Basic Business Cents
Leadership Opportunities in Time of Crisis
Parts 1 and 2
by Lou Schultz, SCORE counselor
Original publish date 02/10/2009 (#1, 2)
Every leader should be able to answer the question, "What are you doing to make your organization stronger coming out of the crisis?"
It is true we are in a period of economic crisis. Fear and paranoia have set in because of layoffs, lower revenue, over capacity, and financial institution problems. One thing leads to another and we find ourselves in a downward spiral. However, we are not alone; it is a worldwide problem. Unemployment is twice that of the United States in some countries like China. How we act now will determine our relative standing when the crisis abates.
We are being asked to do more with less. Is that all bad? The work still has to be done and perhaps hiring has been frozen or we have had layoffs, so how do we do it? We either take shortcuts, which might result in poorer quality, or we find better ways to do the work while maintaining high quality. Obviously, if we take shortcuts, we will get into further trouble. So the question is, how do we continue to do quality work in a simpler way?
All work, whether it is in manufacturing, service, non-profit, or in our home is made up of a series of processes that we do in a repetitive way. Each process contains a series of steps. Let me give you examples of processes that have been improved.
An automobile manufacturer was observed unloading pallets of new transmissions and storing them outside the production building. When asked what happened to the transmissions next, the tour director said they were moved inside the building and run through a sandblasting machine to remove the rust accumulated while sitting outside the building. The next question asked was what would happen if the sand blasting equipment was removed from the building and the answer was, "I guess we would have room to store the transmissions inside the building." The interesting thing about this story is the company executives walked past those transmissions every day from their parking lot but never noticed them because they were accustomed to seeing them in that spot. That was the way it had always been done. Could you be guilty of perpetuating bad processes in your organizations just because that is the way they have always been done?
Another true story is an electronics company had complaints from divisions that it took too long to get approval to purchase capital equipment. When the steps were written down, it showed 21 approvals were required. By fiat, it was immediately reduced to 5, still not optimum but much better. After more study it was reduced further.
Is process simplification/improvement only for large business? Hardly. One homeowner wanted to simplify processes in the home upon retirement. Their washer and dryer were in the basement. By removing a bathtub from the master bath, they had room for a corner shower and a stackable washer/dryer. They then acquired a three-section hamper resulting in automatically sorting the laundry. Eliminating the laundry sorting process may not seem like much but added to the other improvements made, an easier laundry method was achieved.
Again, all work is a series of processes and if we simply write down all the steps in the process, the work staring back at us from the paper will invariably reveal ways to simplify and improve. Reduction of waste, rework, redundancy, and overhead will help us continue to produce high quality products/service with less work is indeed and opportunity.
Another opportunity is to reexamine our strategic thinking. What is our vision of what our organizations will be like coming out of the crisis or some number of years down the road? A professor from Harvard used to carry a large rubber band to emphasize his point. Stretching the band, he would say his hand on the lower left represented current state and the hand on the upper right represented the desired state. If we focus on the vision of the desired state, the tension in the system would help pull us up to reach our objective but if we focus on where we are today, the tension in the system will pull us down to where we stay fixed where we are today. We need to be positive, look for opportunities to help us reach our vision, and stay focused on our desired state. Other actions to take to help with our strategic thinking are to take a self-assessment of where we really are today and discover opportunities to improve. Some questions that might be asked are:
- What will conditions be like in your organization when the vision is reached?
- What do you do best?
- What part of your organization would your competitors most like to emulate?
- What parts of your organization do you most fear to lose?
- Where are you weak in the eyes of your customers?
- Where are you vulnerable in the eyes of your competitors?
- What are the 3-4 things that your organization must do well to succeed today and in the future?
- How do you measure those 3-4 things?
- What would be the ideal number to reach on that measurement?
- Where are you now on those 3-4 things?
- What is stopping you from reaching the ideal numbers?
Recognizing that the present economic crisis presents opportunities to fine-tune our organization to come out of the crisis in a stronger position by improving our work processes and strategic thinking, we are providing leadership demanded by the times. Dr. Noriaki Kano, Professor Emeritus of the Science University of Tokyo, has stated, "There are two kinds of motivation, crisis and leadership. Of the two, leadership is preferred." We now have the opportunity for both.