Friday, February 20, 2009

Negotiating the Rapids

Well it has been another interesting week. The market is lower, some folks are already declaring the stimulus package a failure (I think it's a little premature) and businesses and people are very nervous.
The next few months are what I am referring to as the rapids. We are going to be facing challenges that we haven't faced before and how we navigate has long term implications. Here are some of my thoughts:
  • Act, don't react. Many organizations are going to look at rapidly softening markets and look for actions to take. Action is good as long as there is thought around it. Organizations will be in a position of looking at their staffing requirements, marketing expenditures, training, etc . In our service economy "payroll" is one of our largest expenses. It is necessary and appropriate to adjust our workforce from time to time. Do it carefully and methodically. Things like across the board cuts, hiring freezes, etc. are all tactics. Be sure they are the right ones. If you don't have a strong performance management and measurement methodology now might be a real good time to implement one.
  • Clarity is king. I have quoted Marcus Buckingham multiple times on the most important role of leadership as being clear. At times like these the need for clear confident leadership becomes even more critical. Your employees are going to want to know that you see a future, that there is a plan.
  • Involve your team. This is a time when a management team can really gel or come apart. I believe that when we are making critical decisions we need to involve all levels of management. You don't have to involve them in the same way, but retreating to a place where you make all the decisions or in larger organizations all the decisions are made at the C level does a couple of things, neither of them positive. Number one, it says we don't think you are smart or competent enough to participate. Number two, it puts them in a position where they can not explain or share accountability for the decisions that are made.
  • Make adjustments to your budgets and your staff surgically. I talked with a client this morning who is struggling because they reduced the majority of their "production" staff earlier. Now they have brought in some significant orders and are struggling to meet their commitments because they don't have the staff. You may have a situation where you literally need to add staff in one area while reducing in another.
  • Think before you slash training or marketing budgets. One of the first casualties I see in many downturns is training followed by marketing. My concern in this area is that as I have written previously less 30% of the organizations in the world have what could be labeled high engagement workforces. The most important part of high engagement is trust and communications. We don't do a good job of teaching that in our colleges and B schools. We need managers who are highly capable in that area. You also send a message to your high performers that you are reducing investment in their skills development and potential. Similarly with marketing if you are not looking for "blue ocean" or refining products where is your future business going to come from? I have seen organizations so consumed with a downturn or a singular initiative that they "take their eye of the ball" in other areas. The world doesn't stop, your competitors are monitoring your vulnerabilities.
  • Play your game. I wrote a piece last week where I talked about best practices among other sacred cows. They may be best practices- for somebody else! Don't blindly follow "what we have always done" or "the industry best practices". This way sound overly simplistic, but after the second guy implements it, it isn't the best practice any more; it is the standard practice.

I am an optimist by nature an explorer if you will. I believe that this downturn may be the catalyst to make us re-examine many things that we have done and change them.

I have written a lot about personal competency. Personal competency is the idea that employee and employer are partners in achieving organizational and individual goals. This downturn is making us realize that our current model of corporate codependency where we "take care of employees" can't continue. Corporate America can't fund it and neither can the government. People are going to have to get involved with decisions about their health care, their retirement, and their future. Trickle down economics didn't trickle down.

I find it somewhat interesting how outraged some politicians are about the stimulus program, but they didn't say much about our "investments" in the wars in Iraq and Afghanistan

So, wear your life jacket, plot your course and you will survive this trip!

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1 Comments:

Blogger teknonmedia said...

Nice work, Mark.
I agree with your logical response to an emotional market. Your thoughts are appropriately encouraging.

Greg Hughes

February 20, 2009 3:08 PM  

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