NEWS

Notes from an Extraordinary Event

Business leaders need to maintain their strategic direction amid the unprecedented economic turmoil, according to business executives and representatives of Sheppard Moscow and the Corporate Research Forum (CRF).

Sheppard Moscow has been helping to develop leaders for over 30 years and our consultants now work with major organisations and leaders around the world. As a result, Sheppard Moscow brings important insight to the global economic crisis.

Introduction

At a specially convened London seminar organised by Sheppard Moscow to discuss how business leaders and executives should respond to the economic crisis, several delegates referred to ‘blind panic’ among younger managers who had never experienced a recession; while a long-established company said it was making compulsory redundancies for the first time in its history.

However, introducing the event, Sheppard Moscow consultant Sandra Hilton pointed out that many great companies such as Hewlett Packard and Microsoft were founded in periods of serious economic problems (1939 and 1974). Opportunities can often arise in recessionary conditions and the economic cycle is not the only force that determines the business context; there are new technologies and demographic shifts.

Sandra’s introduction was followed by a conversation between Sheppard Moscow partners, Liz Crede and Roger Vicarage, highlighting the need for open and frank conversations and setting the tone for the day’s round table discussions. This was followed by CRF Directors, Gill Grant and Mike Haffenden, discussing their reflections on current events.

The floor was then turned over to A ‘World Café’ style event facilitated by Sheppard Moscow which allowed the delegates, representing twenty major UK and international companies, to discuss their feelings, opinions and individual business challenges.

After lively conversations, key themes were highlighted:

Firstly, it was noted by everyone just how useful their conversations had been. There was clearly a universal need to find meaning, share experience and simply to talk.

Calling on nautical metaphors (appropriate as the event was held at Trinity House - the City of London’s historic maritime centre), Steve Bridge commented how a great deal of Sheppard Moscow’s work entails helping organisations and individuals to establish a clear sense of value and purpose which act a rudder to steer them through uncertain or stormy conditions. He also commented that the unfortunate tendency to “batten down the hatches” during a crisis means that organisations end up entirely at the mercy of the elements, drifting “wherever the storm leaves them – and lost when the storm passes.”

Following on from this point, delegates agreed that cost cutting was never sufficient as a way forward. Once non-essential expenditure has been taken out, staff will be looking for a way forward. Organisations must avoid cutting the very initiatives that could provide the keys to the future.

It was agreed that businesses need to show courage in sticking to the strategy – assuming that the strategic path still made sense in a changed climate – and to avoid what Roger Vicarage of Sheppard Moscow termed the ‘under-11 football syndrome’. This is the tendency for everyone to chase the one fashionable issue while neglecting the others. “You need to stay in position!” he said

Organisations must ‘break the handcuffs of fear’. If people are afraid, innovation and creativity will suffer. Clear, inspiring leadership is more vital now than ever and people are more ready to be inspired.

There was also criticism that the rhetoric from many commentators was too pro-cyclical; cheer-leading the boom despite the problems that it brought, and becoming doom-laden during the recession. Both Shell and Tesco had posted strong results in recent weeks – record profits and like-for-like growth respectively – that received a negative spin in the business pages.

There is a greater need than ever to tap into the energy and motivation that is latent in organisations and to focus this discretionary energy. This was particularly relevant in reaching and motivating ‘Generation Y’ employees to whom the current situation is utterly alien.

It was agreed that there would be no ‘one-stop’ solution, or initiative, for this crisis. Organisations needed to:
Determine their specific organisational issue and to align their leaders to it. Then, to apply practice steps that are relevant to that issue i.e. applying ‘good practice' – not ‘best’ practise as there isn’t going to be a ‘fixed’ answer or a right way ahead. Flexibility is key.

Mike Haffenden of the CRF, reported that leaders need to communicate even more than usual with staff, and to maintain an honest dialogue. He also questioned whether organisations genuinely managed performance, which ought to be a key priority for businesses in all economic conditions. “Are you really sure that in your top 50 jobs you have your top 50 people?” he asked.

The event made very clear the need for executives to talk and to share their thoughts and challenges, and it was agreed that a prime role for leadership is now to facilitate and encourage meaningful, true two-way, conversations (not relying on email!) and, as well as maintaining a strong dialogue with staff, leaders need to talk intensively with customers and suppliers, to enable responsiveness within the organisation as the context evolves.

It was also agreed that, while the current situation may cause a great deal of hardship, a change in the conversation regarding leadership, corporate expectation and the meaning of working life, could facilitate a new and ‘more human’ way ahead. HR’s potential role in this future was seen as of great importance.

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