8 The leading in turbulent times checklist

‘What often happens when you have a time of crisis and things get really tense and don’t go quite the way you would like them to is that you all work better than ever before.’

John Brock, Coca-Cola Enterprises

As we come to the end of our navigation story we want to remind you of the three key ingredients needed for any leader in these turbulent times: passion, people skills (especially communication) and maintaining a long-term big vision.

Passion

Seizing the day

Turbulence will continue but that does not mean that opportunities come to an end. ‘Don’t change your dreams, that’s what I would say’, advises PwC’s Sam DiPiazza. ‘Don’t rashly decide, well, with all this uncertainty, I’m not going to pursue my long-held ambitions in finance, I’m going to go be a window washer. It might take a couple of years but this will pass, so keep investing in yourself and fight your way through it. If you invest in yourself, keep your dream, you will find a bridge from here to there.’

Ask yourself, how can we benefit from this? How can we come out the other side stronger? ‘I’m a very positive guy to begin with’, says Victor Fung. ‘I get myself fired up, and our people fired up by thinking about the opportunity side of the crisis. The initial reaction of course is fire fighting, everywhere you’re putting out fires, but very soon you say, hey, look, out of all this there’s a real opportunity, and start focusing on some of the opportunities. How we can strengthen ourselves. How we can strengthen our entire staff building skills? How do we improve our market position in the industry as we face this downturn? By focusing on the opportunity, I think we manage to energise ourselves.’

Becoming agile

Are you taking the initiative? Create a programme which sets a positive agenda. Faced with turbulence, Henry Fernandez created a campaign called Follow the Money. ‘I said, look, the money has shifted quite dramatically’, he explains. ‘The big asset management companies have centralised and frozen budgets, there is no money to be made there but there are a lot of other clients that have budgets – midsize institutions, small ones, pension funds and the like. So, Follow the Money. People have been really engaged and very creative. I focus them away from the newspaper problem, as I call it, and people got re-energised because all of a sudden they felt that they could control their destiny as opposed to feeling despair and a lack of control by looking at what was going on in the world.’

People skills

Developing a global perspective

Develop your CQ (cultural quotient). The ability to lead through different cultures across the globe and communicate effectively has never been more important.

‘The CQ is certainly crucial’, says Victor Fung. ‘It’s all one world now in every sense of the word and every problem is interconnected with every other problem. So you’re going to have to deal on a very broad gauge basis and need to be able to communicate across cultures. Also I think you have to be really information technology savvy and sensitive to the consequences of an interconnected world.’

Developing your antennae

Why? When? Where? Who? How? Do you routinely ask questions of others and yourself? The ability to ask yourself difficult questions is at the heart of communicating. Bijan Khosrowshahi, formerly CEO of Fuji Fire and Marine says: ‘Is my communication working? Is the message that I want to send out working? But on the other side you have to have some receptors to say how was it received.’ The trouble is that the further you move up the corporate hierarchy the less likely you are you have honest audience members who will give you a frank assessment on how effectively you are communicating. (As a side point here, it is interesting to note how many successful leaders have trusted sidekicks who have travelled alongside them and act as their eyes and ears in the organisation.)

How do you collect and maximise information? In turbulent times there is a premium put on information. ‘In my opinion, when the economy is in recession, a significant task of management is to seek various kinds of information’, says Wang Jianzhou of China Mobile. ‘Now I spend more time in acquiring information. I follow financial news, stock market information, as well as information concerning ICT development. The demand changes in the telecom market are my greatest concern.’

Managing people

People always. ‘I live with a motto of treasuring every encounter with people’, Yorihiko Kojima, President and CEO of Mitsubishi Corporation told us. ‘Our strength lies in trust from our stakeholders. It is important to strengthen trust-based relationships inside the company.’

People will always ask questions. Bring them onboard or count them out.‘If you get somebody who’s really a tough bird, always positioning for more money, always pushing the envelope, you bring them in early and make them part of the solution’, advises PwC’s Sam DiPiazza. ‘Let them know, I need your help here, you’ve got to help us through this. If then they continue to say, well, what about me me me, you’ve got to deal with them straight up, because whatever you do the whole organisation is watching. These days, you know, nobody is going to be a real winner, it’s more of a question of just how big the losers will be.’

Trust breeds trust

Jill Kanin-Lovers draws from her experience as a board member, to comment: ‘There has been a lot of talk about agility focused on business operations. Cultural agility is equally important. During the past 10 years I have served on the Board of Directors for five corporations, all in completely different industries. Each has had to address business challenges, some more pressing than others. I have participated in numerous acquisitions, divestitures, and, as a sign of the times, an unfortunate Chapter 11 filing.

‘One of my key learnings is how effective strong leadership which emphasises trust is the driver in making the workforce agile. This can’t be something that you decide to ‘implement’ as part of a business crisis plan – it has to be there before the crisis hits. No one wants a reduction-in-force programme, but as a board member, I have seen the difference in how a programme is accepted and implemented based on the trust that existed beforehand. Treating those exiting with respect and dignity is critical for keeping the ‘survivors’ engaged and agile in addressing new business issues.

‘In the recent economic crisis, many companies have had to take actions never anticipated before. It has been a real test of leadership and a reflection of the trust that was cultivated previously. I was particularly impressed by two examples. First, one company for which I am a director, announced a one-day reduction in the working week for employees at a service centre. Rather than being greeted with cynicism, the employees actually gave the leadership team a standing ovation. The employees trusted management and knew they were trying to save jobs.

‘At another company, the process of letting people go was done with such and care and sensitivity that the CEO received notes from employees in the organisation saying how proud they were of how this difficult situation was handled. In earlier years, RIFs [reductions in force] had taken place in this organisation for similar business reasons, but the results were disastrous. The former CEO (before my time) had not built the degree of trust throughout the organisation that this new CEO has. The lack of trust existed independently of the business decision. After this, the organisation really struggled to get back on track as the workforce lacked the agility to move forward. Under the new CEO, the organisation was immediately galvanised to address the business realities. As a leader you need to make the tough calls – but you also need the organisation to be agile enough to not only bounce back but thrive going forward.’

Remember that your customers are people too. They also need and require your soft side skills to keep them loyal and committed to your enterprise. How many customers do you meet? Customers are the lifeblood of any business. We asked Kris Gopalakrishnan of Infosys about the most significant change to his working habits brought about the upsurge in turbulence. ‘I am in front of our customers more, which I think is to be expected’, he said simply.

Communicating

Is your communication honest and upfront? Really? As we have seen, people respond positively if they get the full story, unvarnished by spin, unkeepable promises or bull. One company we talked to told its employees that the annual sales jamboree in Florida was going to be cancelled. The company felt that not flying hundreds of people to Tampa was a worthwhile saving. It expected there would be uproar from dissatisfied sales execs denied their winter sun and margaritas. A webcast seemed something of a limp replacement, but the CEO explained that the choice was stark: Tampa or a large cash saving and the saving of jobs. This straight talking actually concentrated people’s minds and turned their focus on making tough decisions in their workplaces.

How transparent are your communications? Be open otherwise you run the risk of your messages being hijacked.

‘Your employees are part of multiple groups, multiple communities and multiple social networks. Everybody can blog and publish. There is no way you can prevent information from coming out. It can come out in multiple ways. You have to make sure that you have higher levels of transparency. With every decision that is communicated internally we have to expect that it can become headlines in the newspapers. We must be prepared and ready for that’, says Kris Gopalakrishnan of Infosys.

What barriers to communication exist in your organisation? How can you remove them? Culture, corporate history and engrained behaviours stalk the corporate corridors. The leader’s job must be to remove barriers to communication of all sorts. ‘There are two problems with communications’, says Severstal’s Alexey Mordashov in a typically honest assessment of his own company. ‘Some parts of the company have just not been with the company long enough to be integrated well enough. It’s a challenge, and communication should help, but people often just don’t know the rules. And not all parts of the company are up to date with the changes required by the free market economy. The degree of bureaucracy, red tape, in many parts of the company, is very high, and it’s a great impediment to communication. And we just have to remove it.’ And so say all of us.

Long-term vision

Thinking big while fighting fires

Think big at all times. ‘Always try and keep the big picture in mind – where do we want to go? It can be too easy to be sucked into fire fighting in tough times,’ advises Talal Al Zain. ‘Yes, you need to go into detail but it’s important you don’t stay there. You need to regularly look around you, stay engaged with others and find out what’s happening in the world outside of your organisation.’

Learning to love uncertainty while you maintain your vision

Uncertainty is a fact of commercial life. Face the facts. Says Nick Stephan of Phoenix Partners: ‘You get more and more comfortable with the uncertainty. You figure out what your worst case scenario is going to be, prepare for it and try to improve from there. And that’s how we’ve attacked this problem and we’re now at a point where we’re okay with this.’

Clearly stating what you value

What are the key measures of success? An organisation’s culture and outlook is formed by how success is measured by its leaders. Mark Frissora of Hertz says: ‘I believe in running a business on three principles, and around three things. Customer satisfaction, employee satisfaction, and cash management. And I don’t let any one of those three things ever get out of balance, because I’ve always found that if you decide you want to cut things with employees, eventually your customer satisfaction or your cash management goes down. The same thing is true with any one of those three things, you cut one, and it has a direct relationship on the other two. Eventually the other two are compromised. So we keep all of our measurements in the company equally focused around those three areas. Keeping that balance, keeping investing in people even in tough times, celebrating successes, constantly rewarding and recognising people that are doing a good job during these adverse times: that’s how you keep the positive energy in the organisation.’

Building organisational radar for future storms and opportunities

Turbulence is the new reality. How far ahead are you looking? What does the next downturn look like? Are you ready? ‘The world has moved enough in the direction that Tom Friedman¹ talks about, the world is flat. Thanks to IT and logistics, the response time is being shortened more and more’, says Victor Fung. ‘Before it might take a whole decade to play out, now it’s being played out within months. The world has fundamentally changed in terms of the cycle time, and the frequencies of these booms and busts. It’s not going to be 50 years; it’s been compressed. We have to plan to face these types of tsunamis on a periodic basis.’

What is your future? While you’re putting out the fire think about where future fires will be. Says Henry Fernandez: ‘In an environment like this, you’re the captain of the fire team and you have your own hose putting out the fire. You’re sitting there and you’re trying to anticipate is the fire going to go to the next house, is it going to take the whole neighbourhood? So, leadership is about trying to figure out what is going to happen and how do you position yourself, even if you’re in the middle of this horrendous crisis?’

And this brings us back to a leader’s passion.

Setting an example

What does your face say? Bad news is a virus leaders cannot afford to spread. Henry Fernandez: ‘To the leaders of the company, I always keep telling them it’s not about you, it’s about them. It’s about the employees in front of you. If you have a bad day, you hide it, my friend, because you can be transmitting a virus. We are a very hard-charging company but we try to create an environment in which people take time off. We preach very aggressively that they should not focus on the papers, not focus on the financial markets, that they should relax when they can. When they’re here there’s a high level of intensity but they focus on the positives, focus on the benefit that we’re going to get out of this crisis and I keep telling them, look, we know all the problems, we know that clients are going to go out of business, that products are going to get cancelled. All of that is a given. We know what it is. Let’s focus on what we can improve.’

How do you look? How does what you are doing look to employees? Leadership is about setting an example 24/7. ‘We know that because growth has slowed, bonus payments and the like will be lower, because the company has not met its goals. But the leadership example starts at the top. We cut the bonus for the top first, before anybody else gets affected’, says Kris of Infosys.

Keeping the faith

How philosophical are you? Cycles happen. A solid business does not become a bad one overnight. There has to be a sense of realism to a leader’s view of the turbulent world. ‘So long as there are cycles they are going to affect you and you need to take them in your stride. Things will change and there is no need to reset your basic theses in terms of the growth opportunities’, suggests K.V. Kamath.

As a final word, let’s hear from Jeff Immelt, CEO of General Electric. We saw Immelt speak about his leadership challenges. His words struck an impressive chord. Watching Immelt talk, there is a sense of confidence and competence, rather than the heady scent of ego transmitted by many CEOs on the world stage. ‘Running GE is a full-time job. I have had five days off in nine months’, he admits. ‘You need to be comfortable with yourself and being criticised. My advice to people is to do what you like. The thing I love about GE is that we’re going to have a front seat in history whether it’s in China or elsewhere.’ Immelt is sitting comfortably but not complacently. He describes himself as optimistic but anxious about the future. ‘We have a platform for real change and I am convinced GE will emerge as a better company.’

Much the same sentiments were expressed by many leaders we spoke to. They feel they have a front seat in history. They realise there is a choice: to make history or to become it.