No, I’m not going to talk politics. But, I am going to write about some leadership lessons we can all learn from the initiative to establish national healthcare.
The Leader’s Role
My ‘pocket guide’ for the leader’s role is that he or she is to set the vision for the organization and then inspire, guide and equip others to achieve it. It’s an active role of course and its success depends on both the clear and compelling story the vision tells and the leader’s capacity to effectively guide and equip others to achieve it.
Success doesn’t depend on the leader’s charisma. Charisma is nice but if the vision doesn’t inspire others, the leader will have few followers. Think Carly Fiorina and HP/Compac. Likewise, charisma- challenged leaders have accomplished great things. Think Carly’s successor, Mark Hurd. The vision must be right for the organization and compelling to those who’ve signed on to follow. Think Apple and Steve Jobs. Everybody gets it, believes it’s worthwhile and possible, wants to be a part of it, and knows what to do to make it happen.
Further, the leader must demonstrate his or her willingness to be actively and credibly involved in guiding those responsible for executing the work required. He or she must also to invest in them to ensure they have the necessary skills, tools and processes. That is, to go beyond mere exhortation and truly equip them for success.
The Vision for Healthcare
The goal is worthwhile but vague and the leader’s vision is not clear—exactly what is it, who is to benefit and how. Those who want to make it happen are not sure exactly what to do. The leader isn’t sure either and has delegated the important task of clarifying the vision to 535 others who each have their own, unclear vision. They are not the leader but they now have unclear leadership roles.
Because the leader is not clear about exactly what has to happen to accomplish his vision, he’s necessarily unclear about how to guide or equip these others to achieve it.
However, the leader is not lacking in charisma which reinforces my earlier point.
The Lesson for Our Leadership
We might protest and say, “My business is not like the government. We have a clear vision and my people know what to do”. Perhaps we’ve got a valid point so where is the lesson for us?
We should ask ourselves, “If I ask my top people to individually write down my vision and the top two or three drivers that are critical to achieving it and who is critical to accomplishing these, how close would all the answers be to one another?” If they all would match, we should run for President of the US!
Perhaps what’s more likely is that we’d get variation in the responses and learn of some confusion. This costs us money, can confuse customers, and add to the uncertainty about what our employees think really matters and what they should be doing. Maybe we could do better.
I once again offer my pocket guide for leadership for what it’s worth to us!
The effective leader sets the (clear, compelling) vision that inspires action. He or she then guides and equips all the people with what is necessary for them to achieve it. Doing this gets our initiatives accomplished on time and on budget and keeps our people and customers inspired!
September 1, 2009
August 21, 2009
What is My Business?
The question may seem ridiculous. Most business owners are quite certain in their answer. Maybe they’re even the leader in their field and their customers love them. End of story. Or is it?
A Market Leader Gets Surprised
Consider Proctor and Gamble, the world’s leading marketer. Consumers count on them for meaningful innovations to make their lives easier, retailers depend on their innovations to drive revenue and profit growth. P&G’s margins are at the most enviable levels. They know exactly what their business is—they’re the innovation leader in their markets, the one on whom everyone depends. What could be better?
The economy! When the recession started CEO Arthur Lafley reassured retailers, analysts and investors that his innovation strategy was more right than ever. He’s a smart guy with a stellar record of success. Few argued.
As the recession has worn on however, P&G’s revenue growth has faltered. Consumers simply avoid premium products in all categories as they adjust their spending in response to their real or anticipated economic circumstances. Retailers are responding in their best interests by expanding their offers of low-priced house brand products. P&G made the mistake of assuming that what matters most to customers now would continue to matter most. They were surprised! Yesterday’s winning strategy has become today’s challenge. P&G’s leadership is threatened and they must take action.
The challenge is that they spend billions positioning their brands as the leaders in innovation and people have expectations when they purchase them. If they simply cut their prices, goodbye margins and we all know there is no going back from there. If they remove costly features from their products, they’ll have no advantage and would be reduced to competing strictly on price and their brand reputation would suffer, goodbye margins again! They’re now developing their response and as a winning company they’ll no doubt get it right (more about their response in a future blog)!
What this means for business leaders
Leaders know that to win they must deliver what truly matters to their customers and do it better than anyone. But we’ve now seen that what matters can change quickly. The lesson from P&G is that to continue to win, leaders must strive be very aware of all the things that can change what matters to their customers. And, they need to understand how their customers may respond to these things and where they’ll need to move to get there ahead of them. Thus, leaders should consider not only “What is my business” but also “what should it be”.
Where to look for answers
Leaders can find the answers by keeping their eyes and ears not only on their customers and competitors like P&G does so well, but also on all of the other environments that can impact their market—the Political, Economic, Social, Technological, Environmental and Legal worlds around us. In P&G’s case (and many, many others), the Economic environment is the primary driver of change but the recession is affecting Social change as well.
Adding these to their ‘intelligence collection’ efforts can keep leaders ahead of the game. It can help them position themselves where they should be.
The good news is that these worlds contain not only threats but opportunities as well! Doing this well can help a leader maybe even outperform P&G!
A Market Leader Gets Surprised
Consider Proctor and Gamble, the world’s leading marketer. Consumers count on them for meaningful innovations to make their lives easier, retailers depend on their innovations to drive revenue and profit growth. P&G’s margins are at the most enviable levels. They know exactly what their business is—they’re the innovation leader in their markets, the one on whom everyone depends. What could be better?
The economy! When the recession started CEO Arthur Lafley reassured retailers, analysts and investors that his innovation strategy was more right than ever. He’s a smart guy with a stellar record of success. Few argued.
As the recession has worn on however, P&G’s revenue growth has faltered. Consumers simply avoid premium products in all categories as they adjust their spending in response to their real or anticipated economic circumstances. Retailers are responding in their best interests by expanding their offers of low-priced house brand products. P&G made the mistake of assuming that what matters most to customers now would continue to matter most. They were surprised! Yesterday’s winning strategy has become today’s challenge. P&G’s leadership is threatened and they must take action.
The challenge is that they spend billions positioning their brands as the leaders in innovation and people have expectations when they purchase them. If they simply cut their prices, goodbye margins and we all know there is no going back from there. If they remove costly features from their products, they’ll have no advantage and would be reduced to competing strictly on price and their brand reputation would suffer, goodbye margins again! They’re now developing their response and as a winning company they’ll no doubt get it right (more about their response in a future blog)!
What this means for business leaders
Leaders know that to win they must deliver what truly matters to their customers and do it better than anyone. But we’ve now seen that what matters can change quickly. The lesson from P&G is that to continue to win, leaders must strive be very aware of all the things that can change what matters to their customers. And, they need to understand how their customers may respond to these things and where they’ll need to move to get there ahead of them. Thus, leaders should consider not only “What is my business” but also “what should it be”.
Where to look for answers
Leaders can find the answers by keeping their eyes and ears not only on their customers and competitors like P&G does so well, but also on all of the other environments that can impact their market—the Political, Economic, Social, Technological, Environmental and Legal worlds around us. In P&G’s case (and many, many others), the Economic environment is the primary driver of change but the recession is affecting Social change as well.
Adding these to their ‘intelligence collection’ efforts can keep leaders ahead of the game. It can help them position themselves where they should be.
The good news is that these worlds contain not only threats but opportunities as well! Doing this well can help a leader maybe even outperform P&G!
February 13, 2009
The Leader’s Guide to Strategy for Today
The objective of business strategy of course is to win in your market.
In these times of severe economic challenge though, how much attention can you pay to strategy if your primary objective is to simply survive?
The answer is effective strategy is always critical and this is so now more than ever. Here’s why.
Many companies are responding to today’s challenges with actions that can actually do more harm than good. These actions include across-the-board cuts in staff and expenses, and the cancellation of critical projects and product development.
Clearly, cuts may be the right thing and perhaps the only thing that will ensure survival. But, the danger with across-the-board cuts is that while you may be eliminating the truly expendable you likely may also be damaging the critical drivers of your business.
These non-discriminatory actions can also send the signal that the leader does not truly understand what could best position the company to survive these times. Or that the leader cannot make the tough choices to save what is truly critical and cut what isn’t. This could harm the necessary support from those who remain.
So then, what to do? Focus, Protect, Preserve and Emerge!
· FOCUS your thoughts, plans and efforts on a coordinated, strategic response that will:
· PROTECT against vulnerabilities: cash position and flow, health of customers and suppliers and key strategic partners
· PRESERVE your money-making capabilities but cut those activities, customers and suppliers that do not contribute to your money making (unless they clearly will in the near future). This will position you to:
· EMERGE more focused and capable to lead in the direction your market is headed
Here’s how to do it.
ASSESS what is critical to your company right now and for the future that is likely to emerge:
· CUSTOMERS; which are best positioned to survive and thrive, how are they likely to respond, how are you positioned to serve their current and emerging needs? Allocate your resources to those efforts that will best position you to emerge as their key supplier (soon to be strategic partner). Which customers are not well positioned and how should you manage your relationship with them (credit terms, limits, investments). Divert resources away from them to fund the efforts mentioned above.
· COMPETITORS; which are best positioned to survive and thrive and how. What are their likely responses? What must you do to stay ahead of their responses? Which are weakened and how can you capitalize? How can you communicate your responses to your customers to ensure you keep or win their favor?
· SUPPLIERS; assess as you would a customer but with the focus on which can best help you position your company to best serve your key customers’ current and emerging needs.
DECIDE, PLAN AND COMMUNICATE
Based on the knowledge learned from your assessments, make your decisions regarding what is critical to your company’s survival and future success. Prepare your plans regarding how you will implement your responses within your company. That is, based on who and what is critical to your survival and emergence, what changes are needed in your structure, roles and processes? Who will make them and when? How will you communicate them and implement. Be sure to give voice to those who have the institutional knowledge to help you make the best decisions.
Now do it!
Summary
You have now prepared a sensible, workable strategic response to the challenges facing your company. You are positioning your company to emerge in its best possible position. Your company and your people are on your way to building the strategic know-how that will sustain your new position over time.
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