Leading [or Waiting] For Recovery
By David Parks
I am not an economist by any stretch but Pareto was, so I’ll rely on an interpretation of his 80/20 principal to state my case:
Eighty percent of leadership development professionals in 2009 tell a consistent story of budget cuts, axed programs, initiatives on hold, and a general state of waiting for the economy to recover.
The other twenty percent tell a quite different story. Theirs is much more ‘leader-like’ as they confront the real challenges of the economic downturn such as the aftermath of layoffs, doing more with less and maintaining morale. Their view of the crisis offers more optimism. Many see it as an opportunity for change, the burning platform needed to recalibrate and reset their businesses. Waiting for the troughs of the economic cycle to recover is definitely not their strategy. They see themselves positioned in the best possible way to lead and drive recovery. After all, isn’t that what leadership development professionals are supposed to do?
In the extensive media coverage afforded the global economic crisis, precious little attention has been paid attention to the implications for organizational leadership. I believe that now, more than ever, is the time for leadership development to show what it can do. Here are three points to consider for leadership development that will help claw us out of the crisis:
1. Leadership Development Needs To Lead
Is leadership development in your organization ‘stepping up’ or ‘stepping back’ from the challenge?
Lack of leadership is in large part what created this downturn, and leadership is what is going to pull us out of it. Talk about a time where there is clarity of purpose – nothing focuses the mind quite like the prospect of extinction from this world. This is what will happen to leadership development functions that don’t step up and lead. Organizations need leaders they trust, they need a sense of hope, and they need vision beyond the current crisis. With layoffs, employees left behind are being asked to work harder with fewer financial incentives. Rebuilding trust, communicating priorities, ‘gluing’ the organization back together and building the capabilities to lead are key.
Bold leadership from the leadership development function is what’s needed in this challenging time. It is not the time to sit on the sideline. This is the burning platform for leadership development to lead change as never before.
2. Looking For Leverage
Axing programs, reducing headcount, firing vendors and dialing back activity are all ways to make an immediate impact. Taking out a hundred headcount, for example, has immediate effect on financials. Executives can lay claim to making the tough call and taking dramatic action. This is never just cutting costs though; it is making a decision that something or someone is no longer strategically relevant. Reducing costs with an axe, not a scalpel, or without an eye to strategy, can do great harm to organizations.
In this downturn we have witnessed some fairly simple and strategic plays to ensure that the right overheads are trimmed and that investment leveraged. One client launched a ‘Vendor Optimization Initiative’ where all learning and development vendors were reassessed in terms of the value and relevance of their offerings. This resulted in an overall cost reduction of 20% savings and improved levels of service. Another reduced their 4-day high potential program to 3-days, moved it back on site to save on hotel and venue costs and started using internal trainers. Smart strategic steps such as these ensure a continued investment in the capabilities that you need most and that will provide most leverage.
3. Leading For The Long Term
One of the biggest challenges in the leadership development marketplace is that there are so many approaches, philosophies, models and ‘flavor of the month’ offerings. In better economic times many organizations tried a bit of everything to see what would stick. In his blog Great Leadership By Dan, Dan McCarthy says this more forcefully - “There are a lot of incompetent HR and Training departments all too willing to buy and promote this stuff and other bad ideas.”
The downturn has certainly weeded out the silly stuff, and we have witnessed a move by some (this would be the 20% referenced in the first paragraph) to adopt a more strategic and longer term approach to leadership development. These initiatives are not a “7 Point Plan To Better Leadership” kind of approach. Rather, they draw a very intentional connection between Individual and Organizational goals. Accountability features strongly both during and after the programs. These programs are usually branded and customized to the client company telegraphing a different kind of ownership of the program and not a fleeting experiment with a ‘program du jour.’ Leadership development is not a rental solution, you have to own it.
So back to the original big question in the title – are you leading or waiting for recovery? With less than 60 days left in 2009, don’t wait until 2010 to make your New Year’s resolution. Get out in front now and lead, create leverage like never before, and commit for the long term.
David Parks is Vice President of Business Development. He can be reached at davidparks@bluepointleadership.com or (415) 383-7500.
