LESSONS FOR CEO

Almost all organisations go through turbulent periods, during which their core capabilities areseverely tested. The turbulence may be caused by factors such assignificant events in the market-place, economic upheavals, dramaticinflection points in the technologies that drive the business, sharpchanges in customers’ needs, game-changing strategies implemented by acompetitor, leadership upheavals within the organisation itself, and soon.

These periods can be called “defining moments” in a company’shistory — when the strategies and actions of the CEO, and the manner inwhich the organisation aligns itself to the change strategies,determine whether it can weather the turbulence and continue on itsgrowth path.

CEOs under pressure
This is a time of unprecedented economic uncertainty andgovernments are trying to co-ordinate the timing of various financialstrategies, to maximise their beneficial impact worldwide. “Bailout”has suddenly become the buzzword in business dailies.
The US economy is officially in recession, with negativeconsequences for countries as diverse as India (primarily in the caseof its IT services industry) and China (for its manufactured exports).Europe and Japan have slowed down significantly. Falling oil prices inrecent months have impacted Russia’s revenues, which are heavilydependent on oil and gas exports.
Overall, popular wisdom has it that the global economy willget worse in 2009 before it gets better in 2010 at the earliest. Thecurrent period could well qualify as a “defining moment” for manyorganisations, large and small, worldwide. On a much larger scale, itcould also prove to be a defining moment for many countries and theirgovernments.
Markets are shrinking, customers are cutting back,shareholders are nervous, and CEOs are under pressure to “do somethingdifferent” to keep companies afloat. “This is the way we have alwaysdone things here” is not acceptable anymore – look at the sharpreaction to the CEOs of the US Big Three automakers using corporatejets to fly to Washington to plead for bailout. “We need to change ourbusiness model” is an emerging theme — except that most organisationstypically exhibit significant resistance to change.
Under these circumstances, the CEO has to step up and takecharge quickly. Here is where Barack Obama and his election campaigncome in.

Obama and change
The US President, Barack Obama, won his election on a simple and powerful message of “change”.
The context for this change was two-fold — growing opposition tothe Bush-era policies and actions both at home and abroad, and thedeepening crisis in the US economy. The US was beginning to experienceits own “defining moment”.
Given this background, Obama’s strategic intent is clear. Hewants to change the way the US is governed, and the way the economy ismanaged; he wants to change the industries in which future jobs will becreated; he wants to change the manner in which the US responds toenvironmental issues and global warming; and he wants to work withother governments and countries in a collaborative fashion — and notforce US’ views on others by sheer muscle power.
Taken together, this represents a fundamental and strategicchange for the “American way” as a whole, both within the country andinternationally.

If we look at the US government as an organisation, and BarackObama as its CEO, the shareholders are the US citizens. Obama hasworked relentlessly over the last one year on communicating hisstrategic change message to all his shareholders, and the electionresults show that a majority of them have aligned themselves to thischange.
He realised the need for a committed and energeticorganisation at the grassroot level. He zeroed in on the young voters(who were known, till then, for showing little or no interest inpolitics) to be the “agents of change”.
Obama signalled his commitment to his change strategy by actingquickly on the first step — the appointment of key members of hisleadership team — months before even assuming office. Hitting theground running, as he has done, is a message in itself — that thesituation is grave, and that there is no time to lose.
By appointing several knowledgeable but strong-willed peopleto key positions, he has made it clear that he is confident about hisown leadership skills in managing a talented but disparate team. He hasalso demonstrated common sense and humility in seeking expert help inareas, which are not his forte.
And he stuck to his campaign and his theme in spite ofdistractions, in contrast to John McCain, who suspended his electioncampaign to make an abortive dash to Washington, when the $700-billionbailout package came up for discussion.

10-point game-plan
The current global economic turmoil is forcing manyorganisations worldwide to do some fundamental introspection, and drawup their own strategic change maps.
If we now look at the critical role of the CEO in defining andimplementing such strategic change initiatives, there are severaloperating principles in Obama’s election playbook that are worthemulating:
Analyse and understand the global and local context for change.
Tune in to shareholders’ expectations, frustrations and values. Ignore them at your own peril.

Take the time to formulate the strategic theme. This is the single most important step in the whole exercise.
Stick to this theme right through, notwithstanding distractions that are sure to pop up.
Create a strong leadership team, where each member brings “best-in-class” knowledge and wisdom to the team.
Learn how to manage a team which doesn’t always say, “Yes, you are right”.
Communicate — in a consistent and clear fashion.
Make smart use of technology to spread the message, but do not let technology become the message.