Help Wanted -New Business Leadership
Styles and Practices Needed To Build Confidence
and Jump-Start the Economy.
By: Denis Orme
America’s help wanted ad should read, “New business leadership needed to build confidence and jump-start the economy. Only those willing to replace stale management styles need apply.”
Business leaders are faced with an unpredictable and frightening economic scenario – one they’ve never experienced before. First came the dot.com crash of 2000, followed by the recent terrorist attacks, frightening investors and crippling the financial nerve center of our country.
Even before recent events American business had been in a twelve-month economic decline.
Each year for the last five years over 45,000 corporate bankruptcies have impacted on the lives of over a million people annually.
Add to that the permanent loss of over 1,000,000 manufacturing jobs since 1999 and USA businesses face serious restructuring in this new one-world market.
Right sizing and scaling down are now normal business tactics. Over 800,000 Pink slips have replaced signing bonuses of just a year or so ago and many businesses are “encouraging” employees to use up vacation days or work 4-day workweeks.
No one ever downsized to greatness.
Politicians have their hands full defending our rights. They need the help of strong, innovative senior executive teams and CEO’s to rebuild America’s confidence and jump-start the economy now.
To do that a new breed of business leader is needed. Old management techniques need to be replaced with new leadership skills and business acumen.
Traditional Business Planning Doesn’t Work
Too often executives tinker with, add to, or subtract from last year’s plan. If you want more of the same, just do more of the same. If you had a poor or mediocre result then all you will get is a similar mediocre result. Looking forward, even if you had a good result, incremental planning will now produce a poor result because the economy has stalled, and recovery is not predicted until mid-2002.
In my direct experience and in observing the planning process in hundreds of companies, an incremental approach to planning occurs just all too often and the approach provides self-limiting outcomes.
The approach is self-limiting in that assumptions (too often based on perception and not fact) are made and self-imposed constraints follow.
Additionally, organizations go through life-cycles, just like the life-cycles people experience.
However, often senior management is not aware of the company’s life-cycle stage. If the stage is recognized, management may be unable to get the organization back to the flexibility of a much younger, healthier, growing organization.
Just as a family owned business must successfully transition from the founder to other family members, so too must organizations transition successfully through changes in leadership, economic shifts, or culture in order to get the organization on to a new growth cycle. This requires a vibrant leadership vision, new goal-driven strategies, and implementation of that vision by building and retaining high-performance teams.
However, it is difficult to change an organization. The culture you have today evolved over an extended period and changing it will require a sustained commitment. If you relax, the culture will slip right back to the starting point.
Any transition typically causes conflict that must be managed. Often the organization may not be able to transition effectively without intervention from an outside influence or from the occurrence of a triggering event.
The risk is that without change, you will lose your more dynamic people, lose market share and, unfortunately, in some cases, the organization may die. I have presided over the dissolution of several entities that were unable to make the transition.
Much of the thinking we do is incremental in nature. For example, in business you spend a lot of time reviewing where you are relative to where you have come from, and also spend a considerable amount of energy benchmarking yourselves against your competitors.
While an incremental approach is human nature, it is also self-limiting because as assumptions are made, self-imposed constraints follow.
The Greenfields Planning process ensures you start with a clean slate. A key element in this approach is to avoid incremental, self-limiting thinking.
The Greenfields Approach is straightforward:
· If you were starting this Business or Business Unit today, would you do business the same way?
· If you would not do things the same way, then why are you doing it that way now?
If you are looking for a quantum difference in your business then the planning process should not commence with incremental, self-limiting thinking. Determination of actual constraints or finding ways to work around perceived constraints are the final stage in the planning process #6 – Implementation Action Items.
The Greenfields planning process has six key elements to be explored in the context of your business, and it is now time to start rethinking your business and developing plans which need to deliver sustained high-performance results. The planning process is rigorous, urgent, and driven by Results-Based Leaders.
Remember, it is planning without constraint.
1.SITUATION ANALYSIS – Ensure broad participation in the completion of a detailed Situation Analysis to identify all areas in your organization requiring major review and change.
Note that an organization in decline will typically have low-growth or no-growth expectations.
Many of those in the organization will be less likely to want to even attempt to change or recapture market share and will reward those who ‘follow and don’t rock the boat.’ Generally, these organizations are more interested in retaining internal relationships than taking personal risks usually associated with change.
Accordingly, in those cases it will be important to form a more objective Venture Team to carry out the Situational Analysis.
How do you complete a Situational Analysis?
Determine those five or six Critical Success Factors – critical to the success of your organization or functions within your organization, including typical Strategic Plan elements: Market Research and the Opportunity for market share gains; Marketing & Sales; Production & Distribution; R & D; Finance – [new month-by month Cashflow and Profit Forecasting required]; Human Resources; Organizational design & General Management.
In order to determine if they are critical, ask the question, “If this function or task is not done well will there be a major negative impact on our business result or the functions supporting our business?” If the answer is ‘Yes,’ then this should be considered a Critical Success Factor.
Always complete a month-by-month twelve to eighteen month forward projection of both cashflow and profits. Without it you will not know how much time you have to effect change.
Additionally these tools provide an effective way to monitor your progress as you implement plans.
2.LEADERSHIP EVALUATION – Because many of the problems currently facing the organization are rooted in poor or ineffective leadership I have found it beneficial for those in key positions to complete a Leadership Self-evaluation questionnaire and be part of a 360-degree feedback evaluation process.
In my experience, and in order to get an organization on to a new growth cycle changes in leadership or leadership performance may be required. These changes are also included in implementation Action Plans.
3.ACTION PLANS – In each area of focus, outline detailed Action Plans to resolve shortcomings. Responsibility for accomplishing the task; timeline for attainment; players needed to produce the result; and the anticipated result are always contained in Greenfields Action Plans.
If Action Items require a team approach to their implementation, then the composition of the team must be identified and put in place, but remember, responsibility for achieving the result can only be delegated to one person.
4.MUTUAL TRUST – Building trust and respect around the need for change is an imperative because without it, the desired changes simply will not occur. Undertake widespread education on the need for change, and depending on the amount of time you have (i.e., how fast your business or cashflow is slipping), this education should continue over several months.
This will not be the case for those organizations in crisis, and after two or three briefings on the situation or crisis (within a few days) there should be Implementation Updates on a regular basis.
In the latter case trust will occur through a combination of initial briefings and the Implementation Updates.
A willingness to trust may have been initially withheld, but once those working with you see the urgency of actions, the results and your willingness to share information, then they will start to develop trust and respect.
5.CONFLICT RESOLUTION – Wherever there is change, poor communication, uncertainty, or poor results, there will be conflict.
Poor results require successful organizations to get beyond the ‘blame game’ and where there is significant change, the organization must, through this Greenfields Approach, provide support in conflict resolution.
Conflict is healthy when it is channeled towards producing the desired result towards a common goal. That result must be beneficial to the organization and those associated with it, rather than being rooted in the self-interest of just one person.
Another frequent cause of conflict relates to personality or leadership style differences.
Regardless of personality differences or leadership styles it is not just a question of resolving the conflict, but how it is resolved that becomes important.
Wherever possible during conflict resolution mutual respect should be retained, or if this is not possible, work team reassignment may provide the only alternative to retaining an effective implementation program.
6.IMPLEMENTATION COMMITMENT – You have now completed the Greenfields Planning Process without constraint, but as you know all organizations operate with some form of constraint, whether it be cashflow, not having the right personnel, or even time-to-market product issues.
Implementation plans are now evaluated in the context of “Given our specific constraints”
What is realistic?
What is possible and practical?
Action Items are adopted and prioritized according to answers to these questions.
In my experience, over 90% of all plan failures relate to a lack of sustained commitment to implementation, with only 10% of the failures arising from poor strategies contained in the plan.
The Greenfields approach will deliver Action Plans to facilitate the rapid turnaround of your organization and provides you with an effective interim plan. Short-term successes give validity to your overall plan and provide the time required for more sustained implementation through a cultural shift.
Implementation Plans must be managed and require not just the weight of key leaders behind them, but their active commitment and participation.
Without continued open communication and the sustained commitment of your senior management group then the desired results simply will not occur.
After several months of effective implementation, you will be in a position to add the dimension of more long-term thinking to your planning process.
If you want to do something better, then under the Greenfields approach you had better do something different.
If you want to do something different then you had better change your behavior.
i.Created a sense of Urgency?
ii.Created and over communicated your organization’s future vision?
iii.Built a guiding coalition around that Vision?
iv.Provided the opportunity for short-term wins?
v.Provided a process to anchor changes in a new corporate culture?
By adopting and implementing the Greenfields Planning method, and by changing your leadership style and performance, you have now set the course for a profitable sustainable long-term business result.
Remember, while you are implementing change the economy will shift further, the market will move, but most of all your people will need strong centrally directed leadership (not autocratic management) to keep the focus and achieve the result.
Based upon today’s economy and the prognosis until mid-2002 isn’t it time for you to act?