Leading change in difficult financial times: dealing with an uncertain financial climate.

Pages:10(6)
Author:Gendron, Renee
 
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If not for money, why would a person work for you and your company? Very few companies have one individual that reinforces culture. [....] when you chase value you need to attract people who have ideas, are willing to share their perspective, come from different backgrounds and bring an abundance of enthusiasm to the table. Being the only woman or the only minority can be very awkward. Barriers of participation aren't always physical. Leading in difficult times means that invisible walls are identified and shattered. It means that leaders intentionally make more space at the table.

Leading in difficult financial times is challenging. Many organisations once increased resources to increase output. These firms were used to improving performance by attracting top talent with financial rewards. They have been forced to rethink the idea of measuring and rewarding performance based solely on rates of return. Today, we find ourselves in a situation where there is simply less money to go around, seemingly fewer opportunities to develop new markets and an anxious workforce operating in uncertain financial climate. What's more, the pace of work and the perception of time have changed causing additional headaches for leaders. As will be explained in the article, growth, profit, time, space and motivation have all changed. Leaders are struggling with how to adapt to a low to no growth environment, a broader range of employees who have different demands on their time and a growing need to find purpose and meaning in their work.

On August 18, 2015, Stephen Gordon argued in the National Post that the Canadian economy is as good as it will get for years to come. If that is the case, then it is a unique moment to pause and reflect on certain key assumptions. First, a decline in fortunes is an opportunity for leaders to rethink strategy. Instead of narrowly focusing on money going into a department or an undertaking, leaders can shift to thinking in terms of effort (or energy) in and effort out. Allocating more money into an endeavour may be needed to scale it but there are times when more money adds complexity, layers of management, bureaucracy and can shift our focus away from quality impact and outcomes. One basic example is increases in spending in healthcare do not always translate into improved results.

When more energy goes into an undertaking than the value it generates, it is a call to leaders to engage colleagues in a renegotiation of relationships. Leaders can initiate a discussion on how these relationships are formed, identify which are beneficial and which aren't and why and identify the aspects of a relationship that can be enhanced, or forge relationships where none existed.

Increasing the complexity of a project or organisation should only be considered when it adds direct value to the deliverable. Otherwise efforts must concentrate on how to simplify the means without sacrificing ends. Instead of improving one process critically examine the totality of processes. On paper these may seem like easy questions to answer but they require deep in situ thinking about their ramifications and impact:

* what actions are needed to create your product

* what actions are needed to support the creation of your product

* how those actions interact with one another in such a way as to be as simple as possible without comprising integrity?

Leading in difficult financial times creates space for a discussion on the value your company provides. If your company is a Tier III company, providing services to Tier II companies, difficult financial times can give you a unique vantage point of gaps in the market. Some clarification is first required.

Tier I companies are those facing the end customer or user. Tier II companies provide services and products to the Tier I companies to deliver their product and service. Tier III businesses provide services and goods to Tier II companies. As markets in Tier II companies becomes more competitive and margins decrease, opportunities may lie beside you among Tier III companies or elsewhere outside the vertical chain. It can also create space to step up to become a Tier II company, with a different perspective, a unique delivery method and a better offer.

Leaders have to contend with a low growth environment and in shifting customers you may not be able to increase profits but may remain operational. That's a different mindset. The pivot from growth towards steady-state or near steady-state is difficult. Periodically changing customer base to maintain operations is not something many business leaders are comfortable discussing yet it may...

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