In this economic environment and observing what is going on in the world around us, we might question our own attitude these days. Can we continue to remain optimistic or is the environment chipping away at our very soul and belief system? Leaders are not immune to this milieu; we are like everyone else who works for us. We have emotions and feelings and sometimes it is difficult to stay the course when we have many distractions in our periphery.
I interact with many young businesses that are finding it difficult to get funding for their “brilliant” ideas. It is disappointing to observe these ideas languishing, realizing their commercialization may never see the light of day. My counsel to these entrepreneurs is to push your business towards generating cash flows and if the financial markets open up, you will be better off for it. Building a business in anticipation of getting funding is a high-risk strategy in these financial markets. It just won’t happen. If it does, it is more luck than anything else. My motto is 80% of the progress is made with 20% of the resources. If you can figure out which 20% it will be, then you will have made a giant leap forward in surviving—and possibly thriving.
Attitude enters into the picture when you adjust your mental picture with regard to the state or facts of the situation. This action is the prerequisite for survival these days. As leaders, we cannot turn our backs on the environment and then point fingers as to why it is adversely impacting our business. We must shift our attitude, design a strategy that starts with survival, and drive through these circumstances.
One of the hardest jobs for any senior leader is to resize the business given the current economic environment. Unfortunately, this intersects with the values of having responsibility for employees. Downsizing is hard work emotionally, yet it needs to get carried out.
On one occasion, I was working with a company that had to make these difficult downsizing choices. The company took the attitude that it is better to have jobs for some of the people rather than no jobs for all of the people. It was important to cut back the burn rate and most of the burn was fueled by labor costs. It was the sign of the times; yet, it was still a tough action.
As a leader in these situations, one of our jobs is to convince our followers that we have the business squarely in our focus and that their interests are being looked after as well—as part of the business’ success potential. If not handled well, employee relations can cause a business rift that is tough to close.
Larger entities, which traditionally find economic turmoil easier to handle, must make adjustments as well. This is the time to streamline your operations and jettison those marginal performers. Smart companies are quietly investing in their future, preparing for when the recovery begins. They know the current situation will pass, but they must deal with the present environment, while preparing for the future.
For those readers who can remember back to the early 1970s, the US stock market, as measured by the Dow Jones Industrial index, declined from ~1020 to ~ 600 between December 1972 and September 1974. Lines for buying gasoline were blocks long and there was great concern whether we might have another depression. When you were in the center of these times, it was difficult to stay positive about the future, especially if your “present” was so taxing. Eventually, the economy and market recovered and prosperity was renewed.
As leaders, we need to be realistic about the current environment but we also must develop an attitude of optimism for the future—the future of our nation, the future of our businesses and, of course, our own future and the future of those for whom we have some responsibility. “A” is for attitude.
Now ask yourself… “Am I a Leader?”