How to Manage in Times of Crisis Part 3

This article resumes with quotes from Ichak Adzies new book. He continues on with integration issues for the organization.

What does not kill you makes you stronger. Act. A crisis is your time to show your true colors as a leader. Look inside, because that's where the solution is. You cannot control the outside, but you can control the inside.

You believe the danger is that while you manage the long term solution, you'll go bankrupt. So what do you do? You must manage on multiple fronts - cash and systemic integration. And preserve your strengths.

Be cautious about firing people. Get rid of the non-producers, but you should have done that long ago. Why does it take a crisis to make you do the cleaning up? If you are 20lbs overweight, do you cut off a foot? Now your weight is fine, but you don't have a foot. In tough times, what do you do personally? Throw one of the kids out on the street so others can eat?

It doesn't make sense to cut critical people. Cut fat, not muscle. How much will it take to re-place, re-hire, & re-train good people later on. Conserve your assets so when the upturn occurs, you are ready to roar again. Alternatives are to have everyone work fewer hours, or challenge your folks, with their additional time available, to come up with innovations and efficiencies. In so doing, you will also preserve the culture of mutual trust & respect you have built with human resources.

Every organization needs to align 4 sub-systems: 1) Your purpose 2)Responsibilities 3) Structure of authority 4) Reinforcing behavior. Tell everyone you want to hire, this is our value system; if you don't share these values, don't work for us.

Be careful with authority. As the company grows bigger & bigger, the founder can't make every single decision, so he delegates. First he delegates the right to say "no", but keeps the right to say "yes". Layers of "no-sayers" develop, & bureaucracy results. You have to pass the problem and its solution up to where there is authority to say both yes & no.

We'll end the review here. It is my fervent hope that you have gained as much from these insights as I have. Please do yourself a favor and buy the book!

How to Manage in Times of Crisis - Part 2

This is a continuation of the previous article with quotes from Ichak Adizes. He continues on with why change causes problems.

Everything, your company & even you as a person, is a system, and sub-systems comprise it. When there is change, sub-systems do not change at the same rate; therefore gaps are created. Gaps create problems, because there is misalignment. If you are age 47, but 17 years emotionally, 30 years spiritually & 70 years intellectually, these conflict. Similarly, with your company, perhaps sales changes direction very fast, but accounting is much slower, and H/R may hardly exist. Problems; disjointing/disintegration happens.

The faster the company grows, the less information top management has. With incomplete or inaccurate information, management may make flawed decisions. Meanwhile, H/R is hiring tomorrow the people needed yesterday; the company's sub-systems are operating at different speeds. Problems turn to crisis.

More innovations were made in the 20th century than cumulatively in the history of civilization.

If change causes disintegration, and disintegration causes problems, what is the solution? Integration. And the most effective way is to integrate proactively, not reactively.

THOSE WHO FREEZE, DO NOTHING, & ALLOW THE CRISIS TO TAKE OVER THE ORGANIZATION, CAUSE ITS DEMISE. Worse, they may disguise the problems with actions that make the organization look good only delay the inevitable crisis. Some organizations do nothing because they are waiting for the storm to pass. WRONG.

Success is not about how rarely you fall down, it's about how quickly you get up.

I am not smarter than anyone else; I just identify my mistakes faster and correct them faster.

In a badly managed company, people do not trust one another; it is easier to attack each other than the competition. What happens? The enemy has a better opportunity to kill us all. So, in times of crisis, more than anytime else, trust is critical.

If you're falling apart, how can you take care of others? Take care of yourself. Keep together by 1) Slow down, meditate or pray. 2) Keep your family together, give hope. 3) Call your friends; help them & ask for their help. 4) Address the fears your employees have; be honest. 5) Call your clients; help them. Remember, if your clients go bankrupt, so will you.

How to Manage in Times of Crisis

I continue with my theme for May, reviewing business articles and books. Small, but power packed, is the best description of this book from Ichak Adizes, world renowned philosopher, author, and teacher. He is the father of Shoham who's article on being proactive, not adaptive, was reviewed earlier.

This is a must, not only for your library, but for your desk. So much of it is incredibly profound, you'll want to refer to it often. Accordingly, this will be a compilation of quotes you can remember and continuously apply, ESPECIALLY NOW.

He starts with Albert Einstein; "A crisis can be a real blessing to any person, to any nation, for all crises bring progress. It is in crisis that inventiveness, discoveries, and grand strategies are born."

Adizes - Crisis is a rapid change. It's all about strength, or lack thereof; if you're robust, change makes you stronger. But if you're weak, change can kill you.

Change is nothing new; what is new is that the rate of change is happening faster. And when we solve problems, change creates more: so we will always have problems. Therefore, if you have problems, relax! You are in good company.

You are as big as the problems you can handle; problems are a sign of growing. In Chinese, the word for problem and the word for opportunity is the same!

Do you want me to be a problem or an opportunity? You decide. If you don't do what you need to do, I will be a problem. If you react appropriately, I will be an opportunity. Which do you want me to be?

A problem left untreated, becomes a crisis. Our worldwide financial crisis did not happen overnight. It began with problems left untreated over time.

The crisis involves your competition, too; everybody has the same problem. Who is going to survive? Those who are most capable of change. Crisis makes the weak die faster and the strong grow faster. So the key to making a crisis an opportunity is to be strong BEFORE the crisis develops.

If there is no change, the mediocre catch up. We need to be more agile, to change faster than the competition-or at least as fast as the market is changing.

There's much more to come, so we'll continue in the next article.

What Not to Cut in Tough Times

For those of you who follow my articles and business blogs regularly, you know that I have made my focus on issues surrounding how we lead and manage in these difficult economic times. In a recent publication, the Printing Industry of Wisconsin (PIW) outlined several "don'ts" to keep in mind as "you develop your business strategy for 2009 and beyond." Here they are with some discussion to shed further light:

1) Don't cut your advertising budget. Above all, your actual & potential customers need to know you're alive and well; you don't need them going elsewhere when every order is critical. This is also a way to gain on your competition who does.

2) Don't skimp on attending events. You may need to so some judicial prioritization here, but you still must be out there; you might be missed. You also want to keep abreast of new technology and ideas.

3) Don't be afraid to give something back. Share your ideas, give talks, teach a class. This establishes you as an authority and can attract new customers.

4) Don't be afraid to spend money on used equipment if you can get it at the right price. Also, if you need cash, perhaps there is something that can be sold; use PIW.org.

5) Sell your way out. Take advantage of competitors' cut backs and mistakes. This is the time to gain new customers from your competitors.

"This too will end." And you need to be healthy & in good shape when it does.

Do You Have the Fire in the Belly?

My wife graduated in Nursing from the University of Wisconsin, Oshkosh. The other day I picked up her alumni magazine, Engage, to read an article touted on the cover entitled "Fire in the Belly". Although it was pretty much written to promote successful graduates, as it should be, HOW the alumni had succeeded really impressed me.

One stated that it's the willingness to take a risk that often characterizes an entrepreneur; "You're a gambler, marathoner, chameleon, and sea captain." Wow, what a combination, and very well put!

Some focused on "finding out what their customers hated", and removing that irritant. Netflix was cited as an example in eliminating late fees for movie rentals.

Another was in the reusable packaging sector, and found themselves shipping a good deal of cheese. But cleaning the pallets & containers was a chore, and one that no one wanted to do. So they decided to provide that service & found that the cheese producers regarded it "music to their ears".

Others made it their goal to run an organization without politics because life is too short. Imagine that, no agendas, or doing things just to please the wrong person. Easier said than done, but I admire the approach, and the irreverence, to challenge the same old way of doing things.

The common denominator that defined these successful entrepreneurs was the "fire in the belly" - the ability to live and breathe your business. There was also a supreme level of confidence along with a tolerance for challenges & change.

I find this very uplifting now, given what we're going through. It's very inspirational to witness this in our younger people, who sometimes can put us older folks to shame.

Do you still have the "fire in your belly?"

Ten Minutes, Ten Months, Ten Years

Suzy Welch, wife of Jack, who is an accomplished business person in her own right as former editor of the Harvard Business Review, has come out with her first book called 10-10-10.

The premise of the title & book is that when making decisions, whether they be business, family, or pleasure, we should consider the upside/downside/consequences in a frame of the next 10 minutes, 10 months, and 10 years. Too often, depending on our age & personality style, we either live in the distant future, or perhaps like many teenagers, for instant gratification. Even considering only the mid-range, we could miss short run benefits, or long run successes. Her point is that we should consider all three.

This is a simplistic approach, but I've found that often times, the more obvious is often lost because we make it more complicated. Remember that it's not only in the knowing, but in the doing. This is also a balanced approach, and looking at more sides of an issue is rarely flawed.

As we lead our folks and run our companies in these challenging times, we've seen many get extremely short run oriented. Perhaps we've had to, just to survive. But living only for today will not serve us well; we risk emerging less than we could have been considering the longer range.

Another advantage of screening our decisions this way, is that we tend to moderate our thoughts by considering the different time frames. In looking forward to how we might emerge, and how different conditions will be in 10 months, and especially 10 years, we gain more of a positive light. This balancing effect improves our outlook and allows for perhaps a more complete decision.

Talk with your managers about 10-10-10; ask them to broaden each other, and you, considering a wider time frame in all of your decision making.

Is Adapting Too Little Too Late?

For quite some time I have admired Ichak Adizes, his articles, philosophy regarding sound business practices, and intelligent ways to look at how we approach things. Now his son, Shoham, is writing and has produced a fine piece on how we should face our current challenging and fast paced environment. He has called it, "Don't Adapt - Pro-act".

He points out that adapting is simply not enough. Because the dinosaurs adapted too slowly, they perished. Biologists have noted that as the rate of change increases, more and more species go extinct, despite their ability to adapt. Isn't business similar? Customers are demanding change faster because the markets demand it. What results is that we try to meet needs that have come and gone; we are simply too late. We have to only look at the automobile industry; wow.

So what are we to do? Well, we need to predict the future, to forecast more effectively, before it is being felt. We cannot do this with our heads firmly in the sand or paralyzed with fear. We must risk or we will eventually perish; it's that simple. We can waste away slowly, or we can move now: be proactive not reactive.

Executive leadership must guide their people to the same page, to see the same threat, so all can meet the challenge together and head-on.

Our global market complicates this; we not only have our domestic state of affairs, but things can be very different in other cultures, in other countries. We need to understand each other and band together to understand and conquer our challenges.

To be proactive is to have the sourage to stay ahead, instead of reacting to the past. Don't be giving too little too late.