Sunday, September 19, 2010

How to Lead Your Organisation Out of the Recession

In a Harvard Business Review article, March 2010, Donald Sull wrote that, “more than ever, companies need agility – the capability to consistently spot and execute on unexpected opportunities before rivals do.”

“As companies crawl out of the recession,” Sull says, “it’s not enough for leaders to ‘craft’ the perfect strategy, put their heads down, and make it happen, confident that the market will cooperate. Instead, they must set a broad strategic direction but remain open to unexpected opportunities that appear along the way. And make no mistake – for all their risks, volatile markets do produce opportunities. Shifting regulations generate unexpected sources of funding; changing consumer preferences create demand for new products or services; distressed competitors sell off assets cheaply” (p.71).

A downturn in the market often tests how well organisations have applied and implemented core business principles, relevant to their industry; and developed a strong business foundation – those principles that they may have not considered important while the ‘sun was shinning.’ Have they developed a loyal customer base and do they have the channels in place to engage with their customers directly, to find out in ‘real time’ what their expectations are; and to be able to react quickly to changing needs and expectations. Has the organisation attracted and retained the best talent – the talent that sees obstacles as opportunities, and aren’t sitting somewhere, sulking which a calculator, wondering how much their bonus will be cut this year. Has the organisation developed strong collaborative partnerships with key organisations that include their suppliers, advisors and/or custodians of outsourced functions; to ensure that they can work together, through the tough times, to find new opportunities that will benefit all involved?

One of my favourite quotes, states that;
There are three types of organisation,
Those that make things happen,
Those that watch things happen, and
Those that wonder what happened.

In a time of global crisis, organisations must make things happen for themselves – this can be achieved by initially watching the competition and/or market for unique opportunities. However, you cannot afford to ‘sit and watch’ for too long and must be alert and focused to respond quickly to any opportunity that arises for your organisation to grow, either within your existing markets, or through new markets or new products and services. This requires flexibility at all levels of the organisation, a flexible strategic leadership team who are focused on sustainable growth and adaptable to change; and a flexible organisation, that has its ear to the ground picking up customer ‘chatter’, and that have an internal communication process that can feed the relevant information to the decision makers quickly and accurately.

The business environment is unlikely to return to how it was before the recession and hence organisations need to focus on attracting and retaining the best talent for their current and future strategic initiatives. Business success cannot be taken for granted, having the right talent will ensure organisations implement the business principles they need for a solid foundation; and that leads to sustainable business growth and continuous improvement into the future.

The organisations that come out of the recession as the future leaders in their respective industries will ensure that;

1) They attract, develop and retain the best talent, from the strategic leadership to the employee base;
2) They have a culture that embraces innovation and diversification;
3) They thrive on problem solving and flexible responsiveness;
4) They embrace strong values and social responsibility; and
5) They set the standards for other organisations to follow.


References

Sull, D. (2010). Are You Ready to Rebound. Harvard Business Review, Vol. 88, Issue 2, P.70-74.

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