How do you effectively maintain service levels when you're headed into a recession?
—Rob Chiuch, Toronto, Canada
Given the fact that everyone from Ben Bernanke, the chairman of the US Federal Reserve System, to the corner grocer is predicting a slowdown of some level or another, we were expecting some recession questions.
Jack and Suzy (Malay Karmakar/Mint)
Thanks for picking service as the focus of your query. You’re on to something important. No matter how bad the economy gets, your company’s response to it should show up last, if at all, in its relations with its customers.
Instead, its response should show up first, and for as long as possible before the next upturn arrives, deep inside the organization—in its gut, where all the fat is stored. We know what most people are probably thinking right now—their businesses don’t really have any fat, and cuts will go right into muscle. They are thinking, “With all the competition we have been up against for the past few years, we can’t get any leaner.”
But you can, and you will. Because you do have fat.
Indeed, virtually every company does, thanks to the past several years of sustained growth. Call it Recovery Poundage Syndrome. Whatever: It’s not new, and it’s unavoidable. The challenge, as a leader, is to know where to start looking for it. The telltale signs are myriad. A headquarters parking lot with a growing shortage of spaces. A company cafeteria with longer lines.
Now, everyone knows that headquarters does not make or sell anything. It’s just overhead.
But during good times, staff functions in particular tend to “put on weight”, with the addition of data gatherers, report writers, programme analysts, and the like, most of them doing not a lot more than adding up numbers around the latest management fad.
Even research and development (R&D) is not immune to excess. During growth periods, managers sprinkle money on all sorts of non-essential projects that seem like good ideas at the moment. With a recession looming, it is time for rigorous prioritization.
Similarly, businesses accumulate consultants when the going is good. We’re not going to denigrate consultants: They can be useful for clearly defined projects. But a fat-cutting mission calls for a close scrutiny of every contract. If your outsiders are not paying richly for themselves in added productivity and ingenuity, it may be time to say goodbye to their monthly bills.
Boom times also tend to give rise to an enhancement, shall we say, in the quality of company gatherings. Normally, one simple off-site retreat a year does it. With a long expansion, companies somehow find a way to go to two or more, in increasingly exotic locales.
Look, we enjoy these excursions as much as you do. But before people can complain that their company is slicing muscle, such expense multipliers have to go.
To be clear, we’re not saying that, down the road, there won’t be cuts that cause pain. Every recession takes a real and painful toll. But given the natural plumping that goes on in long growth cycles, it will be a good while before companies get all the fat out. In the meantime, leaders cannot fall back on the all-too-common approach of across-the-board cuts that trim where they shouldn’t.
Stay focused on your customers. You may be on a diet, but they don’t need to know it.
I have just been promoted to lead five people. What is the best way to develop my own management style?
—Martin Munga, Nairobi, Kenya
One tried-and-true approach is to try a few management styles and see what works. Surely, you already have a sense of how you want to lead. Use that style first, then tweak it relentlessly as you see its effectiveness. Are your people motivated? Are your results where they should be?
Second, seek mentors everywhere. If you know someone inside or outside your company who hires well, pick his brain every chance you get. If you see someone give a great speech, follow up to ask for advice. Consider magazines and books mentors, too, along with training courses of every sort.
In short, resist the standard advice to fix your eyes on one person as your ultimate role model. Be open to learning from everyone, everywhere. Before you know it, people will be learning from you.
Write to Jack & Suzy
Jack and Suzy are eager to hear about your career dilemmas and challenges at work , and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Campaign readers can email them questions at email@example.com . Please include your name, occupation and city.Only select questions will be answered.
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