The 10 Critical Elements For Success In Volatile Times
LEADING ON THE EDGE OF
CHAOS
(Emmett
C. Murphy and Mark A. Murphy/Prentice Hall/
2002/226 Pages/$26.00)
국내 미출간 세계 베스트셀러(NBS) 서비스는 (주)네오넷코리아가 해외에서 저작권자와의 저작권 계약을
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정리한 요약(Summary) 정보입니다. 저작권법에 의하여 (주)네오넷코리아의 정식인가 없이 무단전재,
무단복제 및 전송을 할 수 없으며, 모든 출판권과 전송권은 저작권자에게 있음을 알려드립니다.
LEADING ON THE EDGE OF CHAOS
The 10 Critical Elements For Success In Volatile Times
The Big Idea
A timely book for today's chaotic economy, the Murphy's suggest 10 key strategies for
business leaders. If you fail to deliver, a volatile market can be terribly unforgiving. How
you handle uncertainty will determine your company's success.
For more on Leadership visit http://www.MurphyLeadershipInstitute.com
Chapter 1 MAKE HASTE SLOWLY
Rule 1: Resist the lure of "ready, fire, aim"
Managers may feel the need to spring into action and hit targets before properly thinking
about the direction the company is taking.
Some practical strategies for making haste slowly would be to watch the clock. This
means you must treat time as a resource and performance metric just like money is.
IBM accelerated the way it did business by way of using a "speed team" which
comprised of 21 innovative thinkers and leaders within the company who completed
projects unusually fast. Their assignment: Get IBM's IT team to develop more
Web-based applications. They moved fast in the right direction. It's not about doing the
same thing. It's about changing the way you do things.
Rule 2: Aim at multiple targets -now.
Prepare your team for all possible scenarios, not just one likely scenario. In a volatile
and chaotic economy, nothing is certain; therefore high-performing leaders must take
aim at a variety of possibilities and hit the ones that bring more profit.
Rule 3: Pace yourself
Just like runners have techniques at running a long race, pacing themselves in the
beginning so they have energy for the final 100 meters, a company must find the right
goal. Without the right goal working more hours and hiring more people would be futile.
Rule 4: Find a center that can hold.
Focus. Focus. Focus. Companies that enjoy long-term success are those with a strong
sense of purpose. Many companies only pay lip service to their mission and vision
statements. Take Enron. There was no real sense of values in that company. Individual
gratification and greed brought the company down and in the end there was absolutely
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no credibility left to hold it together.
Chapter 2 PARTNER WITH CUSTOMERS
What exactly does partnering with customers mean? There are 3 models of customer
partnership: the egoist, bureaucrat, and CAP or customer-as-partner model. The egoist
only thinks of business in terms of a one-way communication. The bureaucracy has so
much going on internally to the point it excludes (and frustrates) its own customers. The
Customer-as-partner model allows for a two-way dialogue. Customer partnership is a
shared journey to create a future for both parties that is better than either could have
developed alone.
It is important to note that acquiring new customers is costlier than retaining current
ones. Customer retention and satisfaction drives profits.
CAP checklist:
•
Does staff regularly involve customers in the R&D process?
•
Does R&D seek feedback from other departments during a product
development cycle?
•
Does the sales staff feed information to other departments regarding changing
customer needs?
•
Does marketing continually identify new areas of buyer need?
•
Do they constantly suggest new offerings for existing customer segments?
•
Do billing and collections strategies strain or build customer relations?
•
Do your people understand the profitability of various customers?
•
Do you continually strive to improve quality, speed, and cost of the service?
•
Do people understand how the end-user benefits from your product/service?
Partner with your potential customers. High performing leaders recognize that potential
customers are a great opportunity, and shouldn't be ignored during the good times. Find
out where your potential customers are hiding, whether you conduct free trials or give
out gift certificates. What's important is you discover them. Don't wait until times get
tough to tap in to their wallets.
Partner with your lost customers as well. Always conduct some sort of exit interview to
find out what went wrong and why you couldn't serve their needs well. Often, customers
threaten to walk away to test your commitment to them.
Effectively increase wallet share through customer partnerships. This means that you
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don't just give them what they want. You also give them what they didn't know they
needed. Nike didn't just supply running shoes to its customers, it also gave them
apparel, heart rate monitors, MP3 players, and sports watches.
Let go of "poor fit" customers. In times of high volatility, "firing" unprofitable customers is
a great cost-saving device. Take a "gut check". If you feel you are compromising your
own integrity, then it's time to quit. Customers who are a poor fit to your organization's
values will be unprofitable in the long-term even if they seem profitable in the short-term.
Practical strategies for customer partnership:
It's important to remember your customers always have choices. Some industries feel
self-righteous and believe their services are indispensable.
Your organization needs to honor what the frontline employees are saying.
High-performing leaders take the initiative to discover what customers really want and
then provide it. They share this with the entire company. Institute small changes for
huge outcomes. Find the magic in your products so you can delight your customers. If
you are a hospital, maybe sensitivity to customer's feelings is your edge, for instance.
Chapter 3: BUILD A CULTURE OF COMMITMENT
"A purpose is the eternal condition of success".
-Theodore T. Munger
How do you measure commitment and purpose?
A destructive culture usually has high turnover (especially top talent) has difficulty
attracting new talent, high labor costs, and low staff morale.
A coincidental culture has a sense of purpose but with inadequate people. Many
hospitals exhibit a coincidental culture. Staff is not motivated to hit performance targets;
they rely on the intrinsic value and passion of staff to deliver high quality.
In troubled times, a coincidental culture can break apart.
"It's not you It's me Culture" is so named after the famous break-up line. Some people
and organizations just don't work well together. Employees may understand the
company mission but their own personal values don't match their job requirements.
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A committed culture is one where both purpose and people meet and work in a good fit.
People understand the vision and are rewarded for making it happen.
Where does your organization stand in terms of commitment?
Here are some techniques used to create a shared purpose:
•
Orientation and training programs that emphasize corporate values
•
Social gatherings
•
Storytelling events and corporate histories that dramatize guiding values
•
A unique, shared corporate language that reflects these values
Chapter 4 PUT THE RIGHT PERSON IN THE RIGHT PLACE, RIGHT
NOW.
Although it is somewhat a business cliche to compare a company team to a sports team,
we are going to use it again because it makes sense. In a knowledge economy, talented
people have choices to go where they please, and your people should be treated like a
valuable sports team. Employees who have what it takes to build a great company with
you shouldn't be taken for granted.
•
Know what you're looking for!
•
Don't fill up empty chairs with the people who are on the layoff boundary just for
the sake of filling up the bases
•
Look behind the resume. Some people are great at getting hired and look good
on paper. The actual delivery of a job is what is important. Dig deep into their
work histories, and we mean asking about their first job ever.
•
Check the references personally. It only takes a few minutes of your time over
the phone to find out how former employers feel about your candidate.
•
Look beyond the obvious choices. Some employers overlook highly qualified
candidates simply because they want to hire clones of themselves. Maybe you
are only impressed by people who look like they are not too serious, and like to
have a lot of fun. Think about why you hired people in the past.
Chapter 5 MAXIMIZE KNOWLEDGE ASSETS
September 11, 2001 was a clear example of how organizations like the FBI, INS, CIA,
and Federal Aviation Administration failed to identify a possible terrorist threat. Lack of
translators for hard data, slow movement, and a mismanagement of information all led
to the terrible attack of 9/11.
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With your company, it may not be a matter of life and death, but you will lose money,
customers, and your competitive edge if you don't maximize your knowledge assets.
What are these? They are patents, faxes, documents, and email - your organization's
total intellectual capital.
•
Identify and eliminate organizational practices that promote knowledge
hoarding and punish knowledge sharing
•
Involve all departments in developing a culture that rewards knowledge sharing
•
Integrate special projects with the core business so people don't treat it as a
"flavor of the month"
•
Teach people to share information through Intranet, videoconferencing, and
centralized databases
Chapter 6 CUT COSTS, NOT VALUE
First, confront your financial reality. Draw a financial reality chart. Plot your past, present,
and estimated future revenues. Next, plot your past, present, and future expenses along
the same timeline. This will clearly show you if you need to start moving and building
profit.
•
You cannot save your way to profit. Sometimes you need to spend money on
technology or IT systems, for instance, in order to save money in the long-term.
•
Do not invest in low-return projects
•
Aim for high-return opportunities. This means for example, you don't cut down
on the slices of meat in the cafeteria. You might save a whole lot of money
redesigning the layout of the cafeteria or the food preparation process. Maybe
you should fire an unprofitable client and get better-paying accounts instead of
letting go of some of your employees.
•
Anticipate your upcoming cash expenditures. In times of uncertainty, conserve
cash.
•
If you choose debt to raise cash, you will not only face interest payments, you
continue to drain on cash that could prevent future investments
•
Achieve a balance between payment of payables and conversion of receivables
to cash.
•
In times of volatility, companies with strong cash positions will have better
analyst ratings, bond ratings, investor support and borrowing rates.
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Chapter 7 OUTPOSITION YOUR COMPETITORS
•
Measure demand. This is simple and critical in volatile times. It may be difficult
to accept, but acknowledging there is no demand for your offering and facing
the truth will help you find other opportunities.
•
Know thy competition, from the obvious rivals to the upstarts (never
underestimate these) to the unforeseen rivals. When you are experiencing good
times, chances are you are not paying attention to the other players in your field
who are quietly taking away your market share.
Practical strategies for strengthening your competitive position:
•
Take a multidimensional approach, aim for more advantages than just price and
quality
•
Align the advantage with practice. Choose your main source of advantage and
align the entire organization to support it
Chapter 8 STIR, DON'T SHAKE
How do you keep your team motivated? Even the most mild-mannered leader can lose
it and say negative hurtful things that add pressure and stress to an already volatile
situation.
Be vigilant for signs of stress. When things are getting too heavy, close the office and
take everyone out bowling. Ask people how they are doing, and be open to what they
are feeling. Don't punish them for expressing how they feel.
Signs of team stress: low morale, increase in sick-day usage, increase in complaints
and grievances, increase in illnesses or injuries, increased turnover.
Signs of individual stress: headaches, avoidance, difficulty concentrating, overreacting,
short temper, depression, and lackluster performance.
•
First identify the root of the problem, whether it is personal or organizational.
You need to build a healthy level of stress in the workplace, where challenges
are given to people in such an amount that they can still feel they have control
over their work.
•
Act calm in the face of chaos. If your team sees you are not in a panic, then they
will think that maybe the crisis isn't that bad.
•
Make time for humor and play. Nothing removes stress like a good joke and a
little fun. It lifts productivity when you break the steady routine or cycle of
anxiety. This is one area where you can put on your creative thinking hat and let
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loose.
Remember, it's ok to give yourself a break. If the problem occurs on a Friday but
resolving it can wait until Monday, then just let it go and tell your staff to have a good
weekend.
Chapter 9 CUT THROUGH THE NOISE
We experience communication breakdowns mostly because of interference, cross talk,
attenuation, and glitches. Interference happens when people intentionally disrupt
meetings, "forget" to pass on valuable information, and sometimes use outright defiance.
Cross talk happens when a leader's message is drowned in all the other messages.
Learn to simplify, amplify and clarify yours so it is the one that gets heard.
Attenuation is when the message is so filtered down from the top that by the time it
reaches people down at the frontlines, it is no longer the original message.
When you communicate with different types of people, you need to fashion your
message in the way that they will understand it according to their own communication
style. Some are rational types, functional, personal (emotional) or intuitive. Rational
communicators are more linear, structured, analytical and data-driven. Functional types
value planning, decisive action, tangible and immediate results. Intuitive types focus on
the big picture or the future and value concepts and imagination. Personal
communicators are focused on the human side of the issue.
Rapid response is the key to communicating in a crisis. When Odwalla juice was found
responsible for the death of a toddler in 1996 due to E-coli, CEO Stephen Williamson
ordered a complete recall of all products, stayed in touch with his people during the
whole crisis, accepted responsibility for the safety hazard, and publicly acknowledged
their mistake. It was an expensive crisis in the short-term, but the public trust in Odwalla
was quickly rebuilt because it didn't try to deny, or hide its mistake. The company paid
dearly, and by changing its "no pasteurization" policy and adhering to FDA's safety
standards, Odwalla soon got back on its feet.
Chapter 10 FOCUS OR FAIL
•
Define the challenge and measure the organization's readiness to meet it.
•
Establish a vision for meeting the challenge
•
Plan for leverage with high-impact opportunities
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•
Implementation means constantly adjusting short and long term goals
•
Test, refine, and repeat. Act like you only have one chance to get things right
the first time.
Four key rules all leaders must put into practice when bad things happen:
•
Understand the threat
•
Plan for crisis
•
Adapt on the run
•
Live the experience of your people (Remember how New York mayor Rudy
Giuliani was almost killed himself when the World Trade towers came tumbling
down?)
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[세계 베스트셀러(NBS) 서비스는 영문의 경제·경영 및 정치 서적의 베스트셀러, 스테디셀러의 핵심 내용을 간략하게 정리한
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