Good Morning!
MANAGING IN A DOWN ECONOMY
As I speak to CEO peer groups and work with
clients, something has struck me over the
past year or so: there is an entire
generation of leaders who have never managed
during or through an economic downturn.
Through no fault of their own, many of
today's leaders have experienced only a
growth economy; the last real recession was
probably 1990-91, so anyone who has become a
leader since then has never really seen the
conditions we are faced with today.
THE CEO'S JOB IN A DOWN ECONOMY
While I have seen at least four economic
downturns, I have never seen one as deep or
widespread as this one. One of the most
critical roles a CEO has in this kind of
economy is to reassure leaders and employees
alike, and to put this downcycle into
perspective for them. The single thing that
causes employees the most angst and fear is
not believing that their management has a
plan. It is helpful if they know something
about the plan (long-term goals and
projections, as well as short-term focus
areas and priorities), but it is more
important that they believe that the leaders
of their company have a plan and process to
execute it. This is why companies that have
adopted some process to create a vision and
then execute it are so far ahead in managing
through the current downturn. The companies
that I work with and speak to that have
adopted some
process like The CEO Advantage, are in much
better shape and have more control over their
destiny than those who only started to plan
when times got tough.
For younger leaders, it is especially
critical that CEOs help put this downturn in
perspective. Leaders are paid to lead in bad
times as well as good times. Leadership isn't
rocket science; it depends on putting the right
people in place (we can never have enough "A"
players), the right alignment around goals
and what is truly important, and a culture of
accountability to achieve results.
Great leaders are always asking "What things
could we stop doing that would help us
maintain positive cash flow?" This should be
the primary focus for any company today;
maintaining positive cash flow through the
current economic times. And secondarily,
companies should be looking for opportunities
to grow market share and business by adding
more value and staying intensely focused on
customers. In a true consultative manner, we
should be thinking about what products and
services we can bring to our customers to
help them in turn with their customers.
Smart CEOs will spend even more time meeting
with and talking to employees and leaders to
reassure them - and not with pie-in-the-sky
optimism, because people will see right
through that. The message needs to be that
strong companies will not only survive but
prosper during tough times, and that leaders
get paid to lead through any economic conditions.
After all, if a leader sticks around long
enough, he will see at least two and probably
more economic downturns. This experience will
be a great education for the next one!
Best regards,
Jim Alampi
Alampi & Associates LLC
phone:
248.349.6045
