The New Leadership Imperative
By Holly G.
People ask me all the time what I consider to be the biggest
challenge facing today’s business leaders. I don’t even hesitate on
this one. It’s not foreign competition, new technologies, the
rising cost of energy and raw materials, unstable financial markets,
or anything like that. It’s the automatic assumption by most
business leaders that we still live in a fairly predictable world.
Think about it. Six months ago, who would have thought that
Toyota would be in the position it is today? Here we have one of
the largest, most successful, most respected companies in the
world. A company known for its commitment to building dependable,
high-quality products. And now it faces a crisis that is not just
destroying its hard-earned reputation, but could well put it out of
That’s unthinkable! And yet it’s happening right
before our eyes.
Sales of Toyotas are plummeting. The U.S. government is
launching a full-scale investigation into the company’s business
practices. And lawyers around the globe are licking their chops in
anticipation of the tidal wave of lawsuits about to be unleashed in
regards to the faulty floor mat/throttle issue.
If Toyota is found to be at fault, and if it turns out they
had knowledge of the defective design and did nothing about it --
both of which appear to be likely scenarios -- punitive damages
could run into billions of dollars. Not even Toyota could
withstand that kind of a financial hit and still survive.
I’m not saying the unthinkable will happen. But the
possibility that Toyota could go out of business in the near term is
very real. And that’s the kind of world we now live in.
Until we incorporate this fact into how we run our businesses, we
will continue to put them at risk.
Let’s look at the other side of the coin.
A year ago, most people were ready to write General Motors
off for good. Sales were slumping, market share had sunk to
unprecedented lows, and the red ink was piling up. Onerous labor
contracts continued to weigh the company down. And despite the huge
government bailout, many feared the company couldn’t innovate fast
enough to stave of total defeat.
Now, the tide may have turned. The company has shut down or
divested itself of unprofitable divisions. Labor has agreed to
unprecedented contract concessions. And, in the face of Toyota’s
current woes and a slightly improving economy, sales are starting to
Do you think that a year ago GM senior management was asking
themselves, “What would happen if our biggest competitor suddenly
went under?” Of course not. That would have been unthinkable.
Yet, here we are. Even if Toyota doesn’t go under, the game has
changed dramatically in GM’s favor. And no one, especially those so
desperately trying to turn GM around, saw it coming.
Strategic planning is all about looking around at what’s
going on today to see where our businesses need to be tomorrow. But
we can no longer predict the future with any degree of certainty.
History is less and less predicative. The world simply moves too
fast and there are more moving, interdependent parts than we dreamed
possible a few short years ago. Often, before we even have time to
get clear on where we’re going, the conditions that led us to that
decision have already changed.
Leading a business in this kind of environment requires a new
way of thinking. Which raises the question: given that most
business leaders still view the world as fairly predictable, how do
we train ourselves to think differently?
The answer can be spelled out in four simple words: pause,
think, focus, run. Here’s what I mean by that:
Pause. Make it a regular habit to back away from the
day-to-day and take a hard look at the world around you.
Evaluate what is happening outside your industry as well as
Think. Constantly challenge your beliefs and assumptions
about what you know to be true about your customers, your
markets, your industry and the way you do things inside your
organization. Take nothing for granted.
Focus. Identify opportunities to add value to your customers
in ways that nobody else is doing. Identify significant
initiatives that support leveraging those opportunities, get and
keep everyone in your organization clear on achieving them.
Run. Implement quickly, with focus and flexibility, knowing
in advance that your new initiatives will not unfold exactly as
Then repeat above process.
During the think phase, develop the habit of engaging
in scenario planning. Ask questions like. “What would happen if our
biggest competitor suddenly went out of business? If we had no
constraints, how would we solve the ‘unsolvable’ problems in our
industry? What is taking place in other industries or other parts
of the world that we could use to transform our industry?”
Many companies do this once a year during the strategic
planning process. In today’s world, that will no longer suffice.
When a company as large and as seemingly invincible as Toyota can
have the rug pulled out from under them so quickly, it’s clear that
the old rules no longer apply.
Pondering the imponderable should become an everyday
occurrence in organizations. If you want to be a successful leader
today, thinking the unthinkable needs to become a way of life.
Read other articles and learn more about
Holly G. Green.
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