Leading in Challenging Times ....

A big dilemma in challenging times is where to put the locus of control: in the centre or at the unit level? In "normal" times this is also a choice but in economically challenging times the strategic considerations are different. Putting the locus of control at the centre may force more aggressive cost cutting. In some circumstances short-term fiat is the most desirable lever for change available to senior executives. Leadership from the centre with close involvement of units on key areas for improvement may lead to more sustainable efficiencies. On the other hand, in recessions different markets enter and emerge from the recession at different speeds. So if units or geographies are dispersed then central management of costs may overshoot control one way or the other. Perhaps, an alternative organisational strategy needs to be put in place. This would be to devolve as much of the P/L to the smallest possible unit and cut coordination (aka headquarter) costs. This model was once quite popular ... It has a critical downside in that after a while it is hard to obtain significant revenue growth unless the unit is in a truly spectacular market or is fantastically innovative. In better times, revenue growth comes at the edges between units. In hard times, just focusing accountability for P/L to smaller units make cost adjustments possible in turbulent markets.

Leading in Challenging Times

Current times remind me of a metaphor I have not used for about 15 years. Leading is like captaining a ship or if you lead multiple units a fleet of ships. In challenging times like today we need to see our ships as manoeuvring through narrow and quite dangerous straits. Our attention has to be on looking only a small distance ahead and getting through, avoiding among other things perilous rocks. Certainly, we can dream about where we are eventually going but our focus is very definitely short-term. When the ship or your fleet starts to emerge into wider waters you can once again plot a course, set direction that is expansive and take advantage of the environment you are in. You know that the open seas are not peril free but you have a wider range of options.

If you are leading a fleet of ships (multiple units) you need to be aware where they are. Are they still in the narrow and dangerous straits or have some emerged to the open seas? Management of multiple units in these times needs to be highly attuned to where the units are. Blanket policies that imply that either everyone is in the same condition rarely work as different markets enter and emerge from recessions at different speeds.

Obama's first 100 days

This article is worth checking out ... good advice for any senior leader?

http://www.businessweek.com/managing/content/nov2008/ca2008114_443986.ht
m?chan=top+news_top+news+index+-+temp_managing

Leadership Crisis?

Is there a real need for new Executive Development programmes?

I was surprised to see 2 of my former colleagues at Hay Group challenge a key proposition driving that firm's executive development marketing that the changes in demographics will cause the developing world to run short of leaders and create a crisis:

http://www.talentmgt.com/recruitment_retention/2008/May/630/index.php

They assert that firms will adapt and develop different methods of pathing to fill essential roles.

This is over-optimistic. The fact is that executive and senior management positions will be filled by people much earlier in age ... with less experience. There is nothing inherently wrong in this but this will require radically different approaches to develop leaders and ensure they are exposed to a range of contexts much earlier in their career. I'm not encouraged that today leading organisations are embracing ways to cause real acceleration.

Let me know which approaches you see that look promising for accelerating executive talent. Or am I worrying unnecessarily?