Executives on the Economy
Obviously this downturn in the economy is taking a toll on most of us in some form or another. While it may not be impacting your business or lifestyle directly, a ripple effect will probably hit you, if it hasn't already. How are you dealing with these challenges? I recently read an Op-Ed in the New York Times by Warren Buffet, talking about how he is navigating these rough waters. He has an interesting perspective, but as the richest man in the world, he may not have the same worries as you and I. (See link below in "Of Excellence" for the Op-Ed). After reading the Op-Ed, I was inspired to seek out how other executives are managing their organizations and their lives, so I emailed a dozen of my "C" level clients and friends (CEO's, COO's, CFO's, etc) to see what they were doing. Across the board, these prudent executives are not just standing by watching and waiting. When I analyzed their courses of action, four major themes emerged:
- Focus on the Core
- Look For Opportunities
- Communicate
- Take Care of Yourself
1. Focus on the Core
Keep your eye on the ball. When things get scary, some people let fear drive them. The CEO & Chairman of a public telecommunications company summed it up best by saying, "In turbulent economic times, it is even more important to remain focused on your core mission and not let the economy become an 'exit ramp' for not delivering top-notch service to your customers or for not meeting your expectations."
Adjust as needed. One leader who was a victim of the dot-com bust is now having the team put themselves in their customer's shoes and try to assimilate what their customers are experiencing. The results are showing which products and revenue streams are most likely to be affected by the economy, so that the team can anticipate what is coming, make the necessary adjustments to their strategy, and forge ahead more assured of success.
2. Look for Opportunities
Carpe Diem. Anyone can be affected by change and make agile moves to accommodate their circumstances. Goldman Sachs changed its charter in the banking industry. They looked at their core and adapted to the turbulence in the marketplace. Or take Tulane University, which had been trying unsuccessfully for years to change its infrastructure to meet evolving needs. Hurricane Katrina opened up an opportunity for the administration to reposition the institution and redefine an academic culture that was steeped in century-old bureaucracy.
Cross-training. Leaner organizations require employees to be versatile in more functions and to have a broader understanding of the business. Some companies are training their operations and administrative staff to generate leads for the sales department. On the flip side, they are also educating the sales force on how to cut costs in operations. One company is providing business economics training to all employees so they grasp the market's impact on the organization and they know what it is like to "walk in the executives' shoes."
Be Creative. Several leaders are focusing on being extremely creative and using their internal and external constituents as resources. Not only does this allow them to tap the collective intelligence, but it pushes the constituents to partner in problem solving and be supportive of the organization through challenging times. A Washington DC real estate executive is prioritizing innovation and creative solutions in order to be a better advocate for his clients, given the fluctuation in the economy and the upcoming change in political administrations.
Keep it light. Some companies are finding cost-effective ways to have fun with social gatherings, surprise activities, perks, etc. Having fun does not have to be at the expense of the bottom line- again creativity is key.
Tighten the belt. Sometimes, cutting certain extraneous costs is difficult to do when the picture is rosy. Downturns give leaders a chance to really think through the necessity of every line item, particularly staffing. One executive reported that his second most profitable year in 12 years came after lay-offs he made when business was 22% down. He noted that cuts were done once, and done early, to salvage the corporate culture. Once the survivors knew they were there to stay, they understood the mission and what they had to do, so they felt safe. If they contributed, the company would take care of them. In the last economic downturn, the CEO of a technology company had to release solid employees, but was able to hire some back as contractors without having to carry full salary and benefits. He was then able to hire several back when the economy turned around 9-12 months later.
3. Communicate
More is better. Too often leaders are afraid to confess that things will be difficult. People need to know what, if anything, has changed strategically; otherwise they will assume there is no sense of direction. One executive specified that he is sharing more information on critical items like financial strength and visibility into sales and new business prospects. Many executives articulated having more frequent meetings now than before the economic downturn. For example, a CEO of a large international company attends department meetings each month because he is working hard to be "transparent" and in touch with employees.
Get all to play. Several executives feel strongly that if everyone feels they are a contributing team member, they will take ownership of all problems, and not just leave it to leadership. One company maintains this philosophy in good times and bad. So when they choose to cut resources, adjust pay, or anything radical along these lines, all people will have been a part of the decision and therefore will more likely buy into and champion the change.
4. Take Care of Yourself
These C level executives realize that they need to model the behavior they expect from their employees. Although it is not always easy, they try to keep balance, stay upbeat, and lead with passion and integrity.
Be Positive. Jeffrey Immelt, Chairman of GE, spoke at a conference of Harvard Business School alumni. He describes getting beat up daily by the media, stock market, customers, banks, suppliers, unions, etc. He feels lousy every night, but in the morning, when he looks in the mirror, he always says "Hello Handsome!"
Be Honest. One executive admits that he must face the brutal facts, separate himself from his emotions, and recognize that the company is indeed a living, breathing organization itself, and thus make cutbacks if necessary, regardless of how difficult it may be.
Have balance. If you don't have your health, what good is any of this anyways? Having balance personally and professionally, mentally and physically, is critical to getting through the rough patches. Many executives admit that their work out is the first routine to suffer when stress peaks; yet they realize the drain it puts on them not to exercise. Several leaders engage in meditation, yoga, Pilates, and other calming activities to manage stress. A few compete in sports events (triathlons, marathons, basketball leagues) as a way to relieve tension. Most count on the support of their family and friends to keep personal balance and continue to travel even if they have to scale back on the type of vacations they are taking.
For more support on how to take care of yourself and your organization during these difficult times, consider working with a coach. For more information, contact kim@mycoachinmotion.com
The Active Pursuit. . .
What can you do to be proactive rather than reactive right now?
What can you do for your organization to keep channels of communication open and manage fears and concerns?
What are you doing for yourself, physically, to preserve your health and manage your stress?
What are you doing to stay grounded and connected to your support systems (family and friends)?
How can you tap the collective intelligence around you?
How can you help others with their challenges?
. . .of Excellence
"Buy American. I am." By Warren Buffet
A great perspective on Buffet's view of the economic cycle and how he is choosing to invest his money based on market trends.
 Focus by Al Ries. This classic book is timely for those looking to streamline their businesses now. It concentrates on what you are best at and helps uncover the top ways to navigate through difficult economic times to capitalize on your strengths.
Ideas in Motion
"Optimism is a force multiplier" Colin Powell
"If you wait for the robins, spring will be over." Warren Buffett
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