How can your corporation emerge as a market leader in this time of economic hardship? And how can you contribute to that emergence? 

In this newsletter, we focus on smart risk taking by smart leaders. We highlight how to build a strategic understanding of where your organization is headed so you can take calculated risks that will reap great rewards for you and your organization. 

Why? Recessions magnify our fears. In this environment, protecting short-term results by minimizing risk—cutting back, for instance, on promotional, advertising, development and other expenses—may seem prudent. 

But we also have to keep in mind that market leadership depends upon competent, strong leadership within the corporation, and that this kind of leadership depends in turn upon effective risk assessment practices, not on risk avoidance.

In other words: don't avoid risk, take smart risks. We'll show you how.

Let's get started!

Your Partner in Success,

Charmaine McClarie

President, McClarie Group

Learning from Leaders: How to Emerge as a Market Leader in Tough Times

This past year I’ve interviewed senior level executives and CEO’s of several major corporations about effective leadership during tough times.  A common theme has emerged: now, more than ever, is the time to make bold moves, to innovate and to take smart risk. 

Jeff Nally, organizational developer and executive coaching practice leader at Humana Inc., the Kentucky based health insurer, says, “Even in a recession, developing talent in key roles is still important.”  Proving the point, this year the company is investing in executive coaching sessions for 50 if its senior executives, each program costing from $17,000 to $30,000 dollars.  This is strategic risk, and it’s the right thing to do.  In fact, Watson Wyatt's 2009/2010 Strategic Rewards Report forecasts that companies’ actions taken in response to the economic downturn may actually have negative effects if steps towards re-engaging their top-performing employees aren't taken.  Yet, employee engagement in the last year, according to the report, has dropped nine percent for all employees and up to 25 percent for top-performing employees.  The most severe cutbacks, it should be emphasized, have most affected the high performers that the corporation most needs to retain.

This kind of “prudent” cost-trimming can ultimately prove to be expensive.  In economist James Surowiecki's New Yorker column, The Financial Page ("Hanging Tough," April 20, 2009), he points out that  in general companies that have taken the calculated risk of spending on acquisition, research & development and advertising during recessions do markedly better than those that made big cuts.  Apple launched the iPod in 2001, in the midst of a brutal high-tech market meltdown.  Kellogg introduced Rice Krispies in the deepest trough of the 1930’s Great Depression.  Both companies not only weathered the storm of their day, but they also emerged as market leaders.

However, Surowiecki also points out other companies that have taken apparently similar risks and failed, and these are companies whose names we do not remember.  What is the difference between success and failure?  Surowiecki cites several economic studies that point to the necessity of risk-taking in hard times; when companies maintain or increase their advertising, for example, they see their sales hold up far better than companies that don’t.  But the risks taken must be strategic and must be based upon reasonable, consistent and, so far as possible, quantifiable assessments of risk.  Risk assessment must be a part of company practice, not a decision first made in the midst of a crisis.

An instance of this kind of smart risk-taking is the performance of Cheryl  Bachelder, CEO of AFC Enterprises and President of Popeye’s Chicken and Biscuits, who has implemented many changes to the signature brand even as the company has moved through the recession, and who has succeeded brilliantly despite the economy. AFC stock has doubled from last year.  She recommends her own practice to other companies: "focus on the market share, invest in the future, and develop your people," especially in tough times.  This is “smart risk.”

Now, let’s talk about how you can contribute to your organization’s emergence as a market leader in tough times.  It boils down to two things, really: first, understanding your organization’s current situation and needs, and second, making sure your personal development strategy within the corporation matches your corporation’s situation and needs.

Let’s first take a look at your organization’s current situation and needs.  Where do you start?  One good place to begin is with the quarterly report.  A careful reading of the quarterly report will give you a wealth of information that many employees,  sometimes even senior level employees not yet in the executive suite, neglect to absorb and take to heart.  What may be appropriate risk for a company with a healthy cash position and growing sales in this recession is obviously not appropriate for a highly-leveraged company with struggling sales and lots of debt.  You need to know your company’s current situation in real depth to understand what kind of risk is appropriate. Think like a CEO and develop a strategic understanding of your company’s strengths and weaknesses. 

The quarterly report will answer many questions—and will provoke others.  One excellent way to find answers to these further questions is to listen to the conversation between your CEO and the company’s market analysts during the quarterly report call.  Listen to  the analysts’ cross-examination of your CEO; this fleshes out the quarterly report and paints a bigger, often more objective picture of where your company is going, and it will help you determine how you fit into the larger picture.  When listening to these calls, think strategically about how your company’s direction will impact you and how you can contribute to your company where it needs you most.

You may realize that the project you are working on won't likely go anywhere or that you'll need development in a certain area to really align yourself with the company moving forward.  Or you may see an opening for your own personal development in the company that exactly matches your company’s current needs—even before these needs are widely understood. Every client I’ve worked with who has followed my advice and started listening to these analyst reports has been more on target and ahead of their peers—the only place you want to be during a recession. 

Lastly, let’s revisit this problem of shrinking support for executive development in hard times. Smart leadership anticipates this problem and works actively to counter it, as was the case with Humana and AFC Enterprises.  Other companies, and yours may be one, will need a nudge.  Once you understand your company’s forward direction, you are in the best position to leverage the organization for professional development resources that will move you forward and up.  Because you understand what will benefit both you and your company, you can make the best case for your own personal development, whether leadership training or some other professional experience that your company will support because it will benefit you both. Is this manipulative, or self-serving?  

Consider this: your company isn’t keeping track of how much they’ve supported you over, say, another co-worker.  On the other hand, they definitely are keeping track of how much your activities support the company.  Now is not the time to ask for (or deliver) less; now is the time to be bold, innovative and strategic in pursuing both your company’s best interests and your own.  Remember, recessions create opportunities for corporations and corporate employees alike.

To learn more about McClarie Group's workshops, keynote speaking, and coaching around smart risk taking, contact us at: (323) 224-6820.

Speaking of Success Tip #13: How to Build the Case for Your Professional Development

As we discussed above, building the business case for your professional development is about having a solid understanding of your organization's needs and direction and being able to link your development to your organization's strategy. Once you have built your business case, your next step is to effectively communicate it. Here are a few tips:  

• Make explicit the link between the strategy of the organization and your development plan. Focus specifically on the leadership qualities and skills that will be needed to execute on your organization's strategy and link them to your professional development. For example, you might say, "As our organization starts to pursue an aggressive growth strategy, building our customer base will be essential. This means my department will need to adopt a consultative selling approach to be successful. My team needs to be trained in this  approach and I will need support in leading my team through this fundamental shift in how we engage with our customers." 

• Focus on the outcomes, not just the process. What can the organization expect as a result of the investment in the leadership training or executive coaching you are considering?  Write down what are 1, 2, or 3 clear take-aways that you expect from the investment in your professional development—from an organizational perspective. If you are not clear on this point yourself, this will  come across in how you communicate and will detract from the effectiveness of your message. One tip I suggest to my clients when they are evaluating different training programs or other professional development needs is that they call up the professional development providers and ask explicity: "What are 3 things I can expect to take away from this program?" The answer will speak to the value of the program and then help you do the same internally.

• Identify strategic witnesses for your development. Who in your organization will clearly see the connection between your development and the organization's strategy? Build allies who will lend their support to your professional development plan before you lay out your plan to the appropriate decision-making party. This shows not only that you have a well-thought out plan, but also that you already have the organizational support you will need to succeed in your development steps. It also means you will have witnesses to your development, who can later advocate for the steps you are taking to help move the organization forward.

This month only! Build Your Skills with Charmaine's  Communication, Charisma, and Command Course

Invest in yourself this month and take advantage of the rare opportunity to enroll in a McClarie Group open workshop:  "Communication, Charisma, and Command: Harnessing Your Ability to Speak and Be Heard."

• Go from invisible to visible
• Effectively communicate up, down and across the organization
• Increase communicative self-awareness and build your competence, confidence, and credibility
• Expand your sphere of influence
• Convey confidence through body language and voice
• Be seen, heard and remembered as a leader

This workshop is offered on October 29th as part of the Bloch School of UMKC's Executive Education and Professional Development series. CEU credit is available.

SPECIAL: Newsletter receipients receive $100 off the $795 fee (good until October 16th)! To take advantage of this special offer, register to "Communication, Charisma, and Command" by calling or emailing Kimberly Young, Director of Executive Education, at youngkc@umkc.edu or (816) 235-5149. 

About this newsletter. McClarie Group sends occasional newsletters to clients, colleagues and friends of McClarie Group with tips for turning your potential into power. If you'd prefer not to receive this information, click the link below.

McClarie Group

1930 N. Main St. Los Angeles, CA 90031
Tel. (323) 224-6820 - Fax (323) 224-6758
www.mcclariegroup.com / charmaine@mcclariegroup.com