Don’t let a good recession go to waste

Volume 9 Letter 7

Ford Motor Company along with all the other auto makers is losing money. Weathering the current economic storm by buttoning down the hatches and waiting for the worst to pass is tempting but foolhardy. Short term fixes of across the board cuts and restructuring plans give the illusion of “taking action” but the fact remains “that taking a defensive position can, at best, only limit losses – eventually we need gains” 1. A formidable leader, Alan Mulally took on this challenge at Ford and in the midst of recession has developed a strategy that he promises will bring the company to profitability by 2011.

Like all business leaders Mulally faces two competing demands – first to execute the existing plan to keep today’s business operating and secondly to figure out how to adapt to build and grow in the future. In response to these demands Mulally has built a strong strategy to bring Ford back to the forefront of the automotive industry and then to guide Ford’s efforts in executing and adapting the strategy as the future unfolds.

In good times poor leaders can hide but in challenging economic times they sink like stones. Strategy without leadership and leadership without strategy both end in failure. J Zenger and J Folkman studied leaders at Fortune 500 companies and teased out the common characteristics of good leaders. Here is what they came up with:

Ten Characteristics of a leader:

  1. Energy and enthusiasm: that they “breath energy into a room” is an apt description. They volunteer for everything and never fear being overwhelmed.
  2. Eschew mediocrity: know how tough it is but always find a way to reach their goals.
  3. Strong vision and well communicated direction: believe their job is to execute after the vision is set. Being busy is not considered being effective.
  4. Good judgment: taking decisions that are in the company’s best interests not their own.
  5. Collaborate: Share and coordinate with other leaders – see other leaders as a resource not as competitors.
  6. Set high standards and abide by them: both for themselves and their company or team.
  7. Embrace change: evaluate all ideas objectively, fairly and with transparency so all can see why the idea was accepted or rejected.
  8. Learn from mistakes: Use setbacks as opportunities to learn – never hide errors and brood about them.
  9. Excel at interpersonal skills: Warm, collaborative personalities known to praise associates – ‘unavailable’ is not in their vocabulary.
  10. Develop others: focus on developing subordinates causing individuals and teams to engage.

 

Perhaps most troubling about the list above is that poor leaders, those who were fired or judged to be the worst of the worst by their peers, ranked themselves as much stronger in the categories above than their peers and subordinates actually ranked them. Take a good look at yourself (perhaps get feedback from your peers) and work on these ten areas of leadership. Follow Mulally’s example and don’t waste a good recession to develop your leadership skills.

1. Quote from Peter Drucker

2. For the full story on Ford see: Forbes May 25, 2009 Fixing Up Ford, Alex Taylor III P44 – 51

3. More information on the Ten Characteristics of a Leader see “Ten Flaws that Derail Leaders” by Jack Zenger and Joseph Folkman HBR June 2009 P 18

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