2008: A Lesson in Recession and Leadership
The axiom “sales cure all ills” rings more true today than ever. More than anything it teaches us an inarguable lesson: that is, we learn more about leadership in bad times than we do in good times.
To prove this theory to yourself, imagine your company just 18 months ago in June 2007. If your business is like most others, you were humming along and times were great. In fact, times were so good that waste, excess and poor leadership went nearly unnoticed. Why would anyone care if “Bob” was a poor leader? His region’s sales were good and that’s all that mattered, right?
Wrong. Because sales does tend to cure all ills – strike that: sales covers up all ills – you didn’t really care that Bob had poor communication skills, had completed no succession planning, and that his team was largely incompetent. They were selling and that’s all that mattered.
Sales Cannot be Your Only KPM
Once the bottom started to fall out, of course, you looked to Bob for answers. Why, your company asked, was his region in such disarray? No one ever assumed it was poor leadership, because no one ever cared to look that closely. Bob surmised that they were just in a “tough market” and that things would turn around in the second quarter.
Well, the second quarter ended up worse than the first, and your company began to realize that Bob’s region was not only losing money, it was also losing market share. It wasn’t just the market, it must be something else.
Not sure what was happening, your CEO asked Bob in the third quarter to give him a plan on how to turnaround the region. Bob’s plan, of course, included cuts so severe that your company lost muscle and bone along with some of the fat. (Because Bob had no idea why the good times were good, he had no idea how to return to them.) The few truly valuable people in Bob’s region left and the sycophants hung on for dear life. Sales continued to decline and no one had any answers.
Last month, your company let Bob go and realigned his region. Upon further review, you discovered that Bob had been losing market share all along – even in the good times – but that he benefited from a growing market and a perception at headquarters that he was a leader. You scratch your head today and ask yourself, “How could we have been so blind?”
Join the club. The issues at your company are not atypical. Nearly every corporation suffers from the same blindness in the good times: a form of near-sightedness so severe no one can see the forest or the trees. Only when we’re faced with near collapse do we bother to look closer; to examine what’s really happening.
The funniest thing to me about the whole “Bob situation” at your company is that anyone is shocked that it was caused by a lack of leadership. Imagine what your company could have achieved during the good times if Bob’s lack of leadership had been identified years ago; imagine how much easier this recession would be on the employees in that region if Bob had never been at the helm.
Perhaps after this recession – sometime in 2009 or 2010 – companies who were hard hit will place the proper value on real leadership and examine every input; not just the outputs. (For those that survive, that is.)