Keep Your Head
A little perspective: “Of the 100 largest industrial companies in 1912, by 1995, 29 had gone bankrupt, 48 disappeared (mergers, acquisitions and so on)… and 52 survived, but only 19 remained in the top 100,” wrote Paul Ormerod in his book, Why Most Things Fail: Evolution, Extinction and Economics.
So, it seems, over time kingdoms crumble, leaders fall and markets retract. Call it what you will—reorganization and restructuring, overcapacity adjustment, thinning of the herd, survival of the fittest. Or, just random horrible circumstances—external shocks such as rising oil prices, hurricanes, credit crises and mortgage delinquencies. Whatever stacked the odds in favor of this record-setting recession, as Ormerod insists, we are not completely helpless in the face of failure. He writes:
“(Companies) fail because of the inherent uncertainties in any complex system. Despite our best intentions, outcomes often do not match desired effects. It is impossible to get around this simple fact, and no amount of intelligent analysis will change the situation. We are not completely helpless in the face of the Iron Law of Failure… Indeed, it is the dynamic of competition, innovation and experimentation that must be promoted.”
How does a workforce remain focused, upbeat and confident that its company can continue to compete and innovate? As people leave, emotions run wild and people become easily distracted. I’m sure that for most of the readers of this magazine, uncertainty now has become the only constant. But even through difficult times, your company’s customers must remain confident in your ability to deliver solid service and quality products on time.
To do this, human-resource consultants Claire Logan and Rhonda James, of PA Consulting Group, stress that companies must focus on delivery as usual. They recommend that company executives devise more manageable short-term strategic plans, and that these plans be well-communicated to teams so that the performance bar remains high. Coach your top leaders. They need to fully understand the situation so that they can communicate accurate messages and make decisions based on factual information. Engage your employees to develop and encourage two-way communication channels that you and your employees can rely on.
Now is probably not the best time to be focused on your long-term 3- to 5-yr. plan. Rather, set a course for three to six months, and develop a set of short-term objectives to steer that course. Make sure that the entire organization understands those objectives and is committed to pulling in the same direction. And, I suppose, be sure to account for the flexibility needed to navigate the twists and turns that even the short course will surely take. Here’s where employee commitment becomes critical, as they must open their minds to new concepts that will help their company react quickly to these twists and turns.
Preparing this editorial, I took a long pause to consider the famous Kipling poem, “If.” I paraphrase:
Leaders keep their heads when others around are losing theirs.
Trust yourself when others doubt you.
Treat triumph and disaster just the same.
And, when you must watch the things you gave your life to become broken, pledge to rebuild them with worn-out tools.
We will emerge from this crisis—consumer confidence will again rise, the auto industry will stabilize, housing construction will increase and unemployment will drop.
And as with past recessions, our manufacturing companies will reach new levels of productivity growth. This much I know for sure.
Hopefully, we’ll also all become better at managing risk and credit.
“Even through difficult times, customers must remain confident in your company’s ability to deliver solid service and quality products on time.”
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