April, 2009

Welcome to The Mahler Update

Dear Philip,

The feature article was written by the Mahler Faculty and offers five core principles to help you focus on the leadership practices that will get you through the current economic downturn. Please join the discussion of this article at The Mahler Co. Graduates and Friends group on Linked In.

Leading in the Downturn: Timeless Strategies for Success At Mahler we spend considerable time talking to people in our network about business issues, economic challenges and political events. We ask them how their businesses are doing, what they foresee in the emerging political process, how their strategies are evolving and how well they are executing against that strategy. This happens in both our executive programs and in work we do with clients on a variety of issues. Based on these conversations, it is safe to say that the collective mood is grim. We are reminded of the police chief's terror in the movie Jaws when he first sees the Great White Shark: "We are going to need a bigger boat!"

This has led the Mahler faculty to do some research and discuss among ourselves what we could be doing to help those we have worked with over the years. Actually, it was my brother, Bob Janson who pursued this with us and was the catalyst for this short piece.

He began his one-on-one discussions with each of us by saying,

"Look, many of us have been through this kind of downturn before and we all felt pretty terrified. Some of us were in big corporations; some in consulting firms; some of us were small business people. As a faculty, we need to be thinking about what words of advice we have for those smart people who have been through the Mahler courses over the years."

The Mahler Faculty crafted this piece together in an attempt to broaden our dialogue to include you, The Mahler Community, and would welcome your comments. Please go to www.linkedin.com and join the group, The Mahler Co., Graduates and Friends. You will be able to join the discussion there.

One of the things we talked about was the need for intrepid CEO's like Muhtar Kent, of Coca Cola who was described in a recent Wall Street Journal piece as undeterred: "I've been through this movie in smaller versions a number of times in the past----in 1998 in Russia, 2001 in Turkey and in Latin America. Times like these are not an excuse to sit back and ride out the storm."

Stimuli such as these provoked us to come up with five core principles for you to consider as you fight your way through this storm.

Principle 1: Fight Helplessness, Embrace Your Resilience

Now, we all know that you didn't have anything to do with creating this problem. In fact, you have likely been working for years to get the business fundamentals right. Given this, you might be feeling just a wee bit helpless. Don't give in to this feeling! There are numerous constructive action steps that you need to take for yourself, your family, your people, and the organization. What this means is that you will have to get your energy from within and from the people around you.

In our programs we use a self assessment on Hardiness developed by the psychologist, Salvador Maddi. This is a measurement of resilience: the ability to take a hit, learn and move on. We recommend this to anyone who would like to learn more about how to mobilize these strengths. We talk a little more about this in Principle 4, below.

Principle 2: Assess Your Strengths; Build on Them...and USE Them

We focus students in our programs on how to discover their strengths and use them. That is very important now that there are so many things to feel bad about. So we urge you to reflect on and focus your energy around your strengths.

Take an inventory of all the things that you are good at. Look at how you are increasing their range and impact as you apply them to the unique challenges of this environment. If you find that there are things you are not strong at, you might think about partnering with a person who has those skills and can help you in that area.

Downturns create a lot of opportunity. Sometimes events that feel terrible at the moment actually provide us with inspiration, direction and focus. One of our clients recently told us that although they are unable to sell as many trucks as they once did, they have been looking for and found opportunities that they never looked upon in the past as opportunities, such as maintenance and refurbishment of the rigs. The learning here is that the same glass can be half empty or half full, depending on your perspective.

Our experience is that problems actually create more opportunities than people think. If you continue to engage with those around you, you will discover ideas that are convertible into creative action. You will surprise yourself, encourage others and benefit everyone around you.

If you need to, carve out some quiet time and make a list. Then identify how you can apply your strengths to those you touch: your family, peers and direct reports. Try to understand and address their concerns, motivations and fears. Get busy on this. Although it is definitely way over on the touchy feely side of the management role, it is crucial to your success as a leader. And, it is a lot more productive than just feeling bad.

Principle 3: Act Like Business People First

We found this quote from Ram Charan's new book (1)to be quite compelling:

"Your job is to evaluate your top people with a new lens and under a different light. Do they have the skills and mind-set to lead under current circumstances? You cannot afford to keep those who are indecisive, those who tend to be loners, and those who are frozen in analysis paralysis. People like that drain energy from an organization."

The argument here is that your primary job as a leader is to continue doing what we teach leaders to do. This includes continuing to select great people who are complementary to your organization's competencies.
It includes the fundamentals like evaluating, coaching and counseling.

It means focusing people on the vision and strategy as well as on execution. It also includes the necessary job of termination, or as Walt Mahler described it, Removal. Charan is arguing, to paraphrase Rahm Emanuel, the Obama administration chief of staff, that leaders should never waste a good crisis. That is to say, if you have to let go of people, for goodness sake let go of those who have less strategic and executional value to your organization. Whatever you do, don't do it on the basis of seniority. The lawyers like the seniority method (LIFO: last in, first out), but you tend to lose your next generation of talent with that thinking.

We are much less sure if we agree with Charan's idea that only highly decisive people are of value in a downturn. However, while we are less sanguine about his focus on pure action orientation, we suggest to you that his idea here may be on target regarding what your bosses may be expecting of you. Now may be the time for you to draw on that action-oriented side. For more information on this, we recommend our colleague Ken Brousseau's ground breaking work on Decision Styles (2), which many of you will recall from our classes.

Principle 4: Take Care of "You, Inc."

Studies show that leaders who have resilience, who have the ability to reframe events and commit to taking positive action, actually thrive in crises. In our classes you might remember the Hardiness Survey and the work of Salvatore Maddi. Under this framework, Hardy Attitudes----- Commitment, Control, and Challenge----give one the courage and motivation to turn stressful changes to personal advantage. Commitment is full involvement with the people and the events that are happening around you. Control enables you to take direct, hands-on action to transform problems into opportunities and control what you can.

Challenge empowers you to embrace these problems as something that you can take on and help resolve. Commitment, Control and Challenge together provide a flywheel-like effect that helps propel you forward through challenging times.

One of the findings of Maddi's work (3) is that Hardiness (or resilience...the ability to take a hit) comes from our relationships at work and at home. Stay involved with your family and your work colleagues at all levels. Stay close to your mentor. If you don't have one, get one.

Those of you who've worked with us know that we encourage you to get exercise (releasing endorphins which act as natural opiates) to keep your mood up and help give you a sense of perspective. Also, stay involved with your hobbies.

A word of caution: Part of taking care of yourself is avoiding negative actions that take you away from the troubled world. Maddi talks about "regressive coping". This includes a wide array of things to keep tabs on and avoid. Don't blame others; take personal responsibility for yourself. One of the things to keep tabs on is self medication. Don't let this downturn move you to engage in adaptations that could hurt you or those around you.

The message here is that you need to focus on and give time to You, Inc.
You are the CEO of You, Inc. and you need to ensure continuity of leadership.

Principle 5: Take Care of Others

Your people, your peers and your boss are likely trying to find a firm footing for the future. They may be feeling down, cautious and paralyzed. On the other hand, they may be simply hoping it all goes away and that they will be able to find the next stage, the new upturn, something that can give them firm footing. On this latter point, Wall Street is no doubt hoping for the return of the god of greed, Gordon Gekko, an amalgamation of Ivan Boesky, Michael Milkin and Carl Icahn in the iconic movie, Wall Street.

Unfortunately, the process we are in may not be at all about simply getting on with business as usual. There is a raging debate at all levels of business and government about the meaning of this downturn for American capitalism. The federal government now owns significant swaths of the business landscape and is forcing changes throughout what we think of as "the private sector". As a result of all this, global business is entering a new zone, one that we all need to figure out how to prosper in.

In our classes we use the work of William Bridges to help us understand personal and organizational change. In Bridges' thinking, transitions start with an ending. All changes (graduation, new job, marriage, the birth of your first child) imply an ending as well as a beginning.

Successfully negotiating the transition requires us first to let go of the past. The natural tendency is to rush into the new beginning.

Bridges cautions us to focus on the transition from old to new and to willingly enter a "neutral zone".

Bridges argues that it is important for us to understand this neutral zone, to try not to rush through it, or become overwhelmed when we find ourselves struggling. He also points out that it is while we are in this neutral zone that innovation is most likely to occur (4).

Take the time to talk to the people around you and share how you all are handling the financial downturn. Your customers are especially important. Now is the time to stay closer to them than ever. The positive attitude of your thoughtful listening, realistic confidence and focus on resolving difficulties and seeking opportunities will help lift the mood of those you engage with, inspiring them to see and act on new possibilities in their lives too.

And, last, but not least, take care of your family as they often get scared during such times as these. This includes your spouse, your college sophomore, even your little ones. They will need your help and teaching to put this downturn in perspective.

One last thought on taking care of yourself and others: We have observed that during downturns, people tend to do the opposite of what we are advising: they avoid numerous key interactions. Some senior leaders in organizations tend to avoid outside connections. For senior leaders, this can sometimes be observed as a hunkering down and focusing on the internal dynamics of organizational life (cost control and spend reduction, for example) with less attention on customers' emerging requirements. For middle managers, it can be observed as doing less of the management fundamentals (coaching, developmental dialogues) than they would ordinarily. We can almost hear the internal dialogue: "How can I talk to them about their careers when I'm not sure we'll be in business!" Our message is this: Now is precisely the time to talk to everyone. Talk to your family about how they are or may be impacted.

Talk to your direct reports about their careers and about their performance. Talk to your peers and your boss about the business.

This downturn is a crucible and can make you stronger. According to Warren Bennis and Robert Thomas (5) crucibles force leaders into deep self-reflection, to a place where they can examine their values, question their assumptions and hone their judgment. We urge you to re-frame the current situation in the context of a larger and perhaps even a spiritual perspective.

Finally, we leave you with this: Will Bowen (6) has distributed six million bracelets with the words "A Complaint Free World" He believes the bad economy may be the antidote we need to re-evaluate our lives."

In good times, people take for granted what they have, and whine about what they don't have, he says. Bad times make people more grateful."

Take the initiative by looking at things from outside the box and experimenting with different approaches and strategies. Remember: A good leader gets people involved and gives them both Reality and Hope. Go forth and lead.

Using the free business networking service, Linked In, you can join the discussion. Go to www.linkedin.com and join The Mahler Co., Graduates and Friends.

With best wishes for your success in the months and years ahead,

The Mahler Faculty
info@mahlerco.com

1. Ram Charan, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times, McGraw-Hill, 2009.
2. "The Seasoned Executive's Decision Making Style" by Kenneth R.
   Brousseau, et al., Harvard Business Review, February, 2006; HBR Reprint R0602F
3. http://www.psychologymatters.org/hardiness.html
4. William Bridges, Managing Transitions: Making the Most of Change, 2003, William Bridges Associates, Inc.
5. Harvard Business Review, September 2002
6. A Complaint Free World: How to Stop Complaining and Start Enjoying the Life You Always Wanted by Will Bowen, 2007

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Group 2009-2

Week 1

Oct. 19-22, 2009
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