Thursday, November 20, 2008

Change Leadership in Times of Crisis

In October, I had started to reflect on what needs to be done in times of crisis from a change management perspective (Don't Hit the Iceberg). Recently, I did some research in the blogosphere on what other authorities recommed as a rational behaviour for corporations.

John Rosen reflects from a marketing perspective what needs to be done:

Step One: Be absolutely clear about your strategic objectives. Slowdowns are exactly the time when the entire organization should have no question about the overriding strategic objectives. Tradeoffs will have to be made – between, for example, pursuing share growth or maintaining profit margins. Management must be both clear and fully in alignment on the strategic imperatives in four areas:

- Financial Measures
- Maintaining Relationships
- Maintaining Product, Service Viability
- Competitive Attack

Step Two: Be sure you understand your brand, its ability to carry a price premium, and the competitive situation it faces.

Step 3: Re-evaluate and adjust your marketing.

John is providing quite a comprehensive and valuable list of Do's and Don'ts (for example, Do identify new customer segments, or Do invest in brand building). However, this list is fine I feel that his suggestions are the sort of actions that fall into what has been discribed by Peter Senge and others as a more-of-the-same-pattern.

See, I don't underestimate the value of strategic repositioning of the brand. From the perspective of a marketeer, the Servant of Chaos Blog, citing Craig Wilson, suggests that

we may well be at a turning point for both the types of marketing that we do and the agencies that we use to plan, create and execute. In this great, and far reaching post, Craig outlines the state of affairs, the issues at play and makes some suggestions for where we might be heading. Social media may well be rising at
the perfect time. As consumers grow increasingly weary of broadcast advertising, and have more control than ever over the media and content they wish to consume, social media offers a subtle new direction for marketers to build relationships and brand.

What this blogger explains about external communication is applicable for internal communication as well. As I have outlined before, I believe that the real issue now is to realign staff around a common purpose and to change the patterns of conversation in the company. This applies to marketing as well as to other strategic issues. It is dangerous if the staff of a corporation looses their faith in their company's fitness and the meaning of their brand(s). So, do we need a radical new strategy to approach crisis? I think, yes. Reflecting on that, my colleague Bernd Weber writes me in a personal mail:

Crisis of the type we see now means DRASTIC CHANGE to be managed within the company that are a result of a rapid system-environment change for worse. So management has to cut down costs and get leaner and leaner; they have to react by rapidly building new urgent task teams. They have to become faster han before AND they have to find even more creative solutions, again: learning effective and efficient teamwork that holds the complexity as long as possible (alap instead of asap reduction of complexity) might help. They have to take decisions under a much higher level of insecurity and intransparency with regard to cause-effect than normally.

It sounds like a paradox - while most people might believe this is the time for speeding up all kind of activities and fall into an extremely reactive behaviour, this might be the time for slowing down, taking a break and starting to talk to the teams in your organization, asking them questions like

- What do we know?
- How do we know that we know?
- Do we share the same understanding of what is happening around us?
- How do we evaluate the company's strategies to navigate through the crisis in terms of information policy, creation of ownership, priorities and robustness?
- Where can we reduce complexity, where do we need to embrace complexity and uncertainty?

Here, new social media can play a decisive role. Given the overarching need to cut costs, such a dialogue can indeed be intiated with the help of Intranet forums, wikis, external and internal company blogs, complemented by focused fac2face meetings. Radical honesty and transparency is the ultimate prerequisite for such a process to be inclusive to deal with the strong emotions that increase in times of crisis. We call this attitude Change Leadership in Times of Crisis.

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