Rodney Johnson - Without Warning

Over the past decade, GE has been a source of World Class leaders for numerous companies.  For instance, Jeff Immelt, James McNerney and Robert Nardelli were each hoping to receive the nod from Jack Welch upon his retirement.  Jeff Immelt was selected.  Although in the past year, GE’s stock price has experienced a 75+% decline. James McNerny became the CEO of 3M and now heads up Boeing.  Boeing’s stock price has declined upwards of 65% in the past 12 months.  And Robert Nardelli moved over to Home Depot where his tenure was suspect and now heads up Chrysler, which is flirting with bankruptcy.

Here is the question.  In the future, will the perceived value of leaders emerging out of GE be tarnished?

From my perspective, most emerging leaders have cut their teeth in three arenas in recent years. International trade, aka the World is Flat model.  Secondly, high finance.  And third, growth through Merger and Acquisitions.  Suddenly, the World looks significantly different than it did a year ago.  What was in vogue, is quickly going out of favor.  For many companies, it will be getting back to basics.

Is the GE leadership model out of vogue?  If yes, what type of leader will be in demand over the next 3-5 years?

The comedic duo of Stan Laurel (the skinny one) and Oliver Hardy were a popular comedy team back in the days when Black and White was still popular.  And one of their most memorable lines was, “This is a fine mess you got us into.”   Well I was thinking about this line and the similar statures between that of Rush Limbaugh (Oliver Hardy), the overly pompous Republican soothsayer and that of President Barack Obama (Stan Laurel), the straight guy.   

Well, in recent weeks, Limbaugh has challenged the President to a debate on his talk show.  And the only conclusion I see coming out of this would be these final words from Limbaugh, “Well, Mr. President, this is a fine mess you got us into.”  Unfortunately, President Obama is giving Limbaugh more than enough material to make this phrase apply, at least at the moment.  And unless something reverses course, “a fine mess” could denote the first year of his presidency.  So far, the stimulus isn’t stimulating.  And his economic plan isn’t being very economic. 

Well, in Without Warning fashion, I expect Saturday Night Live to quickly create an ongoing skit with Limbaugh and Obama in the oval office.  And the designation, “Well Mr. President, this is a fine mess you’ve gotten us into” will come to life.

As the economy slows, how do you know you’re making the right decisions?  What are the right actions?  Where do you cut?  What and whom is expendable?  Truth is, leading in a down economy is difficult, with more traps and distractions that could put any seasoned veteran leader down for the count. 

Why is this?

Truth is, we’re programmed and educated in the processes of “how to grow” a business.  Incentive plans, strategic plans, product development are all generally based on growth.  Not contraction. Which leads us to my first point.  Leading in a downturn is psychologically challenging, and you must accept the challenge with open arms.  Most leaders simply will be unable to say, “I’m not participating in this recession.”  The depth of the recession is simply to broad and too deep to avoid.  The second challenge should be taken for granted.  You will need to make numerous unpopular decisions.  Accept the fact you will not be Mr. Popularity for some time to come.  Third, don’t forget to do the things that made your business successful in the first place.  Actions related to customer service, quality, a pleasant work environment and keeping the remaining workforce motivated and appreciated is paramount to your success. 

The natural inclination for business leaders to pursue at this juncture is to make something BIG happen.  However, Without Warning events tend to emerge from messing up on the little things.  At this point, taking care of the little things is more important than ever.  Now go do it.

Welcome to a whole new world.  A place where constant turmoil is making business plans irrelavant, leaders challenged and sound decision making paramount to survival.

How can you lead and win in this environment?

Over the past 6-months, most business leaders have come to realize they must lead differently.  They understand that business as normal doesn’t exist.  They comprehend that long term plans are on hold, and short term decisions are key to survival.  They know the rules to the game have changed.  And its this last point that is relevant and important, which is why I like numerous aspects of this manifesto over at ChangeThis  It looks back at the origins of improv on the Southside of Chicago during the depths of the great Depresssion.  It states, In the periods of upheaval, imagination triumphs over status quo, and innovators and visionaries find opportunities that do not exist in balmier times.  Viola Spolin, the mother of improv in her 1963 book  “Improvisation for Theater” writes, “In its simplest terms, it is giving problems to solve problems.”

In today’s environtment, every leader is given problems from the environment in which they reside.  In turn, leaders are expected to solve these problems as they surface, which at times might resemble ”Improv.”  It’s thinking, acting and deciding as you go.  At times, this will be awkward and troublesome.  At other times, it might present opportunities to pursue and potentially, exploit.

Yes, at times, “Business is Improv.”

It takes a lot of ingredients to make a business run smoothly and efficiently. Unfortunately, few businesses can make this claim today. Credit is tight to non-existent. Clients are focusing on survival at almost any cost. Relationships are strained, with no improvement in sight. Each of these leads to a general lack of visibility, the secret sauce to running a profitable business.

Now everyone is running scared. Orders are slashed and released to their venders at the last second. Oftentimes with unrealistic expectations and demands attached to them. Bankers are cutting lines of credit, oftentimes without notice. This is quickly evolving into a world where previous rules no longer apply, and new standards are being put into place. Often with little or no consideration to those it impacts. Every action and reaction across the supply chain is further reducing Visibility.

My concern, this is another one of those Without Warning scenarios. Short-term thinkers are making long-term plays. During more normal times when similar situations emerged, many companies could simply fire their customer, client or supplier. However today, businesses are fighting to retain whatever business they can, and firing a customer isn’t plausible. This allows an imbalance in the system to emerge and sustain itself.

The quickest means of exiting this recession is if everyone were to restrain from extreme acts and a healthy dose of civility emerged. Helping improve Visibility in the supply chain will help all. If we don’t, an old Swahili saying might apply, “When elephants fight, it’s the grass that suffers.”