Publicly held companies are, naturally enough, more frequently in the public eye than private companies. Their acts, their results and their shortcomings are the subject of scrutiny by analysts and shareholders, because these items have an impact on the reputations of the former and the financial health of the latter.
This alone doesn’t make business continuity for public companies any tougher. The real complicating factor is the pressure to maintain share prices, often driven by earnings per share.
This in turn can dictate certain suboptimal short term measures and make it more difficult to plan for the long term.
The case of a certain large IT vendor is an interesting example.
The vendor in question is Dell, the company that managed to outdo even Hewlett-Packard in terms of PC sales and also the company that was returned to private ownership in 2013 when economic conditions got rough.
Now back in the hands of Michael Dell (Dell’s founder) and partner Silver Lake, Dell has recently again topped the charts in quarterly PC shipments. While PCs may today seem lacklustre compared to the latest and greatest in mobile computing, the PC market is still sizable – around $120 billion per year at the moment. It may have faded compared to other markets, but there is still money to be made.
Factors that could be influencing Dell’s success and reinforcing its business continuity include the ability to focus on strategies and customer relationships that span greater periods than the quarterly reporting cycle of public companies.
Instead of stop-start investments and pricing tactics to try to tweak the share price upwards and meet shareholder demands, Dell act in accordance with customer requirements.
Some of the blunders or difficulties experienced by its publicly held rivals (under shareholder pressure?) have not hurt Dell’s profitability either.
There seems to be an argument to suggest that stock market pressure is yet another challenge that business continuity managers in publicly held companies must take into account.