|Managing in a Crisis
The current economic environment is creating a significant challenge for leaders in all
industries. The pundits say we are in uncharted waters. Certainly the government has
taken a new role that goes well beyond simple regulation. Whatever your industry
or the size of your organization, here are a few key principles you may want to keep
in mind as you face the road ahead:
Don't live in denial. - At first many told themselves it would all blow over. They continued
to hope it wasn't going to be that bad. Unfortunately, hope is not a strategy. We must face the
realities of the new environment and the longer we wait, the harder it will be.
Know your operations inside and out. - You can't manage what you don't know so take the time
to carefully analyze your operations. What are your costs per customer, per unit of service or location?
You may have to make some difficult decisions and the better you understand your operations, the better
those decisions will be.
Be proactive. - Stay ahead of the cost curve. If you can't maintain your revenue, you must adjust
your operations. I call it managing to your revenue. If you allow a deficit to accumulate,
it will have to be offset by even deeper cuts in the future.
Communicate every step of the way. - Keep your board and your leadership team involved. There should be
no surprises throughout this process. Confidence in your ability to lead will be tested.
Keep up morale. - Navigating the storm will have a psychological toll on the organization.
Make an effort to offset the stress and anxiety that many employees will experience. Be accessible and show empathy.
Provide clear direction and keep people focused.
Don't forget to lead. - If you don't lead, they won't follow. Your leadership is even more important
in times like these. Don't forget that everyone is looking to you for direction and leadership. As
you lead the charge into the recovery, don't forget to look behind you and make sure they are still with you.
For non-profit organizations there are at least two more principles to add. (Here I am talking about organizations
that are non-profit by choice not circumstance;-)
Manage all your resources. - Don't forget to leverage your volunteers. Don't be afraid to ask them to do
a little more. Some will be more distracted by their own businesses but others may have more time and will be willing
to spend it helping you through his difficult period.
It is never too late to raise additional funds. - Small targeted campaigns can help fill in some of the gaps. Requests
to meet very specific and concrete needs seem to have the best response. Don't overlook in-kind donations. Ask your
vendors and suppliers for help. If you have a donor that can't contribute like last year, ask them if there are other ways
they would be willing to help.
|The poll question last quarter asked: How likely is it that we saw the bottom in the US stock market back in November?
Here is the result:
|Our poll question this quarter is: How likely is it that economic conditions will improve before the end of 2009?
|We will report the results in the next issue. Click here to participate in our poll.
You may return to the Poll Page to monitor the results as often as you like.
|How much time do you spend thinking strategically about your organization? Unfortunately strategy is often confused with
operational effectiveness. Many organizations spend most of their strategic planning efforts on incremental improvements to their operations.
In doing so, they avoid the hard choices of deciding which areas are most important to their strategy. Strategy is more concerned
with being different. It attempts to identify a different set of activities that will generate unique value to the customer.
I have often heard managers say they want to be the "low cost producer of the highest quality product". Another one I hear is "a highly profitable
and rapidly growing". These statements fail to recognize the tradeoffs an organization must balance. Managers believe they
can avoid these tradeoffs by focusing on operational effectiveness. Done well, this approach can generate moderate success. However, rethinking
the business model in ways that redefine how you add value to your customers is the focus of a true strategic conversation.
The Planning Cycle