to improve market position and efficiency. Particularly if you have cash and your competitors don't.

Of course there's another issue. I have believed for decades that officers of the company should be measured by internal strategic objectives so that they have to meet their objectives before they get their options. When I was officer with Bausch & Lomb way back when, we were not allowed to sell stock unless you were doing something like building a house or going to school.

CIO: Do you think the downturn in the economy has changed the outlook for strategic planning success?

C Davis Fogg: I think it's increased it. People who didn't have good plans are sitting around saying, Oh my gosh, I'd better get my act together. If we get hit with another [downturn] and we don't know where to put our funds, we're in trouble. Strategic planning is a process of allocating resources.