Posts Tagged ‘Economic_downturn

20
Mar
11

Ready Made Leaders

The need to renew capitalism is clear. Trust in businesspeople is at historically low levels and our economy is struggling to make a comeback. Structural changes are needed, as well as each of us to take a personal stand on right and wrong. We explored some of the ways each of us can engage in order to change our poor public image.  

A friend of mine also reminded me of some great examples in our society. These people are consistently ranked at the top of public perception surveys. They are unquestioned leaders, taking on the toughest situations. Finally, they contribute to our country in innumerable ways. 

HeroOf course, these are the men and women of our armed forces. They make personal sacrifices so that we can live securely. They willingly step into to the toughest situations and provide an immediate response to difficult and complicated situations. They serve all of us and make our lives better by doing things we could never do for ourselves. 

These leaders are now finding new roles as business leaders. Their training and experience allows them to step into key roles and quickly make an impact. They only require some specific subject matter knowledge to become valuable members of a business team and ready to make a difference.  

Not only that, they are ready to be great examples and show us how to make a difference as well!

 

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06
Mar
11

Changing Capitalism – Part 2

It’s time to refresh our capitalistic system. It is the greatest economic system ever devised by mankind and it requires constant attention and vigilance to maintain its relevance and vitality. These are times that demand that leaders step forward and take a courageous stand. 

At its core, capitalism depends on trust and leadership to survive and thrive. Right now, trust in business leaders is at an all-time low. We need to change business-as-usual in order to change the tide. If we don’t raise the bar and hold our profession to a higher standard, we will cede the right to control our future to politicians and regulators. 

Unfortunately, we deserve the ratings we are receiving right now. Our leaders have been involved in numerous ethical breaches from Enron to Wall Street. We have failed to truly embrace innovation in a way that harnesses all our talents and potential. We surrendered some of the strongest parts of our economy to foreign producers. As businesspeople, we have not done a terrific job in maintaining our world leadership. 

The Great Recession only emphasized these points. The downturn left us with high unemployment and slow growth. Our traditional growth engines have stalled with little opportunity for robust recovery. It’s unclear how we will grow in the future and people are looking for leaders who can make sense out of the present situation. 

It’s time for business leaders to step up and the downturn provides many opportunities. Managers can no longer masquerade as leaders: The present situation is too important and too fertile to be left to people looking for incremental solutions or actions that worked in the past. Stress opens gaps for genuine change and opportunities to engage in a new way. 

The true challenge to refresh capitalism is to raise the bar for all participants. It’s time to demand better performance on all fronts – not just the financial metrics. All of us must live up to a higher standard of personal performance and ethical benchmarks. It starts with each one of us individually answering the challenge. 

We live up to the standards individually, but we are judged collectively. Therefore, it is no longer acceptable to just look at our own performance and the performance of our charges. We must also accept responsibility for the actions of our peers and hold them to the same level of accountability. It’s no longer acceptable to say “I’m good” and leave clean-up to someone else. We are being judged as a group and we are only as strong as our weakest link. We can no longer stand by, wring our hands, and grumble about those who let us down. 

As leaders, we must demand more from the system. That means you and it means me. How are you making yourself better this week? How are you helping your organization live up to a higher standard? What are you doing to make that standard a norm in your community? 

It’s a difficult challenge…but no hill for climbers! Our future success demands that we set the new standard.

 Are you ready for the challenge?

 

27
Feb
11

Changing Capitalism — Part 1

We face a major crisis as we move through this time of change. The Great Recession highlighted the role of businesspeople and our collective ability to impact the world’s economy. We came up wanting in this review and are now on the defensive, fighting for our ability to retain the same control over our world. Trust in business leaders is at an all-time low. We need to change the game.  

It’s time to take a stand for capitalism – a new type of capitalism. It’s an all-inclusive form of capitalism that goes beyond financial statements. The new capitalism takes a long-term view of business and a broad view of our impact. The new capitalism watches the bottom line and the impact business has on all stakeholders. It requires a new structure and a new ethical perspective. This week we discuss how to change the game structurally. Next time we will explore the ethical impact of our actions. 

There’s a great article outlining the structural changes necessary to change the game in the March 2011 issue of the Harvard Business Review. Dominic Barton of McKinsey wrote “Capitalism for the Long Term.” In the article, he outlines three structural changes necessary to reposition capitalism:

  1.        Overcoming the tyranny of the short term;
  2.       Serving stakeholders and enriching shareholders; and
  3.       Acting like an owner.

Business leaders must take action to change the game on all three fronts.

We have been caught up in a self-perpetuating cycle of the short-term. Short-term returns from short-term owners have driven executives to focus on short-term results. The cycle continues to tighten as the pressure for higher and faster returns accelerates. Ironically, the focus on results actually reduces the enterprise value. New leaders must uncouple this cycle and have the courage and foresight to position the enterprise for the long-term. 

Adam Smith

Serving stakeholders and enriching shareholders have traditionally been seen as mutually exclusive. The new capitalism requires a return to some very old values – values outlined by Adam Smith in 1759. “All the members of human society stand in need of each others assistance, and are likewise exposed to mutual injuries…” Smith wrote outlining the interdependence between business and society at large and it never echoed as loud as it does now. Business needs a healthy society and vice-versa. It’s our responsibility to make both prosper. 

Acting Like Owners

Finally, there’s a need for all businesspeople to act like they own the place. Not just in the superficial way improvement consultants want us to approach day-to-day decisions, but also in the way we align our rewards with true ownership. That means a more sensible approach to pay, including real downside for top managers’ incentive plans. That also means stronger boards and a redefinition of shareholder democracy that rewards long-term ownership. These are all courageous stances – and all necessary to make a difference. 

These changes require new leadership. The traditional skills are still necessary, but no longer sufficient. New leaders must be able to lead from the rear as well as the front, integrating their entire teams into their activities. These three changes are just the start. In order for the changes to take root and grow, our ethical stance must also change… 

…but that’s next week’s blog!

 

 

01
Jan
11

The Heck with Resolutions! Let’s Make Commitments!

Happy New Year! 

It’s a time for fresh starts. Traditionally, many of us make resolutions to improve ourselves or our situations. The top resolutions are more exercise, losing weight, and getting finances in order. The start of a New Year is a natural time to start these improvement efforts. 

Unfortunately, most resolutions fail within the first thirty days. It’s understandable. Most new habits take 30 days to establish and most of our goals are too big to accomplish within that time. Inertia is difficult to overcome and big goals make it more difficult to change. 

This year, let’s take a different tack. Let’s keep our BHAGs (Big Hairy Audacious Goals), but slice them into smaller pieces. Let’s commit to take a 15 minute walk each day, instead of losing 50 pounds. Let’s commit to saving $20 a month, rather than paying off all our bills. Smaller slices can make those BHAGs more reachable. 

Those commitments will make a difference. Those little commitments add up. Change comes through people being consistent and persistent and those smaller pieces allow us to break inertia and make clear progress toward our larger goals. That progress reinforces our commitment and makes it easier to move ahead.  

Slice your BHAGs for the year into smaller commitments. Improve your change efforts and watch your success grow! 

Have a Happy New Year!

 

  

09
Oct
10

Changing the Economy

Dan Wallace and I had breakfast this week and were going through the regular “how’s your business” conversation when we swerved off into a broader discussion about the economy. We both agreed that we’re going through a “muddling” period while we try to overcome structural drags and start to create some new jobs.

We continued to talk and reflect on the changes we’ve seen during our 20+ year careers – especially the tougher times. Quickly we came to realize that these conditions look much like another time.

In the 1980s we faced a similar situation. The traditional growth engine – manufacturing –stalled and was showing no life. The recession had ended, but unemployment was still high and the recovery started without many jobs being created. It was a difficult time without much optimism.

The parallels with today are there: a tepid recovery, miniscule job growth, and stalled growth engines. This recession has shocked this economy and caused many of us to rethink our lives. It feels the same as that earlier recession.

There is one major difference.

In the earlier recession, we all know that manufacturing would never be the big driver in that recovery: the auto companies were on their butts and we were losing our edge across the board. Still, the technology and information sectors were starting to show their strength. The economy was quickly adjusting to this new reality and it was becoming clear that these sectors could pull us out of the slump.

This time it’s different. The growth sectors of the past few years are dead. Housing will not be growing for a long time. Technology looks more and more like a mature industry. The green energy sector may prove to be a driver in the long run, but there are no clear breakout businesses to drive this recovery. It’s unclear where the recovery will find its real growth fuel.

That presents different challenges to address. If you are an economist or a policy maker, it’s to decide where and when the next spurt will come. For the rest of us, it means working on our personal skills and finding our own ways to create value. It puts more of the burden on each of us individually to make a difference.

It’s a major change in our economy, but a positive one. Each of us has the opportunity to define our lives in a way that more aligns with our lifestyles, values, and talents. It causes more instability in the short-run, but longer term it will put us all on better footing for the future.

 

 

 

 

26
Sep
10

Walk in the Light!!

These difficult times can seem very dark indeed. It’s critical that we walk in the light and stay optimistic about our ability to improve ourselves and make an impact on those around us.

It’s a natural tendency in these difficult times to hide in the dark and hunker down. We tend to take fewer chances and not put ourselves at risk in any way. It’s easy to see the world as a dangerous and troublesome place. We are constantly reminded how bad we are and what we don’t have. It’s easy to see the bad and the danger in our lives and it can freeze us.

We don’t have to live that way. We are children of the light: created to live in the life, both physically and spiritually. Living in the light sets up a different equation. It takes more energy to live in the light, but it also creates more energy and provides more opportunities. It takes more effort to find the positives in situations and create new habits around those positives. Walking in the light causes us to engage with life in general, changing us in the process.

The benefits are tremendous. Walking in the light aligns us with the people with the live hearts, bright eyes, and helping hands. Finding the positive in situations makes us positive people. This alignment and positive orientation puts us in position to create new approaches and transform difficult situations.

Walking in the light impacts the people in our lives. We ease the burden of those around us by sharing a smile or a supportive word. You can change people’s lives, just by letting them know you care. The light also changes us. We learn how to make good things happen, rather than avoiding the bad. New insights put us in position to work on ourselves first, making positive changes in our own lives, rather than looking for others to change for us. These changes cause us to be more curious, more tolerant, and more impatiently patient. The light changes lives.

Try it for yourself! Here are some easy starter steps:

  • Smile! Often and for no reason give yourself permission to smile as hard as you can.
  • Ask Dad’s question. Irksome people can drag us into the dark very quickly. When my Dad encounters those people he asks, “I wonder what God has him up to today?” It’s a good question.
  • “Engage. Engage. Engage.” Deacon Tom exhorted as I left church. He’s right. The more we engage, the better we find the world to be.
  • Be thankful. We experience blessings every day in many different ways. Take time to find those blessings and be thankful for them.

Walking in the light can change your life. Allow yourself to change.

20
Mar
10

Change Needs Resilience

Resilience may be our most important quality. We live in interesting times and the demands of these times require changing responses and the ability to recover from repeated setbacks. The most flexible and resilient among us will be in the best position to take advantage of the opportunities these changing times present.

Our pressures are coming from multiple sources. Economic issues have made it difficult to protect and grow our assets. Advances in technology have eliminated many traditional sources of strength and security. These issues are also magnifying social pressures, creating gulfs between people in terms of wealth, philosophy and values, and emotional connections.

These pressures also create opportunities to improve the world as we build new systems to replace the old ones. Breaks in traditional connections and approaches open the doors for creative solutions to help people make their lives better. Look around. More than ever people are willing to share in order to help those in need. At the end of the day, it’s not governments, companies, or charity organizations that change the everyday world: It’s individuals working together every day to solve real problems.

Central to all this is resilience. It is much more likely that all of us will need to recover repeatedly from setbacks. Job tenures are shrinking. Financial and political structures are unsettled. Circumstances are changing as fast as we can adapt. Resilience used to be something that we respected and admired in other people. Now, it’s a survival skill all of us must master.

The childhood saying “if at first you don’t succeed…” should now end “…try and try and try and try again!” The ability to get up after being knocked down time and again is a key survival skill. Are you ready to get back up…again?

Oh…and while you’re getting up, look around and offer a hand to someone who’s getting up with you!




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