Having played sports and served in the military, I have
often heard the saying "when the going gets tough, the
tough get going." In today's business environment, I
find that leadership is more essential than ever and
that tough decisions must be made with higher
stakes than ever riding on the outcomes.
It is during market cycles like the current
one—created by economic and market
turmoil—that decisions need to be made that
can position a company in the best possible ways for
continued future profitability and growth. Leaders need
to scrutinize every facet of an organization's operation
and take actions that can provide stewardship through
the difficult times.
There are five areas during times like these that
should receive significant attention: 1) Structure
Creep; 2) Management; 3) Poor Performers; 4)
Products and Programs; and 5) Market
Aggressiveness.
Structure Creep happens to most
organizations
during good times. Staff and support functions
proliferate because the supposition is that controls
and extra people support a growing bottom line. The
argument is then made that more programs/controls
can make the bottom line even better. At that point,
areas outside direct customer contact and line
operations can explode. The problem is that even in
good times, as staff support gets bigger, all the work
they generate is passed on to line operations to
execute. Those critical customer-facing operations get
bogged down in the implementation of a plethora of
well-intentioned but cumbersome recommendations.
The customer and production costs become the
ultimate victims. The best way to attack this issue is to
always monitor support-oriented positions and not let
them grow at such an unjustifiably fast rate. If staff
support has ballooned, the
imperative—especially in environments like the
current one—is to maintain customer-facing
staff levels while reducing the support structure.
Management is crucial to the organization. An
organization needs to look for and find managers who
are people oriented and who think outside the box to
develop ways to better serve their customers at a
lower cost. In good times, the number of managers
tends to grow and the ratio of management to
production employees gets smaller. However, an
organization should regularly aim for a ratio in the
range 1:15 to 1:20. It is important to evaluate
management using the key components of employee
input, critical thinking, and accountability to improve
results. No one should get a "bye"–only
effective management in smaller numbers and fewer
layers should be retained to keep the organization
vibrant.
Poor Performers should be eliminated.
Unfortunately,
too often organizations let mediocre or even the worst
performers stay onboard. Managing performance is
the number one measure of a good manager. If an
employee is given an opportunity to improve and
doesn't, keeping them around does the organization a
disfavor. Speed in dealing with performance is
important because maintaining poor performers over
a long period brings down the entire organization's
performance levels.
Products and Programs should be reviewed
to see if
they are customer-oriented, profitable, and not counter-
productive. Many products/programs are kept because
one customer likes them or a senior manager is
enamored of them. The fact is, many managers are
not adaptable to changing needs or environments.
Programs are started, take on a life of their own, and
then are maintained at the expense of efficiency
because things have "always been done that way." To
eliminate non-essential products or programs, you
have to go through your
portfolio—meticulously—and make sure
that all programs and processes support the
organization's direction and profitability. If the answer
is no (don't accept "maybe"), eliminate it and
the work
and resources that go with it.
Exercising Market Aggressiveness during
economic
upheaval can work to your advantage. Your
competitors are probably struggling as well, so if you
eliminate unnecessary costs and poor performers,
you can channel your efforts toward aggressive
market activity to capture business from those in your
environment that are not adapting as well to the
changing times. Look at the landscape and use
lasered opportunities to create growth in tough times.
In down times, the company that improves its position
in the market will experience greater profitability and
faster growth when recovery starts.
The best way to deal with the five areas of attention in
your company is to make market aggressiveness a
part of your corporate culture in good times and bad.
Managing people, processes, and
technology—coupled with a constant focus on
results—places the emphasis on the most
important part of the old saying: "…the
tough get
going!"
