Leadership In Turbulent Times
Strategies for Surviving an Economic Downturn
Russ Moen, SPHR, CTS, CPC, CSP
Vice President, Human Resources
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Discussion Points
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Signs and symptoms of hard times
Recognizing our legal roles and accountabilities
The key to gaining market share
Drivers of high performance work systems
Critical leadership concepts and behaviors
Signs and Symptoms
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Increased bankruptcies
Increased crime rate
Declining stock market
Layoffs and restructuring
Declining market share and margins
Increasing inventories
Dispirited work environment
Increase in PTO and leaves, medical claims,
workers’ comp claims, and discrimination
charges/litigation
The Immediate Challenge
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Act quickly and decisively
Recognize your legal roles and accountabilities
Know the key to gaining market share
Understand the drivers of high performance
work systems
• Be aware of critical leadership concepts and
behaviors
Management’s New Focus
1. Must narrow your focus and concentrate on
the core of the business while preserving the
assets you can’t afford to lose
2. The necessity for cost reduction and liquidity,
to refocus and reshape the organization, shifts
you into an offensive posture
3. Must have the granular knowledge of the
outside world as well as your own division
Management’s New Focus
4. Annual performance targets must be reset to a
more frequent basis - Extreme volatility
shortens the lifespan of a business model and
strategy
5. Budgets must also be compressed in time
Recognizing Our Legal Roles
and Accountabilities
The Law of Agency
Understand the Consequences
Legal Roles & Accountabilities
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Agent as defined by Black’s Law
Dictionary:
– A person authorized by another (principal) to
act for or in place of him; one intrusted with
another’s business
– One who undertakes to transact some
business, or to manage some affair, for
another, by the authority and on account of
the latter, and to render an account of it
Respondent Superior
“Let the Master Answer”
This doctrine means that a master
is liable in certain cases for the
wrongful acts of his servant or
agent.
Today’s Hotspot Realities
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Termination and lay-off decisions
Pay and promotion decisions
Wage and hour issues
Retaliation incidents
Decisions affecting sick, injured, and disabled
employees
Current Federal Activity Level
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Due to the economic meltdown, private and
EEOC charges are increasing
The EEOC remains under a tight budget, but
its enforcement efforts are undergoing a
dramatic transformation
500 cases per day now being filed nationwide
The Key to Gaining
Market Share
Develop a Customer-Centric
Strategy
• Basic Concept:
– Learn everything about your customer:
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Facts
Impressions
Competitors
Approximate market share
Develop a Customer-Centric
Strategy
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Culture
Values
Decision making process
Goals (both short- and long-term)
Competitor information
Create a Value Proposition
• Describe and shape the customer’s needs into a
unique offering
• Separate traditional selling from the valuecreation approach
• Focus on the customer’s total business
• Draw out the best thinkers from your company to
create solutions and benefits for the customer
Create a Value Proposition
Transactional Selling:
• Salesperson assumes responsibility for actual
performance of products or services
Value Proposition Approach:
• Salesperson assumes responsibility for the
customer’s business outcome
Create a Value Proposition
Total Cost of Ownership (TCO)
vs.
Total Value of Ownership (TVO)
High Performance Work Systems
Key Drivers
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Culture
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Strategy
Competitive Advantage
• Virtually every leading firm has developed a
distinctive culture identifiable by its
employees
• Simply stated: Successful companies have
developed something special that supersedes
corporate strategy, market presence, and
technological advantages
Strategy is:
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A plan that aims to give the firm a competitive
advantage over rivals through differentiation
About understanding what you do, what you
want to become, and focusing on how you plan
to get there
Also, what you don’t do, in effect, draws
boundaries around the scope of the firm’s
intentions
Critical Leadership
Concepts and Behaviors
Critical Leadership Concepts
Traditional Industrial Age model based on:
1. Power
2. Position
3. Title
4. Theory X - Douglas McGregor
5. Lack of trust in employees
Critical Leadership Concepts
Results:
1. Multiple layers of management
2. Significantly greater payroll costs
3. Standardization of routine work tasks
4. Unlimited job classifications and work
restrictions
5. Reluctance to take risks and innovate
Critical Leadership Concepts
Six essential leadership traits for hard
times:
1. Honesty and credibility
2. Ability to inspire a shared vision and trust
3. Ensure an accurate assessment of moving
variables
4. Optimistic realism
5. Lead with passion and intensity
6. Model the way with confidence
Suggested Reading
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Beatty, Richard W., Becker, Brian E., Huselid, Mark A., The
Differentiated Workforce: Transforming Talent into Strategic
Impact, Boston, MA, Harvard Business School Press, 2009
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Beatty, Richard W., Becker, Brian E., Huselid, Mark A., The
Workforce Scorecard: Managing Human Capital to Execute
Strategy, Boston, MA, Harvard Business School Press, 2005
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Block, Peter, Stewardship: Choosing Service Over Self-Interest,
San Francisco, Berrett-Koehler Publishers, 1996
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Charan, Ram, Leadership in the Era of Economic Uncertainty
New York, McGraw Hill, 2009
Suggested Reading
• Charan, Ram, What the Customer Wants You to Know, New York,
The Penguin Group 2007
• Pfeffer, Jeffrey, The Human Equation, Boston, MA, Harvard
Business School Press
• Stewart, Thomas A., Intellectual Capital: The New Wealth of
Organizations, New York, 1999
• Stewart, Thomas A., The Wealth of Knowledge: Intellectual Capital
and the Twenty-First Century Organization, New York, Doubleday
2001
What Have We Learned?
Questions?
Reserve the date for our next
webinar!
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