A meaningful trait people desire during a down economy is authenticity (I believe this is true for an up economy as well only it is easier to mask in good times). Let’s have someone look us in the eye and tell us truth. Let’s have them expose information and motive transparently. Let’s have them state their ideas but not their solutions – yet. Let’s have them ask for our participation for this will affect us significantly.
When time is essential, let’s have authentic leaders lead with trust.
In companies, in politics, in personal relationships, people are desirous for authentic leadership. Never before have we had so much information but so few with the qualities to interpret and use information in a meaningful way. If ever we’ve needed authentic leaders, it is now.
Thriving in the new era of Transparency
Authentic leaders are those who are motivated purely and can discover reality. They are sound in their knowledge and understanding about their business and lives. This soundness serves to provide a foundation for which they can operate. Leveraging this foundation, they use well founded abilities to oversee their businesses or lives based upon transparent information.
Authentic leaders are those who can dialogue. They engage and ask people to participate. They know they don’t know everything but they trust their ability to understand reality and learn. They trust their motive. They use dialogue to build trust and relationships. They use dialogue to discover reality about their business and those things which impact it. They use dialogue to create high quality meaningful experiences. The relationships they build produce commonality about how to weather good times and bad. They keenly understand the difference between hype and accurate meaning (they are hesitant to buy into their own hype). They understand they are in the same boat with their employees and families.
Making Better Decisions
Authentic leaders are those who can make high quality decisions. They have honed skills to listen, gather information, and interpret while validating using multiple sources of feedback. They have contextual awareness and understand the importance of the timing of decisions. Discernment is core and habitual. They can balance the tension between multiple forces and motives.
Authentic leaders are, well, authentic. No pretense here. Their motive is consistent and explicit. They hold themselves to a level of accountability they expect from others. They expect those they serve to hold them accountable. They will cut of themselves instead of protecting their own lives (they are sound in business and their personal lives – notice I’m not saying conservative). They know what they should know and they seek to understand that which they don’t know. They are confident they will listen. They are confident they will learn. They will serve.
Winning in a Down Economy
In today’s economic condition, basic economic principals reign – working capital and cash flow are king. The authentic leader will work diligently with his resources to understand the clear financial and business position of the business. They will work hard understand true risk.
Hoarding capital and being maniacal about cash flow and margins are essential. Unfortunately, too many companies do not have a business engine that can produce the required working capital and cash flow. Hence their great need to depend on debt. The authentic leader will understand if their business is on the side of the fence that can hoard capital and maximize profit or if they are on the other side of the fence where they must create less than desirable solutions to survive in this environment.
If the leader finds himself on the side with less desirable options, hopefully the leader will work to create authentic solutions (including the possibility of changing his or hers own lifestyle to cut burden on the company). Hopefully they will work to harness the power of people as a team to hunker down to save the company and employees’ jobs. If they find they cannot save the company, hopefully the leader will communicate reality well with all people involved so that these people will not be blindsided and unprepared.
I remember when Lehman Brother’s CEO, Richard Fuld was called in front of Congress and asked if he saw the failure of Lehman coming. His response is that of a gambler, someone with an addiction and in denial. He says that he had hope to the very end. And he will always wonder until his grave why Lehman wasn’t bailed out. We can’t afford leaders like this. We need authenticity.
Don’t hide from measurements
In addition to understanding the fundamentals of the business, leaders need to understand essential leading indicator levers which provide insight to some significant wave. Just like a tsunami, water is first drawn out to sea, we must understand these levers so we can take action quickly. These levers may be measuring AR turnover to see if key customers are not paying any longer or if they are just paying late. The leader must understand the only way to discover the deep meaning of this aspect of a business is through great relationships with people – employees, vendors, customers along with great information.
I recently had a conversation with a good friend who works for a large commercial developer. The conversation surrounded a new investment the firm created focused on short term returns. The company is having difficulty selling this investment because people can often discern inauthentic products. This product was communicated with hype. Customers are looking for authenticity. Under the covers of this company, the product was created to develop liquidity because lending has dried up. They don’t have needed working capital or cash flow to manage their current projects. Most importantly, leadership has not communicated this to staff. Instead they created pressure to sell a meaningless product which will hurt long term relationships and the core business. Additionally, they have stopped paying bonuses without any information to staff from leadership. In lieu of information, people speculate and people create their own story.
Authentic leaders provide authentic stories which stand the test of time. By the way, one of the core owners of this firm was overheard sharing that he is ok losing his home in the Hamptons, or his ski home but the one thing he cannot let go of is the private jet. The motive is pretty clear.
After understanding reality and core levers to oversee the business, the authentic leader will have a foundation in place to create multi faceted plans. These plans will differ based upon the reality of a business. For a healthy known company flush with capital with healthy margined cash flow, they can have multiple plans from protectionist to opportunistic. For the company with less desirable options, fewer authentic solutions exist. These options may be related to speaking with the employee base, core vendors and finance partners to create mechanisms to salvage the company.
Hope is not a Strategy
Hope is never a foundation for an authentic leader. I find it hard to comprehend how the NBA can cut 9% (or about 80 people) of its corporate workforce citing the current economic pressures. Granted, it is possible the NBA was bloated with people but 9% is hard to fathom. I’m estimating here, but 80 people at $50k per year is $4,000,000 per year. The mid level exception for one basketball player is $4.5 million. I sure wish we’d see more authentic leadership choosing to cut their own lifestyles instead of cutting employees only source of lifestyle (note: I’m not a believer of big government redistribution of wealth and I want people to have the right to choose but I’d sure like to see more people choosing social responsibility versus self serving entitlement).
Lastly, the authentic business leader will drive their company to provide higher quality experiences with their employees, their vendors and their customers. Often, quality doesn’t actually cost any more to produce. Have you ever eaten at a Chick-fil-a? Have you ever noticed what every employee says when you say ‘thank you’ or complete your order? They simply say ‘my pleasure’. They say this regardless if the store is next door to the owner or 3000 miles away. Do you believe it cost them anymore to require this of their people? I doubt it. However, I’ve seen the faces of people who enjoy being served and hearing the words – my pleasure – after they’ve been serving others all day. The overall experience increased but the cost of providing the increased quality was insignificant. Authentic leaders will drive increases in quality experience knowing this will increase the opportunity for the company to weather any storm.
Summary
In short, this is what I’m doing. Hoarding capital, maximizing margined cash flow. I’m making sure our people understand our core operational values. We’re providing focus to increase quality across the entire business. I spend quite a bit of time dialoguing one on one and in groups being diligent to provide consistent authentic messages. I’ve focused on lowering the number of vendors (within balance and risk tolerances) we use to build higher quality vendor relationships we can leverage in any negative case. I’m focused on building great relationships with our people, our customers and vendors in preparation for any hard conversation we may need to have. I have regular conversations with executive staff to better articulate and understand essential leading indicator levers – particularly those which indicate negative outcomes.
Lastly, I’ve communicated with staff that in the case of extreme negative conditions, I’m the first person to have my pay lowered or eliminated. No one else will be asked to take lower pay or be cut until my pay is lowered or eliminated.
I’ve long believed that all value is created at the point of exchange, the finite time services and goods are exchanged. My learnings for more than 20 years have been geared at how to close the gap where it matters most. This blog will study all kinds of concepts, ideas and strategies around this focus – why the gap is widening, what can be done to bridge the gap, and what the economic impacts are of a focus on customer value.
The Foundation is Built on Authenticity
A meaningful trait people desire during a down economy is authenticity (I believe this is true for an up economy as well only it is easier to mask in good times). Let’s have someone look us in the eye and tell us truth. Let’s have them expose information and motive transparently. Let’s have them state their ideas but not their solutions – yet. Let’s have them ask for our participation for this will affect us significantly.
When time is essential, let’s have authentic leaders lead with trust.
In companies, in politics, in personal relationships, people are desirous for authentic leadership. Never before have we had so much information but so few with the qualities to interpret and use information in a meaningful way. If ever we’ve needed authentic leaders, it is now.
Thriving in the new era of Transparency
Authentic leaders are those who are motivated purely and can discover reality. They are sound in their knowledge and understanding about their business and lives. This soundness serves to provide a foundation for which they can operate. Leveraging this foundation, they use well founded abilities to oversee their businesses or lives based upon transparent information.
Authentic leaders are those who can dialogue. They engage and ask people to participate. They know they don’t know everything but they trust their ability to understand reality and learn. They trust their motive. They use dialogue to build trust and relationships. They use dialogue to discover reality about their business and those things which impact it. They use dialogue to create high quality meaningful experiences. The relationships they build produce commonality about how to weather good times and bad. They keenly understand the difference between hype and accurate meaning (they are hesitant to buy into their own hype). They understand they are in the same boat with their employees and families.
Making Better Decisions
Authentic leaders are those who can make high quality decisions. They have honed skills to listen, gather information, and interpret while validating using multiple sources of feedback. They have contextual awareness and understand the importance of the timing of decisions. Discernment is core and habitual. They can balance the tension between multiple forces and motives.
Authentic leaders are, well, authentic. No pretense here. Their motive is consistent and explicit. They hold themselves to a level of accountability they expect from others. They expect those they serve to hold them accountable. They will cut of themselves instead of protecting their own lives (they are sound in business and their personal lives – notice I’m not saying conservative). They know what they should know and they seek to understand that which they don’t know. They are confident they will listen. They are confident they will learn. They will serve.
Winning in a Down Economy
In today’s economic condition, basic economic principals reign – working capital and cash flow are king. The authentic leader will work diligently with his resources to understand the clear financial and business position of the business. They will work hard understand true risk.
Hoarding capital and being maniacal about cash flow and margins are essential. Unfortunately, too many companies do not have a business engine that can produce the required working capital and cash flow. Hence their great need to depend on debt. The authentic leader will understand if their business is on the side of the fence that can hoard capital and maximize profit or if they are on the other side of the fence where they must create less than desirable solutions to survive in this environment.
If the leader finds himself on the side with less desirable options, hopefully the leader will work to create authentic solutions (including the possibility of changing his or hers own lifestyle to cut burden on the company). Hopefully they will work to harness the power of people as a team to hunker down to save the company and employees’ jobs. If they find they cannot save the company, hopefully the leader will communicate reality well with all people involved so that these people will not be blindsided and unprepared.
I remember when Lehman Brother’s CEO, Richard Fuld was called in front of Congress and asked if he saw the failure of Lehman coming. His response is that of a gambler, someone with an addiction and in denial. He says that he had hope to the very end. And he will always wonder until his grave why Lehman wasn’t bailed out. We can’t afford leaders like this. We need authenticity.
Don’t hide from measurements
In addition to understanding the fundamentals of the business, leaders need to understand essential leading indicator levers which provide insight to some significant wave. Just like a tsunami, water is first drawn out to sea, we must understand these levers so we can take action quickly. These levers may be measuring AR turnover to see if key customers are not paying any longer or if they are just paying late. The leader must understand the only way to discover the deep meaning of this aspect of a business is through great relationships with people – employees, vendors, customers along with great information.
I recently had a conversation with a good friend who works for a large commercial developer. The conversation surrounded a new investment the firm created focused on short term returns. The company is having difficulty selling this investment because people can often discern inauthentic products. This product was communicated with hype. Customers are looking for authenticity. Under the covers of this company, the product was created to develop liquidity because lending has dried up. They don’t have needed working capital or cash flow to manage their current projects. Most importantly, leadership has not communicated this to staff. Instead they created pressure to sell a meaningless product which will hurt long term relationships and the core business. Additionally, they have stopped paying bonuses without any information to staff from leadership. In lieu of information, people speculate and people create their own story.
Authentic leaders provide authentic stories which stand the test of time. By the way, one of the core owners of this firm was overheard sharing that he is ok losing his home in the Hamptons, or his ski home but the one thing he cannot let go of is the private jet. The motive is pretty clear.
After understanding reality and core levers to oversee the business, the authentic leader will have a foundation in place to create multi faceted plans. These plans will differ based upon the reality of a business. For a healthy known company flush with capital with healthy margined cash flow, they can have multiple plans from protectionist to opportunistic. For the company with less desirable options, fewer authentic solutions exist. These options may be related to speaking with the employee base, core vendors and finance partners to create mechanisms to salvage the company.
Hope is not a Strategy
Hope is never a foundation for an authentic leader. I find it hard to comprehend how the NBA can cut 9% (or about 80 people) of its corporate workforce citing the current economic pressures. Granted, it is possible the NBA was bloated with people but 9% is hard to fathom. I’m estimating here, but 80 people at $50k per year is $4,000,000 per year. The mid level exception for one basketball player is $4.5 million. I sure wish we’d see more authentic leadership choosing to cut their own lifestyles instead of cutting employees only source of lifestyle (note: I’m not a believer of big government redistribution of wealth and I want people to have the right to choose but I’d sure like to see more people choosing social responsibility versus self serving entitlement).
Lastly, the authentic business leader will drive their company to provide higher quality experiences with their employees, their vendors and their customers. Often, quality doesn’t actually cost any more to produce. Have you ever eaten at a Chick-fil-a? Have you ever noticed what every employee says when you say ‘thank you’ or complete your order? They simply say ‘my pleasure’. They say this regardless if the store is next door to the owner or 3000 miles away. Do you believe it cost them anymore to require this of their people? I doubt it. However, I’ve seen the faces of people who enjoy being served and hearing the words – my pleasure – after they’ve been serving others all day. The overall experience increased but the cost of providing the increased quality was insignificant. Authentic leaders will drive increases in quality experience knowing this will increase the opportunity for the company to weather any storm.
Summary
In short, this is what I’m doing. Hoarding capital, maximizing margined cash flow. I’m making sure our people understand our core operational values. We’re providing focus to increase quality across the entire business. I spend quite a bit of time dialoguing one on one and in groups being diligent to provide consistent authentic messages. I’ve focused on lowering the number of vendors (within balance and risk tolerances) we use to build higher quality vendor relationships we can leverage in any negative case. I’m focused on building great relationships with our people, our customers and vendors in preparation for any hard conversation we may need to have. I have regular conversations with executive staff to better articulate and understand essential leading indicator levers – particularly those which indicate negative outcomes.
Lastly, I’ve communicated with staff that in the case of extreme negative conditions, I’m the first person to have my pay lowered or eliminated. No one else will be asked to take lower pay or be cut until my pay is lowered or eliminated.