What makes leaders take businesses out of crisis?

The era we entered has a crisis nature. World central banks are pouring new money into the market, trying to reanimate their economies. The volume of new money is colossal: in the fight against the financial crisis, the central banks of Japan, the UK, the European Union and especially the US do not stop the printing press. In the United States, for example, the money supply has more than tripled since 2008. According to analysts, inflation in the United States is inevitable against the background of all the prerequisites created; its offensive is only a matter of time.

2014 is not easy for Russia. The Center for Development of the Higher School of Economics gives a forecast of a 20% weakening of the ruble for the current year. The devaluation will lead to the fact that the growth rate of prices will exceed the growth rate of income of the population.

The specialist of one of our clients from the financial sector characterized the future situation laconically: “Guys, tighten your belts, there will be a PC”.

Naturally, the economic situation will also affect the business: it is obvious that budgets will start to be cut, the number of jobs will be reduced, the business will try to “carefully” survive the crisis time, trying to reduce losses to a minimum.

The crisis within the company does not always arise due to the unstable economic situation. It is provoked by a number of things, including a state of stagnation, for example, imperceptible, until the fall of the company's economic indicators begins. But whatever the nature of the crisis, it takes titanic efforts to overcome it.

Why is the crisis differently overcome by different companies (it doesn’t matter if they work in the services sector, do they produce goods of national or industrial production)? Some pass through the crisis, as through a cleansing crucible, becoming only stronger. Others either do not go through it at all, ceasing to exist in a relatively short time, or, without overcoming crisis phenomena, enter the period of "survival", more and more giving up positions and slowly declining and finally collapsing.

In general, the answer is obvious: in times of crisis, the centralization of leadership and, first of all, the figure and actions of the leader come to the fore. If we analyze the history of large companies that have passed through a period of crisis, the picture is approximately the following. For companies that have overcome difficult times and only strengthened their positions after this, the presence of a manager who has a number of well-defined features is typical.

Content:

    What characteristic features of leaders help to overcome the crisis in the company?

    A passionate desire to create and offer a better product and no less passionate faith in the ultimate goal of transformation. To illustrate this, I will make a small digression.

    I recently came across a video interview with Steve Jobs, recorded in 1995 (Steve Jobs: The Lost Interview). This record has a pretty dramatic story. Jobs interviewed for the television series "Triumph of the nerds", but used in the project only a small part of it. The film, on which the entire interview was recorded, was lost in the mid-90s, and only recently the television series director Paul Sung found a cassette in his garage.

    Steve Jobs, The Lost Interview

    In the video, he is young, naturally dressed in a black turtleneck, willingly and with a sincere smile answers the questions of journalist Robert Cringley. Talking about his retirement from Apple, he suddenly honestly admits that it is very hard for him to talk about it, it’s hard not to cry, remembering that story.

    All this happened two years before Jobs returned to Apple, which was going through very difficult times.

    In everything that he said in this interview, it’s obvious: the desire to create and give people the best product on the market was one of the main incentives that helped him in 1997 to pull out the fading Apple out of the crisis.

    What, in Jobs's understanding, the products created by his team were different from all the others was that they were created “with the spirit of enlightenment”. The best people with humanitarian and technical education (if it were not for computer science, which became their main business, they would certainly have achieved success in other fields), brought to this product a particle of their soul and enriched it with aesthetics from other areas of human knowledge, specialists in which were. Jobs sincerely believed - no, not what makes something great, but what this product will bringaboutpeople benefit from competitors' products. This faith was passionate and ineradicable.

    He was invited to the role of savior in fact 90 days before the bankruptcy of the company. And he did the incredible - he pulled Apple out and eventually made the company the undisputed market leader.

    Discipline. Without it, a reliable management system is unthinkable; without it, it is impossible to subordinate all the resources of a company to a single strategic goal. By itself, the strict regulation of actions, the complete regulation of employees by management (that is, what is called discipline) does not really mean anything, in this sense discipline is just a manifestation of bureaucracy. Roughly speaking, it is important not to have the employee come to work strictly to 9.00 and leave no earlier than 18.00. It is important that he understands that during working hours he must bring maximum benefit. Thus, the real discipline is first of all self-discipline, that is, disciplined thinking, which gives rise to disciplined actions.

    It is almost impossible to instill discipline in unruly people, you can only move in one way - to hire self-disciplined people.

    To illustrate this thesis, let us recall the crisis periods from the history of the two largest American banking companies - Wells Fargo and Bank of America. On the abolition of state regulation in the banking sector in the 1980s. these banks reacted differently.

    Wells Fargo won in this situation: the company was still in the 1970s, when Dick Cooley was at the head of the company, who had foreseen that the banking sector was facing global turmoil, headed for the selection of the best people. So the company began a program of "injection of management talent." Outstanding managers were hired everywhere, sometimes not even for any particular position. Hired for talent - and they found a place.

    The years of the rule of the next leader, Karl Reichard, were times of transformation. But the company, thanks to the fact that the team already had special people, was able to reorganize without serious consequences. Reichard began by introducing Spartan conditions for top management. For two years, the salary of the top management was frozen (and this despite the fact that Wells Fargo was quite ready for the crisis, the profits at that time were among the highest in the entire history of the company). The luxury dining room for top management was closed, Reichard signed a contract for the supply of meals with a company serving student dormitories. Free coffee has disappeared from the meeting room, and indoor plants have disappeared from the top-managers' offices (watering them, the manager thought, was too expensive). Spartan conditions that have become part of the corporate culture, complete sobriety in assessing the situation in the banking sector and a clear understanding by the leader of what it does, what it seeks, ensured the company's success.

    In the same period, Bank of America behaved completely differently. The leadership was not ready to get rid of the habit of luxury characteristic of bankers as a whole, in the days of crisis in the market. Luxury did not leave either the offices of the chiefs or their heads; they still used corporate aircraft and other “excesses”, without which it was quite possible to do. For three years (it was the mid-1980s), the bank lost $ 1.8 billion.

    Disciplined thinking and actions are one of the values ​​that a leader instills in a company so that it can overcome crisis phenomena relatively painlessly.

    Understanding the marketing of the company. Communication with the audience today is impossible to ignore. PR and content marketing strategy should be designed to win the trust of the audience, to create a unique image of the company, its products or services.

    Steve Jobs was neither a brilliant manager in the conventional sense, nor a great programmer. His greatest talent, Guy Kawasaki, who worked with Jobs at Apple, defined it this way: "Steve was the greatest marketer of all time."

    In the late seventies, when Apple just started its business, Steve Jobs, along with Mike Markkula (the company's first business angel), identified three core values ​​for his business:

    1. Empathy for customers
    2. Focusing on only a few, but excellently made products (the best on the market)
    3. The introduction of ease of use and high quality, not only in the products themselves, but in general in everything: in accordance with this principle, packaging was created, the design of Apple stores, advertising, press releases were developed - in short, everything.

    Well and the main thing - Jobs himself was able to find expressive marketing moves, thanks to Apple as well, they were not just users, but an army of adepts (super-loyally tuned to the brand of fans). One of these brilliant moves - at a MacBook Air presentation, he took an incredibly thin laptop out of a simple paper envelope and showed it to the audience. The audience was delighted.

    Super slim MacBook Air in a simple stationery envelope

    Strong will combined with modesty. "You can achieve anything in life, provided that it doesn’t matter to you who will get the laurels," said Harry Truman. It is possible that someone does not believe in it, but many “ingenious” leaders were rather modest, even “seemingly gray” people who did not strive for self-praise, for brightness. In the first place for them were always the interests of the company, and for its benefit they were ready to listen to any more competent opinion. No exception, and Steve Jobs. He was rather modest in his needs, and indeed he was a very nice man, if he had no business. As soon as the affair began, his iron will entered.

    A vivid example of such a strong-willed and "nondescript-looking" leader is Angela Merkel. Probably, a comparison of the politician with the head of the company will seem somewhat strained. But in essence, if you do not go into global differences, the leadership qualities in politics and in business need the same.

    In the history of Germany of the post-war period, there was no more undervalued politician than this woman with a completely ordinary, “gray” appearance, practical hairstyle and rather boring wardrobe, even without a special oratorical talent. In everyday life, Merkel goes to the store near the house for groceries, does not use perfume, is afraid of dogs, has an Audi business car and a personal Volkswagen Golf. Nevertheless, this modest-looking woman with an iron will pressed serious political opponents on her political path and successfully controls one of the leading world economies.

    Who would have thought that a modest woman could be a strong chancellor?

    It seems to you that in the character of Merkel there is no passion at all (and in fact we put her in the first place among all the features of a leader)? But passion is not always manifested as expression. Very often, it is expressed in pragmatic perseverance. From this point of view, it seems that Merkel has no other passion besides the welfare of Germany and the stability of its economy.

    Watch the video: Legal vs. Ethical Liability: A Crisis of Leadership and Culture. Mel Fugate. TEDxSMU (October 2019).

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