Organizations must exercise collaboration, mental agility, and judgment to be ready to grow again when the recession ends
When the global economy finally starts to rebound, will you be ready to drive growth in your organization? That's a question I discussed recently with a group of senior executives during a business trip to Singapore. Many of these leaders represented leading multinationals in finance, manufacturing, and technology. All of them were consumed with the challenge of leading through this historic recession, and many of them have had to cut their work forces significantly. But they are also trying hard to keep their sights on the horizon—and we all need to follow their lead.
This recession will end. We don't know when, but it will. When the recession ends, organizations that can take advantage of emerging opportunities will have the best chance to grow. To position themselves for success, the executives I met in Singapore agreed they will need leaders who are highly skilled in at least three core aspects of leadership: collaboration, mental agility, and judgment.
When it comes to collaboration, here's the good news: Most leaders know it's important. But this is the disturbing part: Their organizations usually aren't very good at it. In fact, 97% of executives and managers surveyed by CCL acknowledged that collaboration is a key to business success. And yet just 47% of these same executives said their colleagues are skilled collaborators. That's a big gap, and it will carry bottom-line consequences. Though it is fashionable these days to say otherwise, command-and-control styles of leadership are still much in vogue. As a leader, it's tempting to walk into a meeting, listen to your colleagues talk for a few minutes about a problem and then say: "O.K., here's our plan for solving this. Go do it now."
But you are likely to get better results when you involve more men and women in your decisions. John Chambers, CEO of Internet networking and communications equipment giant Cisco Systems (CSCO), has gained widespread publicity for using collaborative leadership to transform his company. Cisco used to rely on about 10 top executives to make key decisions; it now involves 500 of them. Reaching collective business goals, rather than individual benchmarks, take precedence in deciding pay and advancement. At Cisco, boards and councils that are representative of the whole business, rather than individual champions, drive key projects and new products.
The bottom line: Profits are up, and operating expenses down. The Center for Creative Leadership worked with Textron, (TXT) a Fortune 500 company whose brands include Bell Helicopter and Cessna Aircraft, to help Textron reshape itself from a classic holding company into a streamlined, networked enterprise. By increasing collaboration across business groups, Textron reduced its number of medical plans in the U.S. from 154 to 2, from 40 payroll systems to 3, and created a shared technology infrastructure. Most important, it began finding a far greater number of its top executives from within the company.
In a previous column, I discussed the importance of learning agility in leadership success. There's a related skill that Ram Charan and others have termed "mental agility"—and it's critically important for knowing how to reposition your company during and after tough economic times. With mental agility, you can monitor changes in the market place, figure out what customers want, and adjust your strategy to deliver it. Repositioning your business isn't easy. It calls for digging through a vast array of options and zeroing in on the one or two that most resonate with clients.
Doing this hard work effectively requires an agile mind. During my visit to Singapore, several executives referred to a recent cover story in The Economist on "Asia's Shock." Many countries in Asia-Pacific have positioned themselves quite successfully as leading exporters. Now, however, external demand for their goods is drying up, forcing them to find new avenues to growth. Many business enterprises around the world, from the largest corporations to the newest startups, are experiencing a steep drop in revenues. Just like the nations of Asia, they need to adjust as quickly as possible. Success starts with a nimble and open mind.
Finally, there's judgment. This skill, in my estimation, is perhaps the most critical of the three discussed in this column. To a great extent, it determines your organization's capacity for collaboration and its overall level of mental agility, because judgment involves making some important wagers about the future of your business. Right now, for instance, you need to be making some bets on your people. You'll want to have the right ones on board to execute your strategy when the recovery begins to take hold.
Executives I've talked to say the recession has prompted them to take a close look at restructuring their organizations. They're asking themselves some difficult, and often times painful, questions. Which men and women should they keep? Should some of them be moved into different roles that better unleash their talents? Are there others they should let go? What new talent and skills will their enterprises need when the economy gets rolling again? This adversity is a good time to build in discipline around talent that might have been missing previously.
At the same time, it's important to make some bets on business strategy. This is a great time to look for partnerships that could extend your reach into a new geography or a new market niche. Take my own organization, for example. Though we're global, we have fewer than 500 employees. So it's not possible, or even desirable, for us to have our own people everywhere. Instead, we work with a pool of more than 500 adjunct faculty and coaches that speak many languages and have been trained by our experts. We can also greatly extend our reach by partnering with other institutions. In fact, we must.
Just like so many other industries, executive education is getting hurt by this downturn. Resources are tight. But we're still making some strategic bets on our future. Earlier this year, with the help of some corporate and educational partners, we opened an office in Moscow. We're well on the way to setting up an office in India. Are these initiatives tapping resources that could be used to address more immediate issues elsewhere in my organization? Of course. But we're also not second-guessing our decision to move into these markets—and that's because now is simply no time to stop searching for tomorrow's engines of growth.