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!

Turtle or Hare- Part Deaux

Last week I talked a little about organizations in this spiraling economy determining whether they wanted to be a "turtle"; retreating into their shell, or a hare seeking opportunity. I wanted to continue that theme a little bit.
The official "prognosticators" have grimly stated that our current economic situation is 1) likely to get worse before it gets better and 2) likely to last at least twelve moths. So what do we do with the time? Here are some of my suggestions:

• Plot your strategy. How many "overnight" successes have you met that spent years refining and executing their strategy whether personally or professionally. In my last position we took some time to reflect and refine our strategies and then launched a multi point strategy with excellent results. (see my case study- a New Paradigm for Credit Unions). Several competitors commented to me later- we thought you guys had given up- you were massing for D -day!
• Examine your team. Anybody else tired of hearing everybody parrot Jim Collins about getting the right people on the bus? You can't just talk about it, you have to do it! If organizations are cutting budgets or slashing product launches and cutting marketing expenses before looking at the performance metrics of your organization and assisting the bottom 10 -15% off the bus you aren't doing what you need to do!
• Look for "blue ocean". Are you proactively looking for new opportunities and new markets? Are their opportunities to bring your product or service into a new sector?
• Examine your systems. I agree with Collins; the enemy of great isn't bad or awful, it is "good" as in "good" enough. Do you have efficient systems in not only data management, but in business intelligence? Is the data being turned into meaningful action plans and being disseminated to the right people?
• Do you have clarity? Marcus Buckingham tells us the most important role of leadership is clarity. Clarity of purpose and vision. Richard Rumelt of UCLA tells us that the key role of management is to remove or minimize ambiguity. Employees need to understand their role in the organizations plan, especially at times like these.
• Do you have an engagement strategy? If you don't you are not alone, but here are some arguments why you should start now. In my article on "presenteeism" I shared with you that we lose $200 billion annually to productivity drain from people who are not fully engaged, are dealing with personal concerns, or just taking up space. In my series on Compliance to Commitment(TM) and engagement I shared the corollary- organizations with high engagement enjoy 21% higher per capita productivity rates, 60% lower turnover, and outperform their peer group averages by 100% on key financial metrics. Their employees see themselves as part of the solution and actively participate in creating solutions, not whining or abandoning ship.
• Are you playing as a team? When business get in trouble or experience tough times I typically see the executive team "huddle" in a conference room making all the decisions: what do we cut, who do we cut, what do we do? Here is a tip- employees at all levels support decisions that they participate in much more consistently than decisions that are imposed on them. I am not suggesting a vote, but giving employees an opportunity to participate in the how if not the what or at least informing them and getting their input conveys respect and value. If your management team and staff can't contribute to these kinds of decisions you might ask yourself why they are part of your team.

I remember hearing that Native Americans ate when food was plentiful and rested when the opportunity presented itself. I also read in Malcolm Gladwell's latest book the difference between a "rice" culture and a "wheat" culture. A rice culture is not seasonal, when you are not planting and harvesting you are preparing for the next growing season. In our "wheat culture" we spent the winter months inside - sounds a lot like "turtling" to me.

So I hope that I have given you somethings to consider. Comments always welcome.