Wednesday, October 21, 2009

Your Leader's Biggest Challenge - EVER!!!

Getting that plane out of Schippol airport in Amsterdam is child's play compared to what's facing captains of corporations.

Look at who our leaders have been and what they've been doing for the last decade. They tend to be right brained, cause and effect, ROI people. The numbers guys. People who stare into their computers all day looking for revenue and margin. Need I mention the likes of Ken Lay, Bernie Madoff, Ken Lewis and countless others.

This wasn't always the case. Even up to the early 90's when I had an idea on how to improve the effectiveness of an organization people would say: "... yeah, but you'll never get it past the CFO." I'd say, "get me to the CEO and I'll sell it." And usually I did. The CEO understood that business was more than profits - it was about keeping the organization healthy and relevant.

Not so today. CEO's have morphed into the Senior-CFO. Employees and customers are trumped by the bottom line when it comes to business strategy and operations.

This has probably served business well in the past year. Protecting balance sheets, conserving cash, and cutting costs have been necessary to survive. Companies have cut themselves to temporary "profitability", but they can't cut themselves to sustainability. It's time for a new trick.

Leaders are facing two very big currents that could merge into a tsunami:
  • Customers: They're willing to forgive, but not to forget. They're standing at the ready to punish companies that flaunt excess - particularly in profits, executive compensation, and bonuses. They're looking to reward companies that show moral leadership and a willingness to sustain communities and the environment.
  • Employees: Employee commitment has never been so low. A recent report in The Economist showed that over the past two years it has fallen from over 95% to 39%. Equally disconcerting is that they are willing to stagnate on the job rather than move on. USA Today reported that almost 50% of employees are willing to wait more than a year to find a new job when they are dissatisfied.
This is quite a two punch for businesses trying to "turn things around." We have angry customers and disaffected employees. Wow! That's not a job for a Senior-CFO.

As we emerge from recession leaders will need to be strategic, visionary, and inspirational. Will they remember these skills? Did they ever have them? This is going to be fun.

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