January 15, 2009
NRF: Leadership in Tough Times
By Tom Ryan
Instill confidence. Set
a plan. Remain flexible. Openly communicate with employees. Stick to your
roots. Have fun.
Those were some of strategies
for how executives should manage in tough times gleaned from a session
Wednesday at the NRF convention entitled “Inspirational Leadership:
What Differentiates Great Companies and Why.”
“None of us have
really been through anything as severe as we’re facing today and it requires
all of us to pull up every leadership trait that we have to show our team,” said
Burt Tansky, president and CEO of The Neiman Marcus Group.
“There’s no question that we have to hone in on the issues. We have
to remain positive. We have to stay focused and keep the team focused on
the issues at hand. We have to continue our own personal demeanor. We have
to stay calm, don’t panic, and we have to show that we can find a way through
this patch that we’re gong through.”
Companies also need to
be especially agile to be able to make quick decisions. Finally, he stressed
that brands shouldn’t deviate from their core positioning. Said Mr. Tansky, “That’s
paramount. You cannot change who you are and these events are not a signal
to change.”
Roger
Farah, president and COO of Polo Ralph
Lauren Corp., said forward planning was essential. In particular, he
said Polo is exploring “proactively what can we do to advance the
business to not only to do the best we can do in this environment but
see how can we come out the back end a better company.”
While some new skill-sets
might be required in a new climate, Mr. Farah also stressed the importance
of “over-communication” to existing staff, particularly explaining
any shifts in focus and setting timetables to reach those new targets.
Companies should also be ready to make adjustments.
“I don’t think it
fundamentally changes your strategy,” said Mr. Farah of any adjustments. “It
just reorients what’s on top and what’s in second place and if you communicate
that clearly throughout the organization – whether it’s to the board, senior
management or the mail room – you can move an organization to take action
based on the environment we’re in.”
Kip Tindell, chairman
and CEO, The Container Store, also stressed the importance of maintaining
a positive attitude, including incorporating some fun in the workplace
to make sure “employees enjoy coming to work.” He likewise stressed
the urgency of good communications.
“To have people
approaching the challenge of this economy together and knowing that they
know everything the board room knows is magical at times like this,” said
Mr. Tindell. “[Our company] is just fortunate to be minus that sort
of paranoia that goes with employees who don’t feel they know what’s going
on.”
While it’s critical to
be flexible in strategy, Mr. Tindell also said it’s important that companies
don’t forget their roots.
“Many retailers
are focusing more on price perception but that shouldn’t come at the expense
of quality, service and selection,” said Mr. Tindell.
“Quality, service and selection are not terribly profitable today, but
they will be again.”
Discussion Question:
What leadership skills are required in tough times? Do you agree with
the assessments of the retail execs around leadership at the session?
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Three lessons we are following:
1. Clarity of message.
2. Honesty with no secrets.
3. Communication – two way.
Sure these are practiced every day in good-to-great companies like ours. But, in today’s tough and uncertain climate, they need to be emphasized even more!
The one huge differentiator not mentioned in this piece (along with ‘stick to your roots’, ‘have fun’, etc.) is BELIEF. Our belief determines which of all the infinite possibilities available to us we choose to make reality. Want to know what beliefs are operational in the organization? Look at the results and circumstances. Sometimes this is not a very popular insight.
Here’s another insight that often does not go over well. 95% of all the problems and issues organizations wrestle with are self-inflicted wounds. This entire downturn is one huge self-inflicted wound. There is no need for any of it. For the most part organizations are driven by fear and most managers/leaders try to deal with that fear by raising more fear. Need more sales revenue? Cancel the sales conference. What possible logic is there in that?
I absolutely believe that all this restlessness is an opportunity to explore who we are and what we really believe. If we don’t like this reality let’s choose another one. The fact is we all make up life as we go along. Maybe it’s time to learn how to do that with higher expectations, belief and passion. As I’ve said many times in this space–the Universe is prepared to give us our heart’s desire. The problem is what’s in the heart. Someone give me an Amen!
Tough economic times often require leaders to return to basics and yield some control. The most basic component of any business is its core story: why it was founded, what it does and for whom, its values and its goals. Now is the time to make sure that every team member knows and understands the core story.
Then leadership needs to open up and yield some control. By increasing disclosure and inviting employees to become part of the solution, morale and productivity will increase. A company may also discover ways to avoid layoffs.
Returning to basics is often the way to return to success.
Having vision and being innovative is vital during these difficult economic times. At the same time, a leader must be willing to take calculated risks. Companies that invest in innovation during tough economic times and develop innovative products and services that truly meet customer needs will prosper now, and more importantly will gain market and wallet share in the future.
Now is not the time to be defensive. Doing so will not do anything to set your company apart from the other competitors.
Today’s retail environment is a real character test for CEOs and other senior management, most of whom have never dealt with such a severe downturn. A few observations:
1. Leading by example is more important than ever. Your behavior as a leader and crisis manager will be reflected by everyone who works for you, so it’s crucial to keep a level head and positive attitude. This doesn’t mean being overly optimistic, but it does help instill confidence if your team knows you are dealing with problems rationally.
2. Don’t compromise your brand integrity, but be flexible enough to admit where your prior strategies had shortcomings. If you need to tweak the value message–and if this resonates with consumers–it probably positions you to capture more market share in the future. From today’s perspective, consumers look unlikely to go back to their over-leveraged ways even after the recession ends.
3. Do your best as a company leader to make sure your financial house is in order. If you have an opportunity to shore up your cash position, refinance debt or reduce costs strategically, do so…don’t wait for demand to rebound. You’ll be healthier in the long run if you take these steps with urgency now.
Leadership is the key term in the field these days. What the NRF execs have said is valid and relevant on the sales floor. We motivate our teams through leadership. Excellent communication skills are needed to properly lead our associates. While most staff would complain about a busy shift or an onslaught of customers, slow times are more detrimental to morale and productivity. Keep staff busy but not with busy work. Challenge them to take ownership of their department or zone. I like to convey a simple message to field teams that I collaborate with: we can’t get through this tough time without your expertise. You would be surprised how many innovative ideas are born after making that statement.
I hear a lot of people saying, “Stay positive.”
That’s fine, as long as it doesn’t mean deny the facts–particularly if you’re leading an organization suffering from an abundance of self-inflicted wounds.
What I’d like to see it mean is acknowledge the facts and:
a. Share the current strategy for turning things around–including concrete actions and how folks will be able to tell that those actions are really happening. (I once worked at a big company that reorganized every two years but never really changed its basic approach to doing business–which was to reorganize every two years.)
b. Beyond asking for ideas from the folks, and even beyond rewarding those folks for coming up with those good ideas that might make a difference, put those folks in charge of implementing them. Yes, even if it means promoting a custodian to management and multiplying her/his income by a factor of two or three. Other managers can help him/her get the lay of the land, and the fact that we don’t promote people with good ideas is nothing but snobbery.
And–as long as we’re making some tiny progress with racism and sexism, maybe we should get rid of classism too–this recession should be showing us that snobbery is as morally bankrupt as the other isms.
Retailers need to avoid top dead center (TDC). In reciprocating engines, TDC is when a piston is at the top of the cylinder, farthest away from the crankshaft. On a bicycle crank, TDC is when the pedals are at 12 O’clock and 6 O’clock. A characteristic of TDC on a bicycle crank is that force applied via a simple pushing down on the pedal will not turn the chainwheel. But, when the rider’s leg applies tangential (in this example, slightly forward) force at the pedal, inertia can be overcome and movement can be initiated. This principle can be applied to top-level directives in retail companies such as “be positive,” “be energetic,” “feel included,” and “be informed about the company.” Not gonna’ happen unless tangential force is applied.
Kip Tindell of The Container Store is my new hero. He’s no TDC guy. I love the idea of all employees “knowing that they know everything the board room knows.” As he states, it’s “magical.” He understands that optimism cannot be delegated or simply arrive as the latest marching orders from the top. Dusting off an old saw, this is majoring on the majors rather than majoring on the minors. Optimism does not trickle down, but instead must be “tangentially” carried in buckets by TDC management to employees to slake their thirst for more information. (Have I worn out this analogy yet?)
And here’s a news flash for those who believe it’s wrong to keep your retail staff busy but not with busy work: In three U.S. Toyota plants, “Instead of building trucks and SUVs, the workers are now undergoing training, taking classes on safety and corporate history, and are even doing some community work–such as cleaning up graffiti and planting flowers.” Here’s the link, make of it what you will.
Self-motivation. The ability to inspire and motivate talent to achieve new goals. Facing the brutal facts, (Jim Collins Good to Great), ability to be relentless in gaining an understanding of the situation, adherence to the philosophy of ‘The Wisdom of Crowds’, choosing the path that maintains brand integrity while doing the right thing. Sounds like a lot of buzzwords, but by combining the rational and ethical ideas of thought-leaders in this country, it is possible to be a great leader.
There has been a lot written about leadership, getting back to basics and being successful in hard times. While not wanting to be redundant, here are a few ideas, in no particular order, (paraphrased from others as cited).
1) The key is to put yourself in a position to win when the game is on the line. (Jim Valvano)
2) The harder you work the luckier you get. (Tom Watson, though this has also been attributed to Tom Kite and others.)
3) FedEx: “Don’t panic”
4) Woody Allen: “80% of success is just showing up”
5) Harold Geneen: You have to know the numbers.
6) Vince Lombardi: The greatest success is not in never falling, it’s in picking yourself up after you fall.
7) Jack Welch: Be clear in communicating and stay on message. Repeat.
8) It’s the customer, stupid. (inspired by James Carville)
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Three lessons we are following:
1. Clarity of message.
2. Honesty with no secrets.
3. Communication – two way.
Sure these are practiced every day in good-to-great companies like ours. But, in today’s tough and uncertain climate, they need to be emphasized even more!
The one huge differentiator not mentioned in this piece (along with ‘stick to your roots’, ‘have fun’, etc.) is BELIEF. Our belief determines which of all the infinite possibilities available to us we choose to make reality. Want to know what beliefs are operational in the organization? Look at the results and circumstances. Sometimes this is not a very popular insight.
Here’s another insight that often does not go over well. 95% of all the problems and issues organizations wrestle with are self-inflicted wounds. This entire downturn is one huge self-inflicted wound. There is no need for any of it. For the most part organizations are driven by fear and most managers/leaders try to deal with that fear by raising more fear. Need more sales revenue? Cancel the sales conference. What possible logic is there in that?
I absolutely believe that all this restlessness is an opportunity to explore who we are and what we really believe. If we don’t like this reality let’s choose another one. The fact is we all make up life as we go along. Maybe it’s time to learn how to do that with higher expectations, belief and passion. As I’ve said many times in this space–the Universe is prepared to give us our heart’s desire. The problem is what’s in the heart. Someone give me an Amen!
Tough economic times often require leaders to return to basics and yield some control. The most basic component of any business is its core story: why it was founded, what it does and for whom, its values and its goals. Now is the time to make sure that every team member knows and understands the core story.
Then leadership needs to open up and yield some control. By increasing disclosure and inviting employees to become part of the solution, morale and productivity will increase. A company may also discover ways to avoid layoffs.
Returning to basics is often the way to return to success.
Having vision and being innovative is vital during these difficult economic times. At the same time, a leader must be willing to take calculated risks. Companies that invest in innovation during tough economic times and develop innovative products and services that truly meet customer needs will prosper now, and more importantly will gain market and wallet share in the future.
Now is not the time to be defensive. Doing so will not do anything to set your company apart from the other competitors.
Today’s retail environment is a real character test for CEOs and other senior management, most of whom have never dealt with such a severe downturn. A few observations:
1. Leading by example is more important than ever. Your behavior as a leader and crisis manager will be reflected by everyone who works for you, so it’s crucial to keep a level head and positive attitude. This doesn’t mean being overly optimistic, but it does help instill confidence if your team knows you are dealing with problems rationally.
2. Don’t compromise your brand integrity, but be flexible enough to admit where your prior strategies had shortcomings. If you need to tweak the value message–and if this resonates with consumers–it probably positions you to capture more market share in the future. From today’s perspective, consumers look unlikely to go back to their over-leveraged ways even after the recession ends.
3. Do your best as a company leader to make sure your financial house is in order. If you have an opportunity to shore up your cash position, refinance debt or reduce costs strategically, do so…don’t wait for demand to rebound. You’ll be healthier in the long run if you take these steps with urgency now.
Leadership is the key term in the field these days. What the NRF execs have said is valid and relevant on the sales floor. We motivate our teams through leadership. Excellent communication skills are needed to properly lead our associates. While most staff would complain about a busy shift or an onslaught of customers, slow times are more detrimental to morale and productivity. Keep staff busy but not with busy work. Challenge them to take ownership of their department or zone. I like to convey a simple message to field teams that I collaborate with: we can’t get through this tough time without your expertise. You would be surprised how many innovative ideas are born after making that statement.
I hear a lot of people saying, “Stay positive.”
That’s fine, as long as it doesn’t mean deny the facts–particularly if you’re leading an organization suffering from an abundance of self-inflicted wounds.
What I’d like to see it mean is acknowledge the facts and:
a. Share the current strategy for turning things around–including concrete actions and how folks will be able to tell that those actions are really happening. (I once worked at a big company that reorganized every two years but never really changed its basic approach to doing business–which was to reorganize every two years.)
b. Beyond asking for ideas from the folks, and even beyond rewarding those folks for coming up with those good ideas that might make a difference, put those folks in charge of implementing them. Yes, even if it means promoting a custodian to management and multiplying her/his income by a factor of two or three. Other managers can help him/her get the lay of the land, and the fact that we don’t promote people with good ideas is nothing but snobbery.
And–as long as we’re making some tiny progress with racism and sexism, maybe we should get rid of classism too–this recession should be showing us that snobbery is as morally bankrupt as the other isms.
Retailers need to avoid top dead center (TDC). In reciprocating engines, TDC is when a piston is at the top of the cylinder, farthest away from the crankshaft. On a bicycle crank, TDC is when the pedals are at 12 O’clock and 6 O’clock. A characteristic of TDC on a bicycle crank is that force applied via a simple pushing down on the pedal will not turn the chainwheel. But, when the rider’s leg applies tangential (in this example, slightly forward) force at the pedal, inertia can be overcome and movement can be initiated. This principle can be applied to top-level directives in retail companies such as “be positive,” “be energetic,” “feel included,” and “be informed about the company.” Not gonna’ happen unless tangential force is applied.
Kip Tindell of The Container Store is my new hero. He’s no TDC guy. I love the idea of all employees “knowing that they know everything the board room knows.” As he states, it’s “magical.” He understands that optimism cannot be delegated or simply arrive as the latest marching orders from the top. Dusting off an old saw, this is majoring on the majors rather than majoring on the minors. Optimism does not trickle down, but instead must be “tangentially” carried in buckets by TDC management to employees to slake their thirst for more information. (Have I worn out this analogy yet?)
And here’s a news flash for those who believe it’s wrong to keep your retail staff busy but not with busy work: In three U.S. Toyota plants, “Instead of building trucks and SUVs, the workers are now undergoing training, taking classes on safety and corporate history, and are even doing some community work–such as cleaning up graffiti and planting flowers.” Here’s the link, make of it what you will.
Self-motivation. The ability to inspire and motivate talent to achieve new goals. Facing the brutal facts, (Jim Collins Good to Great), ability to be relentless in gaining an understanding of the situation, adherence to the philosophy of ‘The Wisdom of Crowds’, choosing the path that maintains brand integrity while doing the right thing. Sounds like a lot of buzzwords, but by combining the rational and ethical ideas of thought-leaders in this country, it is possible to be a great leader.
There has been a lot written about leadership, getting back to basics and being successful in hard times. While not wanting to be redundant, here are a few ideas, in no particular order, (paraphrased from others as cited).
1) The key is to put yourself in a position to win when the game is on the line. (Jim Valvano)
2) The harder you work the luckier you get. (Tom Watson, though this has also been attributed to Tom Kite and others.)
3) FedEx: “Don’t panic”
4) Woody Allen: “80% of success is just showing up”
5) Harold Geneen: You have to know the numbers.
6) Vince Lombardi: The greatest success is not in never falling, it’s in picking yourself up after you fall.
7) Jack Welch: Be clear in communicating and stay on message. Repeat.
8) It’s the customer, stupid. (inspired by James Carville)