LeaderLine

Pulling the Right Levers in Tough Economic Times

Jeffrey Immelt, CEO GE, has said, "Every company has to grapple with a slower-growth world. They have to figure out which levers to pull to drive growth in a way that's value-added, so you're not just doing it through price reductions. I put R&D at the top of the list."

You can't just cut your prices and expect to survive in today's uncertain economy. The answer is not in competing on price or waiting for direction. Change leaders invest available time in positioning for new opportunities.

In recent years, GE has more than doubled its investment, to $1.5 billion by 2010, in technologies that include cleaner coal-fired power plants, a diesel-and-electric hybrid locomotive and agricultural silicon that cuts the amount of water and pesticide used in spraying fields.

Don't bemoan what isn't selling today; get busy finding the aspirin for today's economic headache! They are working to tap the growth market in resource-efficient products.

What do change agents do when they are worried? They invest their worry time in constructive actions to help invent the future.

If demand is down in your organization, what are you doing to position yourself for opportunities that are growing?

(Source: Jeffrey Immelt, CEO GE, USA Today & Wall Street Journal)

Focus Your Analysis to Produce Results not Hide Them

A.G. Lafley, CEO of Proctor & Gamble, shared a strategy to streamline strategic product reviews: "When we get our strategy product reviews right, we can boil it down to a one-page document that provides the clarity for everyone--and more consistent execution."

When CEO Lafley first arrived at Procter & Gamble, he was displeased with the process for conducting annual strategy reviews that analyzed the future for every Proctor & Gamble product. He observed that previously they had been more theater than targeted debate. Too often the show was just a way to justify poor performance, and the actors expected a rubber stamp approval for their performance. Lafley junked the old process and installed a new one demanding more scrutiny and rewarding actual results. First, he required each division-head to send the presentation to him before the review. Lafley would send back a handful of key questions or concerns that were to be the focus of the review. The presenters were limited to a three page report. The report was short but the analysis exhaustive. Instead of wrapping up the analysis in a day, the process could last days or weeks until everyone agrees. He focuses each review debate around two objectives: "where to play" and "how to win."

The trouble with large organizations is that rather than say no to underperforming programs or products, they just carry them as extra baggage. The poor performers are dragged along by those products and services that do produce results. That baggage creates a burden that can derail even successful companies. Where is your organization hiding in "theater" that allows poor performance to continue? How could you institute a process that puts every product or service under review for its very existence every year?

Move resources to where they can make the most difference, and be ready to reinvest those resources every year. Comment on what you are doing to focus your resources where it counts!

(Source: A.G. Lafley, CEO of Proctor & Gamble, in Paula Kaihla, "Best-Kept Secrets of the World's Best Companies," Business 2.0, April 2006, pp. 82-96)

Speed Counts

Andy Grove has a way of making provocative points: "When products and services are indistinguishable from each other, all there is by way of competitive advantage is time."

Speed to market, time to customer, being there when and where people want your service or product--Speed has value in today's high-speed global economy.

How many of you are trapped in never-ending task forces looking at projects that should have resulted in action months ago? Agile competitors are making the moves you ought to be making. Americans have a short attention span and an inability to look at things in depth. Those you serve want you to do high-speed due diligence to provide solutions they need, and they want those solutions yesterday.

The best leaders keep speed to market as a primary metric worth driving. When you make it important, your people will make it important. New innovative projects are too easy to add to the pile. We get stuck protecting established habits and outdated products and services. When you hold to aggressive time lines, people have to be innovative to survive. They come up with creative ideas they would not even mention if time was not as critical. Aggressive deadlines may have to be adjusted, but they prompt purposeful action in pursuit of strategic goals.

Where do you need to add time pressure to the projects that matter most?

(Source: Andy Grove, Bauman, 3M Accelerated Leadership Development Program presentation, September 16, 2005)

Experience and Expertise Must Count

Barbara Ehrenreich, the author of Bait and Switch, was quoted in Fast Company. She challenges the growing tendency to cast aside workers with the most experience at a time we need them most. She asserts, "There is a profound discounting of experience going on that we're going to have reexamine if we're going to keep up with the rest of the world. There seems to be a growing culture of incompetence where who knows whom and who likes whom weigh more than getting the job done. Even more perverse is the constant culling out of the high achievers. If you get a raise, it's like having a bull's-eye painted on your back. You are just an expense, and a bigger expense, so let's get rid of you. How will American business face the challenge of the rising economies of China and India? Those nations are emphasizing skill and a proven track record."

To win in the competitive and changing global economy, we are going to need the best from our most experienced workers and to capitalize on the innovative, fresh perspectives new employees will bring. We don't need companies following form and cutting valuable employees. We need companies who can build on the diversity of thinking that comes from challenging everyone to help invent the future.

In upcoming years, there's going to be a worker shortage in America. The demographics are clear. You should not be jettisoning your most experienced workers. You ought to be helping them to retool, reposition and revitalize their commitment to help reach your organization's strategic business goals. If they have been a good dog, with proper care and support, they can learn new tricks!

Excellence is hard to find. When you have excellent associates, use them to infect your new teams with a passion for excellence and a commitment to lifelong learning. Loyalty and excellence can be taught. Firing your best because they are too expensive sends the wrong message--if you're too good for too long around here, you get fired!

(Source: Barbara Ehrenreich, author of Bait and Switch, Fast Company, March 2006, p. 22)