In our age of failing economy, what is the key to success? During every financial crisis, there are always companies that thrive. History reveals the companies that thrive share one common thread. They innovate. They do not sit idle. The fastest and most effective way to deliver innovation is to have great leadership. Is a lack of effective leadership at the core of this economic crisis? Companies win awards for human capital utilization but show no improvement in bottom line results. Are you certain you have great leadership? Redefining and establishing great leadership will be critical in the coming months.
In my experience, leadership performance is absolutely what separates successful from not-so-successful companies. Many companies I’ve encountered have come nowhere close to maximizing their leadership assets. This is about innovating in crisis and, even better, before a crisis can occur. Look to leadership and your people the same way you would a process; it’s all asset utilization. Teams, Lean, and Six Sigma -- why are they working in one plant or in one company, yet not in another?
Throwing money and more processes at companies will not work. Recently, many experts have stated that the demise of companies, such as Ford and GM has been due to the performance of their leadership. Where was this evaluation five years ago? I believe these companies thought they were indeed measuring leadership. They certainly had used teams, Lean and many other processes as well.
The key is an innovative approach to leadership. An engineer I know encountered a problem in the early 1990’s. He was faced with the challenge of reducing a complicated changeover process time from seventeen hours to less then eight. Many of his coworkers and industry experts told him his company was trying to squeeze blood from a turnip and it simply couldn’t be done. Eight years later the same engineer was trying to get the same process down to less than twenty minutes. Now that’s innovation! It can be done.
The lesson of this story is that there is so much money in the midst of troublesome financial times just sitting on the table. That is shameful. It also means there is great opportunity.
There’s always room for improvement
Leaders cannot keep looking at leadership as if there’s no room for improvement. Over 96 percent of 1,000 top performing leaders we surveyed place the leadership above them as one of their top three concerns. Additionally, 86 percent place the leaders they work with as one of their top three concerns. Incredibly, companies frequently tell me leadership is not one of their major concerns.
Performing leaders produce results, directly equaling more net profitability. So, how do you get more net profitability? You improve your leadership capabilities. The problem is that many firms self-assess their leadership, which is like making your own medical diagnosis -- not very wise.
A third party that offers a leadership paradigm based on core values often found missing, but proven necessary in leadership today is the first step in evaluating your leadership. But an accurate assessment is only the beginning. Education and continuous training of both traditional and cutting edge concepts are also necessary to improve leadership.
These are challenging economic times. The coming years are going to be very difficult. A large number of companies are going to fail but an equally large number can succeed. They will have tried many approaches, but leadership performance is the largest opportunity for success sitting on the table. It is highly unlikely companies will be able to capitalize on their other assets without effective leadership.
John Casey of Shamrock Consultants has spent 24 years assessing, coaching and improving top leadership at a number of the best and most successful Fortune 500 companies. For more information visit: www.shamrockconsultants.com