Corporate executives constantly seek lessons from successful companies, as the thirst to buy the runaway best seller Good To Great exemplified. But consultants Steven Aschkenase and Prasad Hedge say in fragile economic times there is also a lot to be learned from distressed companies. In the Ivey Business Journal, they outline seven lessons that can be taken away from failing companies - five approaches that you want to emulate and two that you would be wiser to avoid:
SPEED RATHER THAN PERFECTION: Unhealthy companies quickly learn that the best strategy in the world is worthless if it isn't achievable in a very tight time frame. Perfection is noble, but it doesn't work in today's economy. The consultants contend that 70 to 90 per cent of the time taken by companies in major initiatives can be effectively eliminated: "Healthy companies often follow elaborate methodologies designed to deliver repeatable, predictable results. But in the process they can unintentionally construct rigid, one-size-fits-all methodologies that are over-engineered and drive work effort that does not create value."
CASH IS KING: Distressed companies fixate on cash - actual, not hoped for, cash. And that obsession runs deep into the company, to all key managers, not just the CFO. Cash is precious. By comparison, many healthy companies have, until recently, had access to an overabundance of cash and are blasé. Instead, the consultants urge you to develop weekly cash forecasts for the coming 13 weeks, or financial quarter; update the forecasts weekly and compare actual to plan; and as the process becomes entrenched, update forecasts every month instead of every week.
FOCUS ON HIGH-IMPACT ISSUES: A crisis can be a gift, providing clarity and focus of the desired end state and the shortest critical path to that target. Healthy companies can't think - or execute - as clearly, blocked by the various silos and traditions within the company. It's important that healthy companies also know where they want to end up and cold-bloodedly pick the most effective way to attain that goal.
MAKE THE TOUGH PEOPLE CALLS: When asked what would they do differently next time, turnaround managers invariably insist they would have made more key management changes, and made them sooner. Healthy companies must do the same, ensuring the proper people are in the positions with the largest impact on results. "Tolerating consistently underperforming managers is serious enough, but allowing this in critical executive positions is unconscionable. Near-term results suffer and the culture is poisoned in the long term," they stress. "These issues are rarely private. To the contrary, they are typically well known in the organization. The CEO must have the courage and conviction to act."
UNFREEZE THE ORGANIZATION: In a distressed organization, decisions that usually take months to make can be taken in hours or days. Those rapid decisions, they argue, are at least as good as the slow, agonized decisions of the past - so unfreeze your organization with quicker decisions, and a willingness to shake up your systems to improve performance.
CUT FAT, NOT MUSCLE: In their zeal to cut costs and spark an immediate turnaround, downsizers don't distinguish between fat and muscle. Healthy companies must use a more surgical approach.
FOCUS ON MORE THAN SURVIVAL: The consultants say that a common mistake in turnaround situations is made when managers consider survival as a goal rather than a means to an end. In attacking your problems, make sure you address the critical structural and strategic issues prompting you to act, rather than opting for a "band-aid" solution.
Productivity: How to organize e-mail with an assistant
If you have an assistant, you may be struggling with how to use that individual to screen and handle some of your e-mail. After trying a few approaches, Thomas Nelson Publishers' CEO Michael Hyatt created the following rules for receiving messages in his e-mail software program:
• Any reply to an e-mail he initiates come directly to him.
• Any e-mail from a direct report comes directly to him.
• Any e-mail from someone on the list of important contact he developed comes directly to him. He expects this list to grow over time, but it will only increase when he specifically adds someone to this list.
• All other messages are moved to his assistant for her to process. If she feels he needs to respond personally, she drags it back to his main e-mail program.
"This has worked remarkably well. It has dramatically reduced the volume of e-mail messages I am handling on a daily basis," he concludes on his blog, MichaelHyatt.com
How to improve organizational learning
Vancouver-based leadership development consultant Mark Frein says companies can be good at training but are often lousy at education. They struggle with how to teach their staff to think - open their minds, and reflect more broadly.
He suggests you focus more intently on such organizational learning - and even if it takes potential money away from his firm, Refinery Leadership Partners, offers some suggestions for doing it on the cheap.
First, you can follow McKinsey & Consultants, which he notes provided copies of Jared Diamond's Pulitzer-Prize-winning book Guns, Germs, and Steel to all of their consultants. Find a book that stretches your team's thinking beyond your immediate industry issues and the normal business-leadership literature, have them read it, and ideally provide a forum for discussing it. Maybe you even need a regular book club for mind-stretching books.
A second idea, which his own firm follows, is to gather every quarter for a development day in which everyone tries to teach colleagues on a given topic that is strategically important to your organization. Share your individual knowledge, with presentations and general discussions by team members. The advantage is not just new learning on the topic, but everyone getting practice on how to educate others, a vital skill. If you want, give feedback on how they performed in that educational role.
Don't spin your wheels
The most insidious form of multitasking is thinking about what action to take while trying to take it, advises blogger Andre Kibbe. When you are immersed in a project, if you're lucky, the next step will be self-evident. If not, and you're spinning your wheels, take a break - not to relax, but to suspend doing while thinking about what to do next. In other words, stop unconsciously multitasking. Tools For Thought blog
Font affects perception
If you need to convince a client to perform some kind of task - complete an application form, for example - consultant Roger Dooley recommends using a simple, easy-to-read font when giving the instructions. He notes that research by Hyunjin Song and Norbert Schwarz found that when participants were presented with instructions in a harder to read italic font rather than a simple font, Arial, they estimated the task would take twice as long to complete - and were less likely to do it. Neurosciencemarketing.com
Canadian expatriate David Ferrabee, a communications consultant living in London, says a lesson from a pub that might help you in business is to go home before closing time. There is no sense being somewhere where you shouldn't be, overstaying your welcome. Ableandhow.com
Ditch the interview
Career adviser Brianna Raymond says it's okay to walk out of a job interview if you have taken time off from your current job and realize the interview is wasting your time because the job isn't what you had imagined. Wait for the next question, and then politely explain your decision. Pongoresume.com
Sales consultant Jeffrey Gitomer observes many salespeople try to establish rapport around things - the weather, ball game, or the news - but that's idle chatter rather than rapport. Real rapport comes has an emotional base, so look around at the office of someone you are visiting, and inquire about something that will elicit personal information, personal history, or some type of positive emotional response. Sales Caffeine newsletter
The undo function
When you make a mistake on your computer - from accidentally deleting a paragraph in Word to deleting a file you didn't mean to delete - computer wizard Rick Broida recommends pressing CTR-Z, the undo function that will often correct for the unwanted action. PC World blogs