Posts Tagged ‘complexity’
September 1, 2011
Globalization and rapidly changing technology continue to sweep the world. Organizations working across international and cultural boundaries face significant challenges as they seek to reach and maintain market leadership – however, inherent in those challenges are often unrealized opportunities. One such opportunity, Multicultural teams, offers a wealth of leverage to the discerning global leader. Our research repeatedly identifies the following advantages when multicultural teams are leveraged effectively:
- Global economies of scale and scope are realized
- Effective global learning & knowledge transfer takes place
- Global strategic capabilities are enhanced
- More innovative products and services are developed
- Better understanding of customers across multiple geographies is achieved
- Strong cultural intelligence fostering competitive advantage is accomplished
In today’s complex global marketplace, success depends on a company’s ability to work effectively across different geographical locations and cultures in order to drive innovation and capture market share. Leaders must go beyond motivating people from very different cultural backgrounds, experiences and leadership styles – they must create an environment that facilitates multicultural teams to collaborate effectively across boundaries and borders. There is simply no better better way to understand and strategically exploit the global marketplace.
The truth is that most organizations under-utilize their multicultural teams as strategic assets. When properly developed, such teams contribute significantly to the growth and success of the organization and to its bottom line. In fact, multicultural teams are one of the most consistent sources of competitive advantage for any organization who deploys them – they are effectively the bridge between the workplace and the marketplace.
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Posted in alignment, Communication, Cross-cultural, Culture, Development, Global, Global Culture Series, Global Leadership, Innovation, International, Leadership, Multicultural Teams, Multinational, Planning, Potential, Resources, Strategic Planning, Strategy, Team Building, Uncategorized, Value Creation | Tagged alignment, challenge, communication, complexity, global alignment, global business, Global Leadership, global organizations, Global teams, intercultural teams, Leadership, Potential, Strategic Planning, success, synergy, transformational management, winning results | Leave a Comment »
July 30, 2011
Both the ancient Romans and Greeks called all foreigners “Barbarians”. The North Africans call their mountain people “Berbers”, Arabic for Barbar. The Europeans, until the late 19th century, called everything in North Africa “Barbaria”. The word “barbarian” refers to the uncultured, or those with unrefined communication skills – both explicit and implicit. The way we express ourselves is predetermined by our differing cultures (even if we often do speak the same language). How we communicate ultimately determines how we are viewed as global leaders. Damaging miscommunications can (and do) happen frequently when working across cultures, but they can be avoided if we apply some cultural intelligence to our diverse interactions – in particular understanding the differences between high and low context communications and leveraging both for personal and organizational gain.
High Context cultures communicate meaning not only with words, but with voice tone, body language, facial expressions, eye contact, speech patterns, and the use of silence. Words play a relatively small part in the overall meaning of the communication, and the context conveys the bulk of the information. People in high-context cultures, such as Asia and South America, tend to take time getting to know one another, providing for an understanding of the broader context of a conversation. This results in a knowledge of what to expect, what signals to look for, and how to interpret subtle signs or expressions – fewer words need to be said.
Low Context cultures are expecting explicit communications. People want detailed background information before making a decision, however they are generally unaware of subtle nonverbal signals going on around them. Documents and contracts are not taken seriously unless written or signed – details must be provided. For example, in the United States and Germany (both low-context cultures), contracts with numerous explicit clauses are a normal way to conduct business and the written word is taken quite literally. In low-context cultures, expect detailed documentation – thorough job descriptions, detailed accounting, and lengthy business planning documents. The devil is in the detail.
When communications become challenging, it can be tempting to access your “barbarian-reflex”, especially when messaging becomes unclear. But, as you can imagine, it is completely ineffective to view your colleagues, staff, or even clients as “foreign” or “unrefined” simply because they do not communicate as you do. If you are motivated to communicate effectively on a global, multi-cultural level, you will need to invest in building trust – the more you come to know someone, the less you tend to look upon him or her as a “barbarian”.
If your purpose is to ensure your colleagues and staff reliably implement to your specifications across the globe, the strategy you choose will vary depending on the cultural orientations you are working across. In those high-context cultures, your strategy will need to be relationship and trust based and may not be explicit – more soft-skills based and time intensive. In low-context cultures the purpose of communication is to transfer information and your strategy will need to be explicit, efficient, and detailed in order to ensure the correct implementation. A sound strategic approach that is rooted in cultural orientation will be imperative to your overall success in the global organization.
As a global leader, everything you do conveys a message. Leveraging high-context and low-context cultures means relying on both implicit and explicit communication – carefully ensuring that what you say (low-context) is always mirrored by what you do (high-context). When there is alignment, you automatically build trust across all cultures and your strategic approach becomes less diverse by nature – your message becomes stronger, and you can more readily achieve your global organizational goals, exceeding everyone’s expectations.
For the next several weeks, I will continue to discuss specific cultural orientations that will facilitate successful communications and business results. You can contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website atwww.LuminosityGlobal.com. Check back next Thursday for the next installation in a multi-tiered discussion on understanding cultural orientations for successful communication Across Boundaries & Borders.
Posted in Cross-cultural, Culture, Global, Global Culture Series, Global Leadership, International, Leadership, Multicultural Teams, Team Building, Value Creation, Who's The Barbarian? | Tagged communication, complexity, Cultural Orientation, global business, Global Leadership, global organizations, intercultural teams, organizational insight, Potential, transformational management | Leave a Comment »
June 17, 2011
For those of you who have been following my blog from the very beginning, I will apologize in advance. Over the next several weeks I will be traveling extensively overseas for business and developing a new service offering for Luminosity Global, while also coordinating the cross-country relocation of my family. As a result, I have decided to repost a series I wrote very early on that many of you may not have seen – if you have seen these articles, I hope you will appreciate them just as much as you did a year and a half ago. I hope everyone is having a wonderful summer and enjoys the following series, Global Culture:
A great leader must be a great communicator. However, communication in a global context means communicating successfully across boundaries and borders. Cross-cultural communications are complex – often difficult and easily misinterpreted or misunderstood if not skillfully navigated. The ability to successfully connect across cultures can be facilitated, not by trying to understand the many nuances of every culture, but by understanding that there are basic orientations (or perspectives) that, if understood on a continuum basis, can foster the potential for leaders everywhere to leverage cross-cultural communications for a new energy boost to high performance in an increasingly complex global environment.
The truth is that there are very few leaders or companies on this planet that truly embrace cultural differences and leverage them for global success on a personal and organizational level – yet cross-cultural communications are an invaluable lever to global success. Those of you who are managing across countries and regions and who are willing to get the best out of the rich melting pot of cultures that you navigate, have the ability to build virtual bridges between cultures and geographic locations, creating thriving teams and organizations, that will enable you to become a Game Changer vs. a Game Player through effective global and interpersonal communications.
Integrating cultural orientations into your communications will allow you to unleash exponentially more human potential to achieve meaningful objectives – you will be better equipped to extend personal and organizational worldviews, bridge cultural gaps, and make communications relevant to a geographically dispersed workforce that will enable impossible futures across boundaries and borders.
There is no viable way around it – your cultural orientations impact the way you communicate. As you begin to have the ability to understand your own cultural orientations and communicate effectively across alternative orientations, you will begin to have the ability to leverage cultural differences constructively and for the benefit of all, communicating efficiently and effectively across your global organization. This capacity is of the highest importance for success in an interconnected and increasingly global marketplace.
In the highly competitive global markets in which we all reside, the aim is to achieve concrete impact and tangible results that are enabled through maximum performance across all regions. Challenging cultural assumptions and looking at yourself and your entire extended network (including customers) through a different cultural lens, and communicating back through that lens, will propel you beyond your previous limitations to discover creative solutions that are outside of your proverbial box – leveraging cross-cultural differences to achieve business results well beyond anyone’s expectations.
For the next few weeks, I will be discussing specific cultural orientations that will facilitate successful communications and business results.
Will you shift your paradigm for global success?
You can contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the beginning of a multi-tiered discussion on understanding cultural orientations for successful communication Across Boundaries & Borders.
Posted in Communication, Cross-cultural, Culture, Global, Global Culture Series, Global Leadership, Leadership, Shifting Paradigms For Global Success, Value Creation, Will You Shift Your Paradigm For Global Success? | Tagged communication, competitive advantage, complexity, global business, Global Leadership, Global teams, influence, Leadership, results, success, transformational management, winning results | 1 Comment »
May 12, 2011
Leadership Laceration is a common disorder found when people complain about the leadership that has been placed over them. This is not only harmful to the leader, but it can be fatal for the group. The symptoms can be difficult to detect and are often mistaken for benign interactions. Those without a strong immune system can easily become victims, often unable to differentiate antagonism from healthy criticism. This condition is highly contagious and anyone found to have the symptoms should be quarantined right away…
All kidding aside, those individuals who choose to verbally lacerate leadership can be a serious threat to organizational alignment and morale. Because neither employees nor organizations are immune to employees with the propensity to lacerate leadership, you will need to be aware of the signs, symptoms and impact of leadership laceration.
It is your job, as an organizational leader, to create an environment where brilliant people of all backgrounds, personality types, and work styles thrive. Companies where smart people with diverse backgrounds and work-styles can succeed have significant advantages over those that don’t. However, sometimes really smart employees develop agendas other than doing what is in the best interest of the company. Rather than identifying weaknesses, so they can be overcome, these employees look for faults in leadership to build their case. The smarter the employee, the more destructive this type of behavior can be. Don’t underestimate the fact that it takes a really smart person to seriously lacerate leadership – otherwise, nobody listens.
It can be very difficult to amend the behavior of these smart, but destructive, employees. Once an individual takes a public stance, the social pressure to be consistent is enormous. If he tells his closest colleagues that the CEO is an incompetent, reversing that position will cost him a great amount of credibility the next time he slashes away at the leadership team. Most people are not willing to take the credibility hit.
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Posted in Communication, Cross-cultural, Danger Series, Global Leadership, Leadership, Leadership Laceration, Resources, Strategy, Team Building | Tagged challenge, Change Management, communication, complexity, Global Leadership, Global teams, Leadership, organizational insight, Potential, transformational management | Leave a Comment »
March 22, 2011
It is inevitable – change creates drama in most organizations. However, you have a choice as to whether you deal with change effectively or let it spiral out of control - controlling you and creating unnecessary drama! Leaders need to be able to present a unified vision and convey support if they expect their people to embrace change. Indifference can lead to a rapid demise of the change effort. As a leader invoking change, make sure you provide:
- A vision for how the change will impact the individual, team, division and organization
- A firm commitment to change goals, while accepting input on the details
- Specific, achievable objectives along with plans for achieving them
- A roadmap for success with realistic timelines, budgets, and owners
- A communication framework to support change adoption
- Opportunities for people to give feedback during and after the change
Admittedly, organizational change is complex, but we often make it harder on ourselves than it has to be. Just as in the board game Clue, it is easy to engage in false assumptions that can lead our people down the path of suspicion and drama – away from the truth and the ultimate win. The result? A whole lot of ambiguous thinking regarding the application of structured, human-focused, change within the organization.
Here are just a few examples of how we can easily fall victim to false assumptions over our own realities:
People Resist Change: Actually, not always. People frequently seek out drastic changes in their lives and voluntarily embrace them. People do, however, resist being forced to change.
How change is presented and managed will impact its success or failure far more than the change itself. Most of us respond far better to change when we comprehend a valid reason for it – without solid justification, most people are likely to resist anyone who tries to force change upon them… and cause drama along the way.
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Posted in alignment, Change, Communication, Global Leadership, Leadership, Part 1, Potential, Save The Drama Series, Strategic Planning, Strategy, Team Building, Uncategorized, Value Creation | Tagged Change, Change Management, complexity, Execution, global alignment, Global Leadership, influence, Leadership, Potential, results, Strategic Planning, success, synergy, transformational management, Unity of Purpose, winning results | Leave a Comment »
March 5, 2011
You can bet that if you do not set and manage expectations, drama will invite itself in for an extended visit. When people do not know what is expected, they will create their own expectations – and they most likely will not align across the organization. Disagreements and controversy ensue, causing chaos and distraction from driving positive results. While setting and managing expectations may seem time consuming, the cost – in time, effort, and drama – of not doing so far exceeds that of being responsible and clearly letting people know what you expect of them.
Before you, as a leader, can hold people accountable for outcomes, you have to let them know what success looks like and what you expect to see as a result of their efforts. If everyone knows what is expected, the focus is on driving for results and monitoring against set standards. The benefit of setting and managing expectations is twofold:
- Clear, concise expectations drive actions and decisions.
- Explicit expectations are a primary driver of success.
If you fail to create an environment where expectations are well understood and respected by your people, you are highly unlikely to develop a high-performing organization… or deliver strong business results.
Expectations are like the rules in the board game Sorry! When everyone knows the “rules” or “expectations”, some may try and cheat (like my husband, who can’t stand to lose), but the other players will hold the cheater accountable. When no one knows the rules, it is impossible to be accountable, much less hold anyone else accountable to anything. Organizations are no different – if you want your players to know how to play to win and hold others accountable, you are responsible for setting and managing expectations.
When setting expectations, consider these four principles:
1. Clarity
Expectations should focus on outcomes, not activities. Leaders often make the mistake of attempting to direct the process that will be used, rather than focusing on the desired outcome. As a leader, you should be responsible for identifying the goal, while the employee (or the team) is then responsible for developing how to meet or exceed expectations.
2. Relevance
Relevance helps define the “why” of what is expected. If employees have complete understanding of the importance of what they are asked to deliver, they will be more committed to the result because they see how it fits into the big picture, as well as how their efforts impact the company.
3. Simplicity.
Simplicity creates a sense of grounding for both individuals and teams. If you identify what is expected in simple, straightforward terms, there is a clear understanding of exactly what is expected.
4. Consistency
After setting expectations, you must maintain a consistent approach to managing expectations that can be applied in most situations. This facilitates a sense of unity and equality, and will bolster morale across the organization.
Now, let’s consider three important components to managing expectations:
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Posted in alignment, Communication, Education, Global Leadership, Leadership, Managing Expectations, Multicultural Teams, Planning, Resources, Save The Drama Series, Strategic Planning, Strategy, Team Building, Value Creation | Tagged alignment, communication, complexity, global alignment, global business, Global Leadership, Global teams, influence, Leadership, organizational insight, Potential, Rapid Result Initiatives, results, Strategic Planning, success, synergy, Unity of Purpose, winning results | 1 Comment »
January 27, 2011
In an ever-changing global marketplace, those who lead across boundaries and borders are increasingly required to become Extreme Team Captains – guiding the organization through unfamiliar and turbulent environments, while maximizing the functional, geographical, and cultural diversity of their teams. In today’s multicultural, dynamic world, ensuring the continuous learning and growth of global leaders is critical to achieving high performance and sustainable growth in every organization.
With markets, suppliers, competitors, technology, and customers around the world constantly changing the rules of the game, traditional leadership models no longer work. Companies need leaders of exceptionally high caliber and quality, as they are a key component of the only true source of competitive advantage – people. But how do we create this Extreme Global LeaderTM? Is there the possibility of exceptional leadership that transcends accepted leadership characteristics to create a global leader that is emotionally, politically, and culturally intelligent? How do these high-potential leaders evolve and become extreme? What is the most effective method of creating a transformational leader?
Last week we pondered potential and its source. If we look at the critical components of what we perceive to be potential (performance, emotional intelligence, motivation, and agility), is it possible to leverage potential through traditional training and/or coaching? Both are valuable tools for learning, but have entirely different purposes and outcomes.
The purpose of training is to teach:
- skills
- methods
- theories
- tactics
- strategies
It is the process of disseminating information from the trainer to the leader. Training provides a pre-set curriculum and the trainer imparts what is important for the student to know. Trainers have subject matter expertise and an understanding of teaching methods that work well with adult learners. Training offers economies of scale so, even when customized, it is often less expensive than coaching for a comparable number of students. Because training is typically a one-time event with little to no reinforcement, the benefits may have a very short shelf life.
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Posted in Development, Education, Global, Global Leadership, Innovation, Leadership, Leveraged Learning, Planning, Potential, Potential Series, Strategic Planning, Strategy, Uncategorized, Value Creation | Tagged alignment, challenge, coaching, competitive advantage, complexity, Extreme Global Leader, Global Leadership, innovation, Leadership, Potential, results, Strategic Planning, success, transformational management | Leave a Comment »
December 3, 2010
Have you thought about the impact that you, as a leader, have in these toxic waters of economic downturn? Wise leaders are making the changes they need to make now so that they emerge better, stronger, and faster than ever – ready for the growth that will ultimately come. It is absolutely critical for those at the helm to be prepared to inspire and motivate those who remain onboard in order to emerge victorious. So what are some of the most important traits that a great Captain in this epic storm should embrace? Here are some reminders of what is important:
- Lead By Example: Your people watch everything you do and listen to every word you say – then wait to ensure both are in alignment. The best way to lead and motivate is to be a real example of the way you expect others to behave. Be completely honest and as transparent as possible. Level with people – tell them how you see the current environment, acknowledge the limits of your own understanding, and engage the discussion by asking them for their views. Why? 1) your honesty and humility will breed respect and 2) your openness demonstrates that you walk the talk and 3) it clearly illustrates how together you are more than the sum of the individual parts.
- Inspire Loyalty: The seas are rough, the water is toxic, and people fear being thrown overboard more than ever. It’s critical that they truly believe that you are on their side and supporting them. Create a vision that will make your teams see possibility and generate creative ideas. Inspire them to focus on the new priorities by doing so yourself – fearlessly. Engage decisions and projects that will produce incremental success so that people can visibly and viably see progress. Why? Because people need hope and they need to see progress – you can give them both and they will reward you with their loyalty. The more clear and vivid you can communicate a vision, the more your teams are bought into you and what may seem an impossible future - show them the finish line and they will put up the sails and catch the wind.
- Demonstrate A Real-Time Connection To Reality: Although today reality is a moving target, continuously monitoring the changing environment through ground-level intelligence can provide a realistic map to plot your way forward. Partnering to pool information across functions, or geographical boundaries, can provide useful insights and build camaraderie. As an added bonus, as you continue to gather information, the picture will change to reveal new opportunities or threats that can be proactively addressed. While the first order of a realistic assessment is to understand and accept the magnitude of the challenge, the fact is that there are few problems that can not be solved by engaged, active minds working together. Focus people on what is realistically possible, rather than what is not, and facilitate them searching for solutions that will move the organization forward. As a leader, it is your responsibility to drive positive performance by transforming fear into action.
- Manage With Intensity - Embrace Empowerment: Always remember to balance intensity with empowerment. Provide the training, resources and support your people need to do their jobs, but don’t micro-manage. It shows you don’t have faith in your people and demonstrates explicitly that you do not trust them. Tipping the scales back the other way, in difficult times your hands-on participation is essential. As you support people in doing their jobs, openly share and discuss information and ideas, and consistently act with the speed and intensity required in a volatile environment. You need to be intensely interactive - listening, explaining, answering questions, pushing conversations to higher levels – and then doing it all again. People will be inspired by your intensity and involvement – not to mention seeing firsthand how you put reality on deck and engage them in a plan to address it decisively, as a team.
Facing the reality of surviving the current storm, while preparing for the long term effects of the toxicity, requires a leader to constantly adjust – “X” no longer marks the spot. Those leaders who look ahead, anticipate what’s coming, and act decisively to adjust to an ever-changing reality will survive. Those leaders who lead by example, inspire loyalty, engage their teams, demonstrate a real-time connection to reality, and manage with intensity while embracing empowerment will not only survive the toxic waters – they will thrive in the new reality.
Please engage the discussion and let us know what traits you rely on to motivate and incite every person to think through and act on sustaining the organization. Please feel free to contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.
Posted in Communication, Global Leadership, Into The Deep Series, Leadership, Leadership Traits For Toxic Waters, Potential, Team Building | Tagged challenge, communication, complexity, global business, Global Leadership, global organizations, Global teams, Leadership, Potential, Unity of Purpose | 5 Comments »
November 24, 2010
As a leader in Sales, you are well aware that the waters are rough, indeed. In the past, the goal has been very straight forward – make sure your teams are capturing customers and making their numbers. Good relationships and ongoing offers of discounted pricing – on products and services – kept sales flowing and ensured the all important numbers were on target. Unfortunately, those days of smooth sailing are gone. Adjusting to the new reality means acknowledging that things have changed – customers have disappeared or have greatly reduced purchasing power and costs do matter – even in Sales.
Here’s a life boat with some less well-known tips that may help Sales to survive, when others around you may be sinking fast:
- Critically evaluate structure, purpose, objectives, and KPI’s: In many cases, all of these components may need to change. Perhaps it is wise to reorganize – combining functions, regions, or customer segments? The initial changes may be dispiriting, but if you can make them all at once and they are focused on those who do not display the attitude or aptitude required in the “new” organization, Sales will become stronger as a result of the changes. The goal is not only to reduce costs, but also to get everyone focused on what they need to do for the customer and against the competition. Make sure you understand what the new purpose, objectives, and KPI’s encompass at each revised level, and that the necessary training is provided to ensure buy-in and commitment to the new organization.
- Create an intelligent network: Build information networks that span the clients organization, continually assessing customer pain points and providing solutions before they even realize they are challenged. As a leader in Sales, ensure you are transitioning your sales people into the eyes and ears of the organization – a network that provides ground-level intelligence that can be used to fuel fundamental decisions regarding overall corporate strategy and tactics. This new, evolved sales person will need to have the capacity to analyze each client to determine current and future profitability. They need to be able to tell you how decisions are made at the client site, what the dominant psychology is, and how that psychology is manifested as it pertains to client decision-making, forecasts, purchasing, promotions, and product lifecycles. They all affect your ability to sell… and collect.
- Know what your customers cost: Have a detailed understanding as to how each client affects each piece of the value chain. A good customer on the surface may cause you to incur hidden costs if they demand frequent changes, customized processes, or unusual services/materials. These types demands may put undue pressures or costs onto production or purchasing departments…or they may tie up too much cash by requiring unique materials or components. An important customer that pays late can also become a liability when the seas are rough and the company is managing for cash. When a client’s ability to pay or credit rating drops, you don’t want to be the last one standing on deck when the Tsunami hits…
- Know which customers to drop: Sales people need to be able to help the company answer some critical questions – Is a customer viable? What strains are they under? Are they highly leveraged? What does their cash flow look like? What is the real cost of doing business with the client? Obviously the decision to drop a client needs to be made in conjunction with the executive team, however you need to have done your homework in order to make a sound recommendation. If the business case points to the client as a significant risk and they must be dropped, ensure your sales people partner with the client to ensure a smooth transition to a new supplier. Remember, if the client has a positive experience there will be a mutual respect and the potential of working together in the future will remain intact… should the opportunity arise.
- Link Sales to R&D: Assign your most aggressive and business-savvy people to a dual role – sales and business development. Creating cost-effective solutions to client challenges often emerge from discussions amongst people with different knowledge bases.
- Tie sales people to CXO’s: The best intelligence is useless unless it is put into the right hands. Set up methods to ensure what is learned in the field gets to the senior team. Set up weekly conference calls between your best sales people and critical decision makers… or initiate a program where the executive team will call a few of your sales people each week. Top executives will have the opportunity to pick up ideas or nuances from your sales people that they would not get from a formal meeting or a report – it will allow them to discern customer patterns, while motivating those participating on the calls to become more curious and vigilant.
In turbulent times, the context of Sales changes drastically. With orders dissipating and numbers falling out of control, the wise leader ensures sales is a critical component to the solution, rather than part of the problem. With the right focus and planning, your organization can steer the lifeboat out of rough seas and become better, faster and stronger in the process.
Please engage the discussion and let us know how you keep sales afloat in rough seas. Please feel free to contact me at Sheri.Mackey@LuminosityGlobal.comor by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.
Posted in Communication, Development, Global Leadership, Into The Deep, Leadership, Planning, Resources, Sales, Sales Survival, Strategic Planning, Strategy, Value Creation | Tagged competitive advantage, complexity, innovation, Lead Creatively, Leadership, Potential, Sales, Strategic Planning, transformational management, Unity of Purpose | Leave a Comment »
November 18, 2010
Do you fully understand the impact the financial crisis has on your company, your division, your teams…your people? How do you make a conscious effort to sustain your company through the crisis?How often do you lead by financial measures other than budget? The reality of the situation is this – if you are a leader in any capacity, you should be thinking about how the global financial crisis is affecting your domain and what you are going to do to contribute to your own sustainability.
The responsibility to keep the organization (and your livelihood) afloat is not for the CEO and CFO alone. While they are the structural and functional center in the midst of the contracting economic environment, every single leader has an important role to play. From Customer Service to the Board of Directors, everyone should be actively contributing to the future of the company – in good times and bad. We typically don’t think that way, however, it is critical to understand how the efforts of each and every function must align and coordinate in such a way that the entire fleet is headed in one direction. If we are to emerge from this crisis better, faster, and stronger…we had better begin to navigate our way more effectively in these turbulent economic seas.
This week, let’s consider a few high level thoughts for keeping your Operations afloat in rough seas:
1) Command Your Crew. People are essentially the engine of production in service and manufacturing and the principle of managing for cash flow remains at the forefront of what you, as the Captain, need to command. People are the key to your success, and one critical aspect pertains to how you are leveraging your resources. Obviously an idle staff is an unproductive staff – constantly re-evaluate and staff operations in line with the operational needs. In addition, remember that your crew is made up of humans and times are tough – ensure your people feel they are treated equitably while also ensuring rewards and recognition are available for those who go above and beyond – they don’t have to be cash related…
2) Lower your cash breakeven point ahead of falling revenues – fast. How will you consolidate production and how will your choices affect cash flow and other priorities? Will a software investment make your system more responsive and efficient? Is subcontracting a part of the process an option to better managing costs? Whatever you decide, know and understand that any decision you make may have far reaching consequences on the entire system – make sure you consider the full impact of any changes and get input from all affected parties.
3) Rethink your capital investments. As you continue your quest for cash, it may seem obvious to postpone or cancel capital expenditures. This should be evaluated carefully…remember that depreciation alone will allow you some expenditures without any real cost. While it may be tempting to abandon ship on spending, always keep in mind that what you delay today, may cost you more tomorrow…stringently evaluate every expenditure, carefully weighing both benefits and costs equally. Projects with high strategic value shouldn’t be delayed. Most competitors choose cost savings over strategic investments when they come upon turbulent waters – if you choose investments wisely, the winds will be with you as we emerge from the storm of economic crisis. Knowing where to spend and where to cut is a skill that will test your aptitude for navigation, not only as the Captain of your ship, but also in regards to your capacity to rule the seas in an ocean full of pirates – once the seas have calmed.
4) Manage your product lines. Be merciless in evaluating which product lines with their multitude of versions and extensions should walk the plank. The unnecessary complexity of multiple, complex product lines could sink your ship – weighing it down with additional cash expenditures that will not allow your vessel to stay afloat. Remember the 5:50 rule: 5% of your inventory will derive 50% of your revenue.
5) Consider Outsourcing – and Insourcing. Lighten your load wherever possible – you will be more flexible to navigate in rough seas. Carefully review operations, focusing on what differentiates you from the competition – that is your bottom-line value. Everything else should be considered fair-game for outsourcing – especially those aspects of the business that may create economies of scale that are not possible in-house. A viable alternative may be insourcing – keeping redundant employees onboard to reduce or eliminate the current cost of outsourcing. It may be advantageous to drop anchor on outside contractors and let your existing crew take up the load. Weigh your options carefully, and evaluate the impact on your overall cash flow to see where you come out ahead…
6) Manage Inventory. It is critically important that you are aware of the financial implications that inventory brings – both raw materials and finished products are cash traps. Tie yourself tightly to sales and marketing to ensure that cash remains the focus at all times and base your manufacturing processes on just-in-time, produce-on-demand, or some variance of these practices to ensure that all aspects of inventory at maintained at minimal levels.
Whether you are in a manufacturing, retail, or a service environment the above points will apply – what will change is the lens from which you are viewing them. Just the same, they should all be considered and evaluated as to how they can be applied on your ship – otherwise, you may find yourself thrown overboard in stormy, shark infested seas, treading water and hoping for a rescue that may not arrive in time.
Please engage the discussion and let us know how you keep operations afloat in rough seas. Please feel free to contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.
Posted in alignment, Cash Management, Financial, Global, Into The Deep Series, Leadership, Lighten The Load, Lighten The Load, Planning, Strategy, Value Creation | Tagged alignment, Cash Management, challenge, competitive advantage, complexity, Execution, Financial, Global Leadership, Potential, results, Strategic Planning | 1 Comment »
