Help Wanted: a Chief Knowledge Officer

Now name the famous companies that went broke in the bigger (but still modest) 1990 to 1991 recession. You can't, because there weren't any. Normally, blue-chip companies that have survived a number of recessions don't go under in a mild recession. The big casualties of 2001 failed because they lacked a strategy for managing the demise of their old business models. Had they possessed such a strategy, they might have bought themselves enough time to build new models that would have led to future growth.

Skillfully managing a decline is not a management failure, even though myopic executives often view it as one. If an organization has the courage, discipline, and intelligence necessary to become the only big-time survivor in its industry, it will often find that there are profits to be mined for years to come. General Electric, often described as America's best-managed company, can be seen as a collection of sole survivors: electric locomotives, power systems, and aircraft engines. The company understands that managing through a maturing market is even more critical than seizing on an emerging one.

A company's knowledge chief tries to determine when an industry has matured, when it is smart to retreat, and when the time to exit has arrived. Those who lead may choose to ignore such intelligence, but they should be forced to listen to it.