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Wednesday, October 07, 2009

How to Lead in Times of Crisis

The World Business Forum starting in New York City this week brings together political and business leaders for two days to discuss the ongoing crisis, leadership, talent management, leading change in jobless times and many more issues related to how we conduct business and lead teams today.

For a CEO, this event promises to show key indicators of where and what might lead us out of the current crisis. From changing the way you mentor teams, spearhead campaigns and make your brand successful, the next decade will require evolved leadership skills if you and your company want to succeed. The introductory speaker Bill George, ex-CEO of Medtronix and a professor of management practice at Harvard Business School will focus on discussing the focal point of the event: How to lead in times of crisis.

He will speak from experience. He has not only led Medtronix for a number of years but also serves on boards of many multinational companies and has authored several books including his latest publication 7 Lessons for Leading in Crisis.

Recently he said: “It’s quite easy to be a measured, good-natured, principled and strategic leader in smooth sailing, but reputations are made in the depth of crisis. I want to ensure that the next generation of leaders, like those students of mine at HBS, clearly understand that concept and grasp the inherent vulnerability they face as leaders in crisis.”

His primary concern though is a familiar one and one that hits at the top of every company: That the economic collapse was not caused by oft-repeated reasons like subprime mortgages and credit default swaps but by failed leadership.

Below are a few tips he hopes will help you as company (and team) leader to make the right decisions and keep everyone afloat:

  • Don’t point fingers when you are to blame.
  • Don’t try to go it alone – you will fail.
  • Don’t go for the quick fix.
  • Don’t forget the media – they hang on every word.
  • Don’t shy away from opportunity – come out swinging.
  • Don’t be afraid to change your leadership style.
  • Don’t ever, ever waste a good crisis - it is your opportunity to change your company for the better.
  • Do get behind the podium and inspire your company back to profitability.
  • Do get down in the weeds with your managers and work the problem.
  • Do focus on long-term viability rather than short-term profits.
  • Do be forthright in acknowledging fault.
  • Do encourage a culture of candidness. Do call on trusted mentors when you need a fresh perspective.
  • Do keep a close eye on the balance sheet (in crisis, cash is king).
  • Simply, lead with every intention of having an aggressively positive impact on your company, employees, and customers. Crisis or not.


The Importance of Candor in Business

One of the most straightforward pieces written recently on candor comes from Jack Welch’s book, Winning: The Ultimate Business How-To Book. In it, he refers to candor as, “the biggest dirty little secret in business,” but more specifically as people not expressing themselves in a straightforward way and withholding their comments and criticism; usually in an effort to avoid conflict.

Welch summarises the positive effects of candor on an organisation as:

1.Create better outcomes: get more people in the conversation which leads to more minds and more ideas.

2.Speed things up using the process: surface, debate, improve, decide.

3.Cut costs: replace boring meetings, pointless updates, and presentations with real conversations about the core issues.

Why aren’t we candid: we’re taught not to be at a young age. Sensitive or awkward issues are softened or avoided. Our parents scolded us for pointing out something that we thought was obvious but “wasn’t a nice thing to point out.” But the main reason we’re not candid is simple, it’s easier not to be.

So how do we reverse the trend and our learned childhood behaviours to create candor in our companies? Reward the behaviours you’d like to see more of and lead by example, no matter where you are in the hierarchy (although it is easier the higher up you are).

What steps do you take within your organisation to promote and reward candor?

The Best Leadership Advice I Ever Got

Marshall Goldsmith is a world authority in helping successful leaders achieve positive, lasting change in behaviour. As a coach, he is often asked to give others advice. In this interview, he is asked what is the best coaching advice that he has ever received?

'Like many young Ph.D. students, I was deeply impressed with my own intelligence, wisdom and profound insights into the human condition. I consistently amazed myself with my ability to judge others and see what they were doing wrong.

UCLA Professor Fred Case was my advisor and head of the Los Angeles City Planning Commission - where I was doing my dissertation research. At this point in my career, he was clearly the most important person in my professional life. He was also a man that I sincerely respected. He had done an amazing amount to help the city become a better place. He was also doing a lot to help me.

Although he was normally in a very upbeat mood, one day Dr. Case seemed annoyed. He looked at me and growled, "Marshall, what is the problem with you? I am getting feedback from some people at City Hall that you are coming across as negative, angry and judgmental. What's going on?"

"You can't believe how inefficient the city government is!" I ranted. I immediately proceeded to give several examples of how taxpayer's money was not being used in the way that I thought it should be. I was convinced that the city could be a much better place if the leaders just listened to me.

"What a stunning breakthrough!" Dr. Case sarcastically remarked, "You, Marshall Goldsmith, have discovered that our city government is inefficient! I hate to tell you this Marshall, but my barber who is cutting hair down on the corner figured this out several years ago. What else is bothering you?"

Undeterred by this temporary setback, I angrily proceeded to point out several minor examples of behavior that could be classified as favoritism toward rich political benefactors.

Dr. Case was now laughing. "Stunning breakthrough number two!" he chuckled. "Your profound investigative skills have led to the discovery that politicians may give a more attention to their major campaign contributors than to people who support their opponents. I am sorry to report that my barber has also known this for years. I am afraid that we can't give you a Ph.D. for this level of insight."

As he looked at me, his face showed the wisdom that can only come from years of experience. He said, "I know that you think that I may be old and 'behind the times', but I have been working down there at City Hall for years. Did it ever dawn on you that even though I may be slow, perhaps even I have figured some of this stuff out?

Then he delivered the advice I will never forget. "Marshall," he explained, "you are becoming a 'pain in the butt'. You are not helping the people who are supposed to be your clients. You are not helping me and you are not helping yourself. I am going to give you two options:

"Option A - Continue to be angry, negative and judgmental. If you chose this option, you will be fired, you probably will never graduate and you may have wasted the last four years of your life.

"Option B - Start having some fun. Keep trying to make a constructive difference, but do it in a way that is positive for you and the people around you.

"My advice is this: You are young. Life is short. Start having fun.

"What option are you going to choose, son?"

I finally laughed and replied, "Dr. Case, I think it is time for me to start having some fun!"

He smiled knowingly and said, "You are a wise young man."

Most of my life is spent working with leaders in huge organizations. It doesn't take a genius to figure out that things are not always as efficient as they could be - almost every employee has made this breakthrough discovery. It also doesn't take a genius to learn that occasionally people are more interested in their own advancement than the welfare of the company. Many employees have already figured out this one as well.

Real leaders are not people who can point out what is wrong. Almost anyone can do that. Real leaders are people who can make things better.

Dr. Case taught me a great lesson. His coaching didn't just help me get a Ph.D. and become a better consultant. He helped me have a better life. '

Think about your own behaviour at work. Are you communicating a sense of joy and enthusiasm to the people around you - or are you spending too much time in the role of angry, judgmental critic?

Do you have any co-workers who are acting like Goldsmith did? Are you just getting annoyed or are you trying to help them - in same way that Dr. Case helped him? If you haven't been trying to help them, why not give it a try. Perhaps they will write a story about you someday!

For more, see - http://blogs.harvardbusiness.org/goldsmith/2008/09/the_best_leadership_advice_i_e.html?loomia_ow=t0:s0:a38:g26:r12:c0.016508:b27998024:z6

The Art of Good Leadership

“Good leaders make people feel that they are the very heart of things, not at the periphery. Everyone feels that he or she makes a difference to the success of the organization. When that happens people feel centered and that gives their work meaning.” Warren Bennis and Burt Nanus

Leadership Lessons for Difficult Times

McKinsey recently conducted a series of interviews with 14 CEOs and chairmen of major global companies which sheds light on the foundations of corporate leadership in diffcult times. Here are the principles which guide these leaders' behaviour:

Confront reality
'Always question whether the “halo effect” of a business or business situation is blinding you to what lies on the horizon.' - Herbert Henkel, chairman and CEO of Ingersoll Rand

At board meetings, put strategy centre stage
'The board has been heavily involved in strategy formulation with me, and we have a better strategy because of it.' - Bill Nuti, chairman and CEO of NCR

Be transparent with employees . . .
'The only way to address uncertainty is to communicate and communicate. And when you think you’ve just about got to everybody, then communicate some more.' - Terry Lundgren, chairman, president, and CEO of Macy’s 

. . . and investors
'Our policy is: “If in doubt, communicate.” We always want to conduct our business with integrity and forthrightness.' - Ron Sugar, chairman and CEO of Northrop Grumman

Build and protect the culture
'Stay focused on culture, people, and values: it’s the area most likely to get compromised in this environment.' - Eric Foss, chairman and CEO of Pepsi Bottling Group

Keep faith with the future
'If you don’t invest in the future and don’t plan for the future, there won’t be one.' - George Buckley, chairman, president, and CEO of 3M.

None of the CEOs interviewed claimed to have attempted anything revolutionary. What was evident, however, was their resolve in pursuing the principles they thought were right, often in the face of opposition. Leadership becomes increasingly important in tough times, when so much is at risk—but it can be even harder to exercise. The six leadership “musts” described above have made the greatest difference for CEOs on the front line.
For more, see - http://www.mckinseyquarterly.com/Governance/Leadership/Leadership_lessons_for_hard_times_2413