As I observe how most corporate leadership is performing in our economy, concerns arise. Whether it's worry over the stock market, the government, or too much or too little bailout, our consumer and corporate confidence is at an all time low. Here's what I see many executives wanting to do:
1) Survive - live to fight another day; wait for stability
2) Protect cash - spend nothing unless it's direct expense or generates revenue
3) Take few risks - protect instead of create
4) Make no changes - the known is less stressful than the unknown
5) Attack expense - increase profits by cutting costs, and not growing revenue
6) Grow only the short term - if results are immediate, do it; if not, don't
Let's look at each of these with a bit of analysis:
1) Survival to me means we hold the status quo; we don't rock the boat, we wait for a less stormy sea. We pick a better time. This may be fine for the here and now, but hunkering down with a low profile is seldom the right thing to do in the longer run. We miss opportunities and we lose by wasting them.
2) Protecting cash is one of the most prudent things we can do in the short run. However, when we hit bottom and start recovering, we need to aggressively invest it. The return will be geometric because growth has been stuffed under the burden of our worry for so long. Are we at the low point now? I think we are very close.
3) Taking few or no risks does not mean we are static, but rather that we are actually back sliding. How did our organizations get to where they are now? Not by doing nothing. Again, this can work when used sparingly, but not with a steady diet. The trick is to do your homework, take well calculated risks, and reap the rewards.
4) Failing to change that which is broken is fatal. When we recognize policies, procedures, or routines that are flawed, we must take action. We cannot pretend that they don't exist. Our people see them too, and are demotivated when change doesn't happen. Fix it and learn. If it's still broken, then fix it again. Instill courage; that's what leaders do.
5) Cutting expense is another thing we must do in tough times. However, when we don't also invest in future growth, our folks may think there won't be much of a future. Morale continues to suffer. We again miss the opportunity to make money to offset our losses. We are growing, or we are contracting. Making mistakes of commission, rather than omission serves us so much better.
6) Living only for the near term can be short sighted, even if one's intentions are good. It can miss the solid, well planned things that make living worthwhile. Again, adjusting our sights higher and longer is easier as we approach the bottom, but I see some failing to act now, that will cost the company in the longer run. Continue to invest in your people and your customers. The preparation for future success starts now.
In the next article, we will look at the Sales Force and see how we might bridge the action gap on this list of leadership traits.
Tuesday, March 31, 2009
Tuesday, March 24, 2009
Doing Ideas for Leadership in our Down Economy
The following six categories of ideas have resulted from several months of research, years of experience, and the previous articles. As promised, the hope is that they will aid you as you continue your battle to emerge from our economic challenges leaner, stronger, and more successful than ever.
Aggressive – renegotiate leased space; plan for expansion in 2010; increase media, newsletters, and presentations; collaborate within your marketplace; outsource low value added products & services; network, collaborate, brainstorm; seek out and publicize good news; expect much, pay well
Conservative – micro-manage cash flow; conserve cash; keep discipline paramount; reduce insurance costs including health, life, and disability; reduce travel; curtail meetings; know your break even; observe and monitor behavior closely; provide a counter balance to all the negative media releases; use off time to test and evaluate employees; protect what's especially valuable to your company; lead and explain with honesty
Obvious – eliminate products that are not profitable; hold people accountable; develop complementary products & services; lay off underutilized employees; combine duties and reduce positions; reduce number of suppliers; embrace Lean initiatives; follow your Strategic Plan; market, market, market, listen to customers; be proactive with your bank, no surprises; cross-train employees; collaborate with customers; do more with less; use excess time to add more value
Counter-intuitive – hire the exceptional talent that is available; increase marketing budget in growth areas; call on new customers, especially those who’ve never listened to you before; spend money to increase sales rather than to simply cut costs; increase spending, focusing on things that can increase efficiency like new equipment, customer service, and energy reduction; cut costs, not good people; increase middle management and line training; “fire” your marginal clients; re-evaluate company’s position in context of changing marketplace; make downtime productive; increased specialized training; cut costs with thoughtfulness
Fostering Change – readjust goals to make more realistic; find new customers in resilient sectors; look at global markets like never before; eliminate everything that doesn’t add value to your target market; reduce investment in everything that is over offered; increase investment in everything that is under offered; create new elements of value; try, and learn new things; brainstorm on improving work flow; set (collaboratively) lofty goals and then let your managers achieve them; have courage to lay off bottom performers rather than by seniority; look for unhappy customers from you competitors; embrace new technology to add value; seek out new suppliers with new ideas
Maintaining the Status Quo – devoting personal time one to one to improve morale; expand your competitive advantage; communicate to, and stay close to your people; meet one to one with each of your people; increase morale building events; celebrate successes; recognize needs of families such as a spouse being laid off; walk through the operation daily; people are everything, attract & retain the best
Aggressive – renegotiate leased space; plan for expansion in 2010; increase media, newsletters, and presentations; collaborate within your marketplace; outsource low value added products & services; network, collaborate, brainstorm; seek out and publicize good news; expect much, pay well
Conservative – micro-manage cash flow; conserve cash; keep discipline paramount; reduce insurance costs including health, life, and disability; reduce travel; curtail meetings; know your break even; observe and monitor behavior closely; provide a counter balance to all the negative media releases; use off time to test and evaluate employees; protect what's especially valuable to your company; lead and explain with honesty
Obvious – eliminate products that are not profitable; hold people accountable; develop complementary products & services; lay off underutilized employees; combine duties and reduce positions; reduce number of suppliers; embrace Lean initiatives; follow your Strategic Plan; market, market, market, listen to customers; be proactive with your bank, no surprises; cross-train employees; collaborate with customers; do more with less; use excess time to add more value
Counter-intuitive – hire the exceptional talent that is available; increase marketing budget in growth areas; call on new customers, especially those who’ve never listened to you before; spend money to increase sales rather than to simply cut costs; increase spending, focusing on things that can increase efficiency like new equipment, customer service, and energy reduction; cut costs, not good people; increase middle management and line training; “fire” your marginal clients; re-evaluate company’s position in context of changing marketplace; make downtime productive; increased specialized training; cut costs with thoughtfulness
Fostering Change – readjust goals to make more realistic; find new customers in resilient sectors; look at global markets like never before; eliminate everything that doesn’t add value to your target market; reduce investment in everything that is over offered; increase investment in everything that is under offered; create new elements of value; try, and learn new things; brainstorm on improving work flow; set (collaboratively) lofty goals and then let your managers achieve them; have courage to lay off bottom performers rather than by seniority; look for unhappy customers from you competitors; embrace new technology to add value; seek out new suppliers with new ideas
Maintaining the Status Quo – devoting personal time one to one to improve morale; expand your competitive advantage; communicate to, and stay close to your people; meet one to one with each of your people; increase morale building events; celebrate successes; recognize needs of families such as a spouse being laid off; walk through the operation daily; people are everything, attract & retain the best
EQ - Emotional Intelligence: Its Importance to Economic Recovery
Previously, we examined the importance of the Thinking side of Leadership. With that established, we are now going to formalize it by calling it EQ, or emotional intelligence. Since many others have discussed it's importance, it justifies its own topic here.
One of the most important things learned from The Great Depression of the 1930's was that attitude was crucial. FDR went so far as to say that economic recovery was impossible without emotional recovery.
Noted Economist Alan Beaulieu in a recent webinar said we must, "lead with confidence and optimism, with the attitude that we can beat this business cycle." Nick Tasler of TalentSmart stated, "Peoples ability to control and use their emotions effectively is a profound indicator of their business success." It is estimated that 58% of an individuals job performance is attributed to high EQ.
In a recent study, TalentSmart found that, "70% of the most skilled business decision makers also score in the top 15% in EQ." They also found that leaders with a low EQ not only rank among the lowest, but also fail to recognize that their judgement is being tainted by their impatience, anger, or other strong feelings.
Let's compare traits of high & low EQ people:
Low EQ people tend to:
Speak out of frustration, even when it won't help the situation
Avoid others when bothered or stressed
Deny ownership of their emotions and their impact on their thinking
Instead of listening when they are challenged, they become defensive
Become task oriented instead of people focused
Ignore tension, hoping it will go away
High EQ people tend to:
Only speak out when it will help the situation
Keep lines of communication open even when frustrated
Accept ownership of their emotions and others' affect on them
Stay open to feedback & criticism
Show others by their actions and attitude that they care
Embrace the challenge of tension and facilitate positive expression of it
With all this in mind, what in general should we do?
Focus on emotional recovery by:
1) Being aware of our emotions
2) Set a positive tone
3) Show that we care
Now that we've sufficiently prepared for taking our organization through the proper steps to economic recovery with the proper EQ, we'll next examine the actions, or Doing side.
One of the most important things learned from The Great Depression of the 1930's was that attitude was crucial. FDR went so far as to say that economic recovery was impossible without emotional recovery.
Noted Economist Alan Beaulieu in a recent webinar said we must, "lead with confidence and optimism, with the attitude that we can beat this business cycle." Nick Tasler of TalentSmart stated, "Peoples ability to control and use their emotions effectively is a profound indicator of their business success." It is estimated that 58% of an individuals job performance is attributed to high EQ.
In a recent study, TalentSmart found that, "70% of the most skilled business decision makers also score in the top 15% in EQ." They also found that leaders with a low EQ not only rank among the lowest, but also fail to recognize that their judgement is being tainted by their impatience, anger, or other strong feelings.
Let's compare traits of high & low EQ people:
Low EQ people tend to:
Speak out of frustration, even when it won't help the situation
Avoid others when bothered or stressed
Deny ownership of their emotions and their impact on their thinking
Instead of listening when they are challenged, they become defensive
Become task oriented instead of people focused
Ignore tension, hoping it will go away
High EQ people tend to:
Only speak out when it will help the situation
Keep lines of communication open even when frustrated
Accept ownership of their emotions and others' affect on them
Stay open to feedback & criticism
Show others by their actions and attitude that they care
Embrace the challenge of tension and facilitate positive expression of it
With all this in mind, what in general should we do?
Focus on emotional recovery by:
1) Being aware of our emotions
2) Set a positive tone
3) Show that we care
Now that we've sufficiently prepared for taking our organization through the proper steps to economic recovery with the proper EQ, we'll next examine the actions, or Doing side.
Friday, March 20, 2009
The Doing Side of Leadership in our Down Economy
This article is a continuation of how we each might lead when faced with the adversity in our recent economic environment. We previously looked at the thinking side of our response, and then in depth at EQ, emotional intelligence, to do so. We will now examine actions we might take as a result.
If we have objectively and positively evaluated what we've seen and experienced, the decisions we make, the actions we choose to take, will be the most effective. We will have used our positive EQ.
Most good choices begin with a good foundation. These can be aggressive or conservative, obvious or counter-intuitive, fostering change or maintaining the status quo. There is room for all of these at any given time; accordingly, the alternatives must be well thought out through a good process.
Let's take a look at what the components of a good process might be:
1) Collaborative - synergy through playing off each other
2) Objective - using facts & data to see clearly
3) Diverse - respecting each other's point of view
4) Toward our collective strengths
5) Away from our collective weaknesses
6) Supportive of our Strategic Plan
Within this framework let's list some categories of ideas of what can be done with our foundation:
Aggressive
Conservative
Obvious
Counter-intuitive
Fostering Change
Maintaining the Status Quo
So as to add as much value as possible to your organization, in the next article, ideas will be listed under each area. In this way, you can analyze not only what you're considering doing, but also in what area it may fall. Hopefully this can be at least a discussion point among your people and you.
If we have objectively and positively evaluated what we've seen and experienced, the decisions we make, the actions we choose to take, will be the most effective. We will have used our positive EQ.
Most good choices begin with a good foundation. These can be aggressive or conservative, obvious or counter-intuitive, fostering change or maintaining the status quo. There is room for all of these at any given time; accordingly, the alternatives must be well thought out through a good process.
Let's take a look at what the components of a good process might be:
1) Collaborative - synergy through playing off each other
2) Objective - using facts & data to see clearly
3) Diverse - respecting each other's point of view
4) Toward our collective strengths
5) Away from our collective weaknesses
6) Supportive of our Strategic Plan
Within this framework let's list some categories of ideas of what can be done with our foundation:
Aggressive
Conservative
Obvious
Counter-intuitive
Fostering Change
Maintaining the Status Quo
So as to add as much value as possible to your organization, in the next article, ideas will be listed under each area. In this way, you can analyze not only what you're considering doing, but also in what area it may fall. Hopefully this can be at least a discussion point among your people and you.
Monday, March 16, 2009
The Thinking Side of Leadership in our Down Economy
Next month, on April 22nd, I have the honor of addressing the IBA (Independent Business Association of Wisconsin) at their IBA Roundtable, at the Brookfield Sheraton. In several articles I've written in the last few weeks and months, leadership in our financially challenged economy has been a popular topic that seems to change and grow with time, research, and experience.
With this article, and three that will follow, we will look at different approaches to not only surviving our current challenges, but to our emergence as a stronger and more vibrant organization. As thoughts & plans form, there seem to be two distinct components of a sound approach: the Thinking and the Doing. Though this may sound elementary, it ends up being rather complex.
Let's look at the thinking first. Form a mental picture of what you've seen & experienced about our financial woes in the last few months. Think about words that would describe our attitudes, thoughts, and approaches to the meltdown. How about fear, reluctance, & depression, or even panic, paralysis, or hopelessness? How we emotionally react outwardly determines how we respond to, and lead, others.
So let's break down the Thinking into observations, emotional reactions, and appropriate attitudinal responses.
An observation is when we see something. We cannot control it. It is what it is. And even our initial emotional reaction is not controllable; it is a stimulus and a feeling.
How we choose to respond to that feeling IS up to us; we make a choice. To lead well is to choose well. So we override our negative feelings and choose to think about what we saw in a positive light.
We don't pretend it never happened, but rather evaluate it with confidence that together we will do what is necessary. We have the God given intelligence to competently handle a variety of challenges, when we are humble enough to involve others and forge a mutual decision. A curious blend of confidence and humility, don't you think?
The point is that before we ever take action, we need to already have decided to be cool under fire, and thoughtfully consider anything in a realistic but positive light. This Thinking side is commonly called EQ; it prepares us for the proper Doing side. More on EQ in the next post.
With this article, and three that will follow, we will look at different approaches to not only surviving our current challenges, but to our emergence as a stronger and more vibrant organization. As thoughts & plans form, there seem to be two distinct components of a sound approach: the Thinking and the Doing. Though this may sound elementary, it ends up being rather complex.
Let's look at the thinking first. Form a mental picture of what you've seen & experienced about our financial woes in the last few months. Think about words that would describe our attitudes, thoughts, and approaches to the meltdown. How about fear, reluctance, & depression, or even panic, paralysis, or hopelessness? How we emotionally react outwardly determines how we respond to, and lead, others.
So let's break down the Thinking into observations, emotional reactions, and appropriate attitudinal responses.
An observation is when we see something. We cannot control it. It is what it is. And even our initial emotional reaction is not controllable; it is a stimulus and a feeling.
How we choose to respond to that feeling IS up to us; we make a choice. To lead well is to choose well. So we override our negative feelings and choose to think about what we saw in a positive light.
We don't pretend it never happened, but rather evaluate it with confidence that together we will do what is necessary. We have the God given intelligence to competently handle a variety of challenges, when we are humble enough to involve others and forge a mutual decision. A curious blend of confidence and humility, don't you think?
The point is that before we ever take action, we need to already have decided to be cool under fire, and thoughtfully consider anything in a realistic but positive light. This Thinking side is commonly called EQ; it prepares us for the proper Doing side. More on EQ in the next post.
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