Recently, GBQ hosted one of its CEO Exchange events featuring a panel made up of CEOs from three venerable Columbus anchor companies. The panel discussion was about surviving the downturn and what the companies did to respond to the crisis. This is very close to the topic being addressed right now in the Redbank Executive Breakfast Series: Shock Proofing the Organization so I thought I would highlight key themes from the CEO Exchange event.
All three leaders stressed that communication in a time of crisis is important. The team will fill in the silence with speculation if leadership doesn’t. Since everyone is stressed and even good performers may be concerned about their job security and future, trust in leadership and the organization will be at low ebb. The team needs good, solid information about the situation so they can make good decisions and contribute in ways that truly do help to dig out of the problem. Over communication may be called for in these times to help drown out the cacophony of bad news, speculation and outright misinformation coming from the media and the outside world.
Of particular interest, all three leaders indicated that they became more open with financial information in particular. The approaches varied between open books and more of a need-to-know approach, but all acknowledged that they share much more financial information today than they did in 2007.
Course correct and prune early, erring on the side of deeper cuts rather than risk being bloated. Businesses, like plants, need to focus their resources on good growth paths and by pruning portions of the organization that are not essential for the core growth strategy, resources and attention can be focused on those that are.
“It got worse faster than we expected in September,” according to one CEO. “The first quarter did not look good, but we thought it was a trough, not a cliff so we delayed action and that resulted in worse losses. As a result, what the organization experienced in September was worse because we didn’t take strong enough medicine in Q1.” When the company did finally take action, the CEO was able to say that they did not believe they would need to do this again for at least two years. That important communication allowed the remaining, leaner team, to focus on customers rather than worry about making alternative plans for their own futures.
Start variations on your theme and innovation … if you weren’t already. This one is a little tricky because with a smaller team, focus will be more important than ever, and some of what needs to be cut, sold or discarded will likely be new things that just don’t appear to be panning out. However, it is the solution to a problem that all three organizations faced; ill-advised price competition. In this downturn, innovation helped to protect core product and service offerings which, in all three cases, were still the best among their peers.
As one CEO put it, “The way of life is changing in our industry and ’08 just forced a response … we need to be somewhere else in 10 years … maybe sooner.” By innovating during the crisis, they responded to competitive threats, protected the core and began moving toward the future where products and services will be different than today.
Another CEO, in a business that is already innovative, put it this way; “Free the horses … you probably can’t micro manage anymore anyway, so let them run free where they think they need to be.” By freeing the leadership team and the creative elements in the organization to pursue answers they believe in, you free yourself to assist in areas where you are both able to contribute effectively and needed by the team.
Watching the three leaders talk about their companies was, quite frankly, comforting. All of them had been through moments where they thought their organizations were at risk. I’m sure each one of them would say the experience was humbling. But just observing them you can also tell, they are stronger and better prepared for whatever the future may hold as a result of having worked through the challenges of 2008 and the following years.