One of my resources clients recently shared his observations after returning from a marketing conference and from a series of meetings with many of his customers. The message was loud and clear: the ‘stronger for longer’ mantra of the resources sector is now ‘stronger no longer’.
What now? Of course, most resources executives know ‘what’ to do: cut capital spend; cut exploration; reduce travel; reduce headcount; drive productivity. But the real leadership challenge is not ‘what’ but ‘how’.
Here’s some of the ideas I offered from the perspective of an organisational strategist.
1. Establish a decision framework (goals; principles; boundary conditions) that provides a common platform for the leaders of the business to make the ongoing decisions required. Your goal might be as simple as the cost positon needed for survival. The principles might include concepts such as ‘no high grading’ or ‘maintain optionality’. And the boundary conditions are your non-negotiables. But be clear about the non-negotiables (eg. safety). But remember it is the outcomes that are non-negotiable: the ‘how’ must remain open to challenge.
2. Engage everyone. The first reaction of the strategic leadership team is to do the top down work – and that’s fine. But ‘top down’ won’t win this battle. Now you need to engage everyone in the battle. In many ways, this is a relatively easy leadership task: most of us have felt the camaraderie of a tough fight. But be sure the enemy is ‘the market’, not each other. Central to this is be sure there is equity across the organisation in terms of who makes sacrifices. And if we ask people to make a sacrifices is there an upside when better times return (the old line: they’ve still got a job is hardly the stuff of engagement).
3. Accelerate the shift from intent to imperative. As the armed forces say, ‘No plan ever survives first contact with the enemy’. The ‘assess >> decide >> execute’ cycle needs to shift from 50/30/20 to 20/10/70. And if I applied this principle to only one dimension of my business, it would be my front line leadership. Remember the times you’ve sat around lamenting the quality of some of your leaders … now is the time to move. Apply the ‘Netflix keeper test’. If one of your leaders said they were leaving would you fight to keep them on your team? Especially those on the front line, but everyone should be put to this test.
4. Communicate strongly and consistently. One of the key roles of any leader is to absorb uncertainty so that the people at the next level can focus on their role. This doesn’t mean you should offer Pollyanna like promises – they don’t expect you can turn back the tide of global markets – but it does means you need to be able to explain what’s happening, the basis of decisions. Unfortunately my research shows that 50% of the personal factors that people felt held them back from being better leaders was the quality of their communication skills. And a recent HBR article reported that fewer than 1/3rd of the senior managers can connect the dots between strategic priorities: this plummets to 16% for frontline supervisors and team leaders. Your leaders will need help to get this right.
5. And live the values. Do we ever wonder why employees so often end up cynical and jaded by the various organisational initiatives we push in the good times around leadership and values. “People are our most important asset” is hard to ‘live’ at times like this. I’m not suggesting that executives too often act capriciously – although undoubtedly some do – but even when we do act in concert with our organisational values, it’s not at all clear to the people who work in the organisation. My client has spent 2 years embedding some really good work around these constructs. My counsel: hang on to this and use it to guide conversations and decisions.
As you and your team confront the difficult decisions, remember the advice of the guru of emotional intelligence:
“No matter what leaders set out to do their success depends on how they do it”
(Daniel Goleman: Emotional Intelligence)