The Leader's Journey: Phase 3
November 2008
The Leader's Journey
Phase 3: Organizational Alignment and Effectiveness
Our current economic meltdown makes this a timely conversation. If you have not yet developed the strong heart of a leader or surrounded yourself with the perfect core team (Phases 1 & 2), you'd be wise to review our articles from September and October. Given current reality, you'll need to focus on all three of these aspects of the journey to lead your company through these challenging times.
The third phase of the journey involves turning your passionate contribution to the world into a sustainable money making machine. When the economy gets soft some leaders resort to fear based decision making and begin cutting costs immediately to weather the storm. This is not the high road and this type of leadership actually accelerates the economy's decline, while making your business less likely to survive or even thrive during the next few years. So, if you don't immediately cut costs in defense of your P&L, what do you do?
Real leaders know that operational excellence is about adding value and doing it in a cost effective manner within a system of accountability. Most people agree that the problems on Wall Street emanated from a three part leadership breakdown:
· Operating without ethical values
· Choosing to make vast sums of money without adding real value that improved our quality of life
· Doing business as outlined in the first two bullets without accountability.
So if you want to ensure you are doing what is needed to grow a sustainable business, you begin by reflecting on three big questions before you look at cost cutting:
1. Is our executive team using solid ethical principles as they make our business decisions day in and day out? Am I sure we are not compromising our integrity or values to succeed?
2. Is our value proposition relevant to people's real needs and sufficient to sustain our company's success through good times and bad times? Am I able to articulate why our products and services are important to our market "now more than ever?"
3. Do we have sufficient accountability to ensure we know what's expected, how people are performing, and can course correct in a timely manner? Am I certain that our system will ensure each unit is providing value to their customers so that the whole operation and customer experience is optimized?
If you uncover any issues by thoughtfully addressing these questions, you need to ensure that your executive team comes together to address these concerns head on. This is where your work begins. You must begin by strengthening the foundation of your values, your value proposition, and your value delivery system. If you neglect this work, you may later discover that your cost cutting reaction to the soft economy was self-destructive and expensive.
And once you have ensured your foundation is strong, we suggest you answer a few other questions before you cut costs:
1. Does this economy offer any new opportunities that will require changing our business model? What talent will help us make the most of the opportunities in the new reality?
2. Is our marketing and/or business development approach well designed and set up for success in this new reality? Can we make any simple changes or wise investments to attract new business?
3. Are there any people or areas within our business that weren't performing well during more robust times? What have we been neglecting that needs to be attended to now?
Once you have done this next round of work, you will likely have found savings or opportunities that will help your company endure the challenging economic times without having compromised any value adding efforts or people. If you determine that additional cost cutting is necessary, you will be wise to take the long view and determine what you can do to best maintain the core competencies that will protect your most important asset: customer loyalty. The last thing you want to do is make it tougher for your customers to do business with you. This will require taking good care of your people who serve your customers. If you burn these people out you are one step away from burning the bridge to customer loyalty.
This phase of the leader's learning curve is not easy, but it can be very exciting. If necessity is the mother of invention, challenging times can become a great wake up call and inspire the radical creativity that is otherwise dormant. All of these questions were relevant during the fat times before this meltdown, but we were too busy to attend to them. So if you roll up your sleeves with an open heart and your great core team, you can make the best of this economy and become a stronger company in the long run. As we all know, the word crisis involves both danger and opportunity. Every economic condition offers opportunities for those who can solve people's problems and make the world a better place in the process of doing so. Let us know if we can be of help!
If you know someone who would benefit from reading this article, please pass it on.
Holiday Gift Idea: If there's someone special you want to share an inspirational book with, consider Building Unity by Paul Werder. One reader recently said, "It's really a fantastic book. I experience a real transmission of peace and love just reading it. The book is smart, it's dead-on perceptive, but there is an additional experience of it that helps the teachings and insights go deep." Last season one person gave 125 books away as gifts and received a surprising number of thank you notes.