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The
October 2008 world banking and economic crisis - triggered by
the USA mortgage lending disaster - has sent most businesses
and industry sectors scrambling. The resulting turbulence is
not unlike that of the post 9/11 period, and also various sectoral
shake-outs in the 1990's and 1980's. All indications are that
this turbulence will last several months, with regulations and
past business practices being carefully re-examined. We also
may well be on the cusp of a whole new economic order for the
future. |
Regardless of what
ensues, these are times that truly test the senior executive's leadership
fortitude!
- Some hair-brained
demands will be delivered to you;
- various clever
(yet questionable) ideas will get offered-up; and
- short-term
pressures will potentially obscure longer-term stability.
Ultimately,
a new sustainable approach needs to be established amid ever-more
complexity and ambiguity. With this in mind, here are 8 fundamental
elements for your leadership review.
[In 2001
the author successfully started-up a new small business only 2 months
before the 9/11 disaster caused significant disturbance to the world
of business. In the 1990's he orchestrated 2 successful turn-arounds:
- 1 in
a Canadian subsidiary of a US multinational business in the midst
of an industry-wide shake-out;
- 1 of a revered post-secondary institution amid an environment
of substantial government funding cutbacks.]
1. Remain Positive, Respectful & Engaged
While this sounds self-evident, it is not. Panic, fear, and an oppressive
Board/CEO can cause even the most capable executive to forget how
his/her personal behaviour affects those around them. Look in the
mirror, get "up on the balcony" and observe your reactions
in the past few weeks.
OK, so the
world is not making any sense, and you are getting conflicting
demands - your followers are looking up to you at this very moment.
They want and expect a leader who is grounded in reality, yet
confident and hopeful. You won't be expected to have all the answers,
but those you lead expect balanced perspective, and will respond
to a positive outlook. On the other-hand, your worries, complaints,
or frantic reactions will get magnified throughout all your employees.
Show good perspective.
When the heat
is on, nothing spells success like r e s p e c t - of others.
Respect their worries and concerns; respect their requests for
direction; respect them as human beings - yelling, demanding impossible
action, issuing ultimatums, and assigning blame simply is not
appropriate. Role-up your sleeves and get involved with them!
Engage with
your employees. Facilitate them through outlining their concerns.
Some executives, especially those with analytical tendencies,
can cocoon themselves during difficult times, trying to figure
out the problems; and assuming they are supposed to come up with
all the answers. Instead, face the challenges together - bring
your people together and positively describe the challenges you
see - and invite them to be part of the solution-building process.
Whatever you
do - be present, be positive, in-the-moment, and genuinely involved
with your team!
Let go of the need to "have all the answers" and show
everyone that their ideas and suggestions will be considered. This
is the time to be a facilitative Role Model!
2. Strengthen Relationships/Partnerships with Clients & Key
Influencers
When was the last time you spent a day visiting your key clients
and influencers?
Whether you answer "last week" or your memory fails you
- that's OK.
Get out and visit/connect with them now. Spend the whole of next
week doing it!
Let your customers know you appreciate their business. Genuinely,
find out what challenges they are wrestling with, and whether or
not there might be an opportunity to address the issues together.
The stronger
your relationships, the less likely your clients will cut their
ties to you in turbulent times.
I am constantly
surprised by how many senior executives do not get out and meet
with their customers/influencers. This is actually the time to give
it top priority! You might even identify some new opportunity as
you explore together the things they face.
Influencers
- government/politicians, regulators, media personalities, association
leaders, investment analysts, and more - need to hear what you are
doing. They need to see your confidence and genuine concern. And,
often they want to know your plans. Maybe you should share a little
more than usual in these unusual times.
3. "Growth" is Good - "Replacement" a Reality
- Know your Market Dynamics!
In Western business circles we have become conditioned to expect
endless "growth" - in profitability, in market capture,
in product penetration. Our pensions and retirement investment expectations
are built on the assumption that companies will achieve 7% + annual
ROI. There is a lot of pressure to grow.
In reality,
many consumer households are "full" of TV's, microwaves,
clothing, etc. There are only so many hours of eyeballs watching
TV channels. Many businesses are extending the number of years they
get out of computers/desks; some are even reducing the number of
company cars in their fleet, their office square footage, and advertising/sponsorship
initiatives. Now, many consumers are in a "replacement"
or "maintenance" purchasing cycle. Many European markets
have seen this "replacement" marketplace for several years
- even some shrinking.
As Dr. David
Foot - Canada's leading demographics expert says: "Demographics
can explain 2/3 of everything in the world!" The other 1/3
of course, can be affected by psychographics, design, marketing,
economic forces, unexpected natural disasters, and more.
As the executive
in charge of your business area, be sure you know your true customer
market dynamics. What demographic, psychographic and economic factors
are at play?
Where are the growth niches, where are the replacement market segments?
What innovation opportunities exist to grow or indeed replace market
uptake of your product, program or services?
I'm all in favour
of stretch targets - assuming they are reasonably unreasonable!
While there is no excuse for laziness, and executives are
expected to motivate their team to exceed targets; there also has
to be grounding in reality and an opportunity for market uptake.
If your product/service has become "tired", seen value
slippage or hit saturation; then it is time for new innovations.
4. Ensure Value of Products/Services - Pump-up Innovation
Our promotional brochures, website pages, and presentations to the
Board are full of assertions about the Value-add of our products/services/programs.
But, is it really so?
- Does the
prime-time TV Ad-spot still deliver the valued audience it did
last year?
- Do the cell
phone or laptop features today justify the same price as 6 months
ago?
- Do the civic
government services really justify the proposed tax increase for
this coming year?
- Are designer
jeans really worth the $300 price tag?
My sense; we
are reaching the limits of continuously rising price tags.
My own research in the past, frequently repeated in new settings,
has shown that less than 50% of customers know of or value our "value-add"
services.
One of the valuable
things you can do personally is to run a few focus groups with,
or take out some questionnaires to a representative sample of clients
and potential clients. Get that first-hand feedback regarding your
products and services, and the value attached. Alternatively, bring
some clients in to your offices, at say Friday lunch sessions -
so all employees can hear them answer the questions.
On the other
hand, it is well proven that consumers and businesses will pay more
for innovation. Innovation can drive new market opportunities, hold-on
to existing markets as people replace products with increased feature
expectations, create new niches, enhance loyalty and fuel real growth.
Apple Corp. has done quite nicely in this respect in the last few
years.
So, during Turbulent
Times pump-up the innovation juices in your team!
This likely means you will have to run some counter-intuitive initiatives:
- Allow people
MORE time to interconnect, share and invent together;
- Encourage
outward exploration of leading practices, competitor offerings,
client interface;
- Invest in
training sessions and/or team symposia that challenge your
people to think differently and practically apply thinking from
different contexts.
Our products/programs/services
simply have to ensure their "value" perception and reality
evolves along with the expectations of the communities we serve.
This is true for businesses, government departments, and NFP's.
5. Revisit
your Strategic Plan
Having completed items 1-4 you will be in a good position to revisit
your current plan and strategic assumptions.
- Are you "positioned"
properly in the marketplace?
- Are you going
after the appropriate client segments with the appropriate products?
- Are you able
to enhance value or strip out un-needed elements of your services?
- What should
you stop doing? Can you eliminate low margin activities- or are
they things that truly influence higher margin elements?
Given the Turbulent
Times, how will you modify the Critical Success Factors for the
coming year(s)?
How might your measures of success be modified in light of the new
economic conditions?
Can you still reasonably attain budget? Break-even?
As the executive
leader, one of the most strategic things you contribute is
in defining "the right things to do", while it is up to
your people to "do these things right".
Now, be sure
to communicate effectively the new Priorities and Tactics to your
team; take enough time to answer their questions and help them understand
the new context and the behavioural shifts required. Re-inforce
these messages weekly!
6. Execute
Well - Leading Change is a "Contact Sport"
Even in non-turbulent times good execution of Annual Plans is important.
Now, more than ever, it is critical.
Unfortunately,
I have been observing and remarking for some years now, the widespread
propensity for many senior leaders, managers and white-collar professionals,
to seemingly "float" around the workplace adding little
value whatsoever. We are busy being busy, distracted by the drive
to attend many meetings and engage in important conversations, visit
clients, etc.; but then I wonder: "who is doing the real work?
Who is actually putting pen to paper? Where is the value creation,
inventiveness, or delivering of the goods?"
Seriously!
- Who in your
operation puts in a highly productive day (day after day), and
consistently delivers according to or above expectations?
- When you
indicate that things must change, do you actively roll-up your
sleeves and facilitate those changes yourself? Do you have an
image in your mind of what a changed/improved operating environment
looks like in action? Do your people "get" how next
week's work will actually be done differently to create, deliver
and mobilize new value to customers?
- Is your technology,
computers, software being used to the fullest extent to ensure
efficiency?
- Simply asking
staff to change is not good enough. Telling them exactly what
to do is also inappropriate. Facilitating dialogue and
new trial actions/pilot initiatives, with good feedback cycles
and appropriate coaching from the executive is the mark of an
effective leader of change.
Role clarity
and team member expectations are two of the most common source of
poor execution. As one of the senior team leaders in your organization,
especially amid turbulence, you should ensure that every single
person on your team knows:
- Their specific
deliverables, timelines and what new "quality" expectations
look like in delivery.
- How they
relate and inter-relate to others in the organizations - who depends
on them, and who they depend upon to execute flawlessly. Encourage
proactive communication amongst those who are interconnected and
occasionally 'test' the system for understanding.
- Team goals,
expectations for learning from and leveraging one another.
7. Do a Smart
review of Expenses and Staffing
In threatening times it is tempting and frankly easy for the executive
to declare a suspension of travel, expense accounts, and/or other
areas of expenditure. This looks like you are taking serious action.
Further, it is compelling to announce a 5 or 10% cut in staffing.
Now you are really looking serious.
However, these
across-the-board cuts are often short-sighted, and may actually
hurt the organization in the medium term. Expense restraint does
make sense in a careful manner.
Look into your
expenses on a more selective basis. For example, compared to budget
or last year, which areas of expenditure are running behind? Maybe
you can actually eliminate this area for the rest of the year. Alternatively,
where are we overspending or spending on/ahead of budget. Can savings
be made here? Of course, look at the top 5 areas of expense. Smart
reductions in these areas may actually be able to save you more
than the across-the-board cuts. Plus, they won't de-motivate to
employees making expenditures on valuable things like travelling
to visit key clients, going to training that will actually boost
their business results, or knowledge-sharing exchange that can enhance
performance across the team.
Staffing is
another strategic area to assess appropriately.
" Are there areas of service/feature delivery that are not
seen as value-add? Are there people providing work that has little
bearing on the core business and marginal contribution to financial
results? Then the jobs related to these services could be reduced
or eliminated.
" Are there
poor or marginal performers that management has avoided taking the
tough decision to let go? Now is the time to shed truly poor performers.
This is actually motivational to other employees who may have been
"carrying" them for some time, or been frustrated by the
poor performer getting paid 100% for 70% work/effort/results.
Whenever I have
joined an organization, I have found several poor performers with
thick HR files full of documentation. Turbulent times demand you
pull the rip-cord for the enhanced security to everyone else.
Live within
your means, on a personal level for sure; but also within the business/organization.
Are you using Class A office space where Class B or even C is perfectly
acceptable? Will the $1,500 laptop do just as well as the $4,000
version? You get the point. Now, have a discussion with staff so
they get the point too. In fact, encourage staff to take these principles
into their personal lives. It is quite likely that pressures from
home and family can surface in the workplace - leading to aberrant
behaviour from some who are a little desperate in other dimensions
of their life.
You don't have
to become a social worker, but because most of us spend the majority
of our life at the workplace, then you might want to hold some regular
round-tables to address the personal stresses and concerns to ensure
we are all making smart choices on a daily basis.
8. Keep The
FUN Factor!
These times are demanding, possibly stressful for everyone.
But that doesn't
mean we can't laugh and have some fun! Laughter is good medicine
and stress relief. A fun environment stimulates creativity, innovation
and productivity.
What activities
can you plan for each week in the coming month that will juice-up
the FUN Factor?!
- Popcorn Friday
afternoons?
- Wacky hair
day?
- Staff Talent
show
- Goofy Awards
event
- Creativity
Session with a Master Artist
Keep your sense
of humour alive!
Action Now!
As you face these turbulent times, the pressures on senior executives
are enormous. Shareholders/ Stakeholders are demanding results amid
markets that shift without any logic. Customers are shifting their
expectations and decision time-frames. Colleagues and staff are
looking to you for stalwart leadership and some motivation for their
own actions. A review of these eight elements above, perhaps even
engaging others in the review, will help you ensure you have a grip
on the fundamentals of your enterprise. The sooner you can do so,
the sooner you can settle things out and start moving forward with
both purpose and fresh energy.
In the infamous
words of comedian Larry the Cable-Guy: Get'er Done!
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More
"Wisdom" from Larry the Cable Guy
1. A day without sunshine is like night.
2. On the other hand, you have different fingers.
3. 42.7 percent of all statistics are made up on the spot.
4. 99 percent of lawyers give the rest a bad name.
5. Remember, half the people you know are below average.
6. He who laughs last, thinks slowest.
7. Depression
is merely anger without enthusiasm.
8. The early bird may get the worm, but the second mouse gets
the cheese in the trap.
9. Support bacteria. They're the only culture some people
have.
10. A clear conscience is usually the sign of a bad memory.
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Quotable
Quotes:
Drucker on Management:
Capitalism
as a social order and as a creed is the expression of the belief
in economic progress as leading toward the freedom and equality
of the individual in the free and equal society.
I believe
it is socially and morally unforgivable when managers reap huge
profits for themselves but fire workers.
Peter F. Drucker, 1989; from The Daily Drucker
On Governance:
We are
countries of large ambitions and though we are different, we are
similar, ... Our ambitions lead us to improve the material and
spiritual wealth of our peoples and to promote decency, good governance
and human rights throughout the world.
Fred Mitchell, Minister of Foreign Affairs, The Bahamas
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