ENGAGING HUMAN PERFORMANCE TO DRAMATICALLY IMPROVE STRATEGIC BUSINESS RESULTS
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September 2008

LEVERAGING CRAZY TIMES

Certainly no one who has been conscious over the last several weeks can have escaped the perception that we are facing historic times, rife with turbulence, volatility and challenge. So, what’s a leader to do? Three things above all: first interrogate reality and make up your own mind, two choose the most empowering response you can in as many personal and professional contexts as possible, and three act in ways that make such responses come vibrantly and viscerally to life.

So here are a smattering of observations about some key things underway and some leadership reflections and lessons that flow from them.

ECONOMIC MELTDOWN

It can be argued that when Nixon took the dollar off the gold standard, we created a currency system based on ‘confidence’. And when confidence goes, it can take the system with it.

If you then create a deficit society as the US has become, and yet one with frenzied levels of consumer spending (which is enabled by foreign lenders because the US is a huge export market for them and holder of the global reserve currency, the dollar), and then you don’t regulate financial markets and banks, you eventually hit an economic cul-de-sac where quasi-socialistic interventions or ‘meltdown’ seem to be the only alternatives.

Leaders at all levels need to hold political leaders accountable for not now lurching from one crisis to another. It is not acceptable for us Americans not to save, to overspend, and count on a perpetually rising market to create solvency out of insolvency. The US still has a vibrant, abundantly productive economy, which has to be allowed to deliver. But it also needs to be counterbalanced with sane credit issuance and a more sober perspective rather than an ‘instant gratification fix’ mindset.

Thomas Friedman argued that the boom, bubble and bust of the 19th century at least left in its wake a national railway system, and the boom, bubble and bust of the late 20th century left an information superhighway in the Internet. Unless any profits created from the eventual sale of under priced mortgages and distressed properties are invested back in green technologies (for instance), all we’ll have left from the current meltdown are dubious derivatives and lots of condos no one wants.

One has only to see the market impact around the world, including notable bank failures and resultant moves to nationalize some of the most afflicted in the UK and Benelux for example, to understand that we are a global economy, and that means we are almost by definition truly intertwined. And, for better or worse, this global economy still crucially utilizes, at least in part, a reserve currency that needs to retain some value.

On a social level, our bizarre sense that retail brands, and product purchases could continue to provide us a sense of ‘identity’ and ‘belonging’ have almost supplanted religion as the opiate of the masses. And while we could argue with Marx’s characterization of religion in this sense, it would be hard to argue about the impact of consumer identification in this regard.

My friend and ally Fred Combe has argued that perhaps community, spending time with people, taking delight in life’s gentler pleasures, contributing to the well being of others, ought to all make a come back as an antidote to the consumer gorging that has defined us for too long.

He’s right in the sense that we can’t shrivel our souls and selves to the point that they depend on the latest electronic or beauty diversion we can pick up on the shelves. Not unless we want to shelve other critical human faculties critical to both happiness and progress.

Might we flex other human faculties as a result of being shocked by all the turmoil? Might we heighten the ability to concentrate on music or books, to focus on the world around us and the people we care most about, to appreciate our surroundings, to connect to people and listen to them, to communicate more broadly and less superficially, to savor a variety of aesthetic as well as sensual pleasures — not all which are rolled into our next credit line extension or mall acquisition?

Let’s hope so! It would be psychologically redemptive as well as practically advisable!

LEADERSHIP OPPORTUNITY

Once more I think people will be looking for value, real partnership, and genuine service. And companies that understand this trifecta will flourish.

It would be churlish to think that human ingenuity has run out, or that people will cease to have desires that can be productively fulfilled in profitable ways by others.

However, people will be less likely to be taken in as easily by hype one suspects and want more than ‘smoke and mirrors’ in the value they receive. Hurrah! That should be good news for any substantive organization. How to make that value most relevant and most evident will be important and inescapable challenges.

Secondarily, in times of turbulence, trust comes to matter even more. Look at the slump in approval for John McCain at least as of this writing, due to a downturn of trust (merited or otherwise) in the Republican party-at-large in the US (because they have been largely in power for the last eight years). This has been exacerbated by the Iraq war, and most critically the current economic crisis.

So we need to partner, to connect, to become true advisors, to commit to customer ‘success’ not just fleeting ‘satisfaction’. Companies that do this authentically and passionately, will win and deserve to.

People have wondered on the other hand, why Barack Obama doesn’t surge further ahead in polls. Arguably, other than demographics of party loyalty and the ground-breaking choice he represents, he tends to be somewhat aloof and professorial. People want him to connect at a gut level, and have more blood flowing in his pronouncements.

Leaders and companies take note! We will have to partner yes, but viscerally, connecting with emotions, fears, anxieties and aspirations.

And so we come to genuine service. Of late it has been a badge of faith that the premium market is growing, the low price point market is growing, but the undifferentiated middle is disappearing and losing ground. I suspect there will again be a place for the middle ground.

On the one hand, great value will certainly be needed. So companies providing high quality cost-effective solutions, will do well. Secondly, the premium market will change, but will still (if it plays the game right) potentially thrive. There is incalculable wealth in the world and those appetites will still want sating.

What may change is a movement against the rampant democratization of luxury as credit won’t be as readily available for people to orgiastically purchase what they can’t afford. Even there however, as in certain cultures like France and Italy, people may be just become more selective, and opt to buy fewer, higher quality items, that they save for, and then truly enjoy, cherish and utilize. A bit like the Patek Phillipe ad that reminds us that you buy the watch not just for yourself, but for generations. Doubtless a bit hyped, but that type of resilience and timeless appeal in the highest quality products may once more make us yearn for, save for, and invest in true craftsmanship.

A lot of the dross is likely to be rinsed out of the market, and a more sane value equation, based on more than PR pyrotechnics is likely to return. Therefore companies wanting to sharpen both their USP, their actual delivery, and the quality of customer engagement and insight, are well advised to act on that impulse and instutionalize it!!

FIGHT THE RIGHT BATTLES

I originally hail from Pakistan. For numerous clients from Unilever, to Maersk, to BAT, to Telenor, to large public events, I’ve delivered them at the Marriott in Islamabad. Yes, that one. The one that is now a smoldering memory.

No one should underestimate the virulence of extremism or its antipathy to anything resembling real progress.

Whatever the merits of the Iraq war, Pakistan is clearly the epicenter of this global challenge. Pakistan’s own forces once fomented the Taliban as a hedge against Indian influence and the perceived chaos in Afghanistan in the mid 90′s. Now the Frankenstein monster has come home to roost. Nuclear Pakistan borders (uneasily for historic reasons) nuclear India, virtually nuclear Iran, and besieged Afghanistan. With all due respect to differing views, not thinking this confluence of challenges wasn’t worth more thought than it has been given in all the mania over Iraq, is hard to defend.

Business application: especially now, pick your own battles carefully, and fight the right ones, the ones that will matter most to the market, to your customers, and which will give you the greatest return on not only investment, but also energy.

Don’t be swayed by hobbyhorses, you want advisers who resemble those in JFK’s White House during the Cuban missile crisis, where passionately divergent views from highly informed and variously intelligent people were shuttlecocked, heard, debated, and built upon. This is no time for blinkers, for pet peeves, for biases, or delusions.

Oliver Wendell Holmes once said that truth is the shifting residue from a competition of ideas. If not “truth”, then certainly the best strategy we can formulate and activate! Our job as leaders is to get the best from divergent points of view. The Manhattan Project was not only ‘do or die’, it was ‘synergise and catalyze’ with some of the world’s towering scientific intellects (and egos) at hand. That’s where Oppenheimer seems to have really pulled it off. We have to do likewise. Tolerating soporific head-nodding or presiding over a banal bit of rubber stamping just won’t suffice when the stakes are so great and the certainties so few.

Pick your battles, pick your advisors to help pick those battles that will take you forward, and agree how to fight them — and then deliver in that arena with all your passion, follow-through and will.

TALENT AGAIN!!

Spencer Stuart has done a study of CPG companies and the role of the country manager given the global centralization of brand categories that set overall strategy. The study concludes that one of the most critical bits of value-add from the country manager is to attract and grow local talent. The study suggests that country managers should be explicitly measured based on the quality of the leadership retention and development they demonstrate.

Absolutely. However, I would suggest that any study, done of virtually any industry, in any location, will conclude that key leaders should really be judged on talent attraction, development, retention and engagement!

Speaking at a CEO Conference for Businessweek, a fellow panelist pointed out that in India the rate of annual turnover in leading organizations is close to 60%. In China and other parts of Asia Pacific, it’s about 30-35%. Any company that improves these numbers, that reduces turnover among the most talented, will optimize performance, results, work culture and reduce waste, rework and more. They will in short have a palpable, measurable strategic and competitive advantage.

Moreover, if companies can fast-track the development of high potential global talents — and do so in a way that encourages them to connect with each across cultural and paradigmatic boundaries and co-create effectively — they will create a far more diverse, arguably more plugged in, and potentially more effective combination of leaders.

At a time of intense uncertainty as we seek fresh footholds in the shifting sands of opportunity, companies that become talent magnets, with a compelling employee value proposition, environments that provide for exciting stimulus and meaningful coaching and development, that have exciting projects that need an array of talent, and where performance-fostering collaboration is incentivized and rewarded, will win the ongoing talent wars. They will therefore seek out and honor leaders who can help create communities of talent. Such places will become oases of both creative connection and virtuoso performance. Let’s get on this bandwagon and expand our bandwidth for fostering such environments.

DEFINING SUCCESS GOING FORWARD

With all that is afoot today, leaders have to retain (or at the very least, regain) their balance, their equilibrium, their energy and their focus.

We must cultivate a sense of connection to communities we care about.

We have to become students of reality and do a ‘deep dive’ into opportunities to learn which ones are most viable, most real, and most critical.

We must remember to continue to differentiate on the basis of real value, real service and real partnership.

And we must provide environments the best people want to work in and can flourish in.

When people are uncertain, they need us to provide the assurance, the confidence, the imagination, and the commitment to their success they seek from those they do business with.

Provide that, and even turbulent times can lead, however uneasily, to profound progress!

Let’s vote with and for such progress, and let’s help make progress real for those we care about, those we serve, and those who work with us to help us deliver our vision.

Let’s keep our hearts, minds AND eyes open! And let’s lead that way, coach that way, and collaborate that way too.