Observations Archives

November 2001

Seven Rules for Leading in a Recession+

Everybody asks: HOW DO YOU "LEAD" IN THESE ODD TIMES? "GAK" is my usual answer. God Alone Knows. But in this brief treatise I’ll go a little further … and offer seven "rules." To wit:

1. It’s already too late. The fox is in the hen house. Emerson Electric turns in terrific results … quarter after quarter … decade after decade. One (big) reason: Emerson lives by the Boy Scout motto: Be prepared! Emerson’s chiefs know that what goes up invariably comes down. Their caution causes them to miss some opportunities. Nonetheless Emerson execs have plans on top of plans anticipating downturns -- and thence they react on a dime. "What, me worry" doesn’t get you far at this "mundane" company -- with a rep for delivering results that sing in bad times as well as good.

Message: A little anticipation goes a long way!

2. Show up & tell the truth. The people who work for you go home and tune in to CNN. They well know the doggy doo doo has hit the fan. So don’t be like Treasury Secretary Paul O’Neil and tell us "all is well" … when it clearly isn’t. In short, people can put up with a lot of shit (call it Life 101), but won’t put up with a lot of bullshit. So … tell the truth. And follow Mayor Rudy’s example: Be there. Be visible.

3. Kill ’em with kindness. Venture capitalist & Home Depot co-founder Ken Langone says nothing is more important than "a kind word and a thoughtful gesture." Yes, the crap has hit he fan. Yes, boss, you’re working 80-hour weeks. Still … take the extra 20 minutes … and chat up the telemarketing or housekeeping staff before you leave at 7 p.m. A "little" consideration goes a long, long way in messy times.

4. Sharp pencils are imperative -- but don’t forget that the CUSTOMER and our TALENT and RISKY INVESTMENTS are still our mid- to long-term bread and butter. To be sure, one can hardly be oblivious to a 15% same-store month-v.-month drop in revenue. And layoffs, among other awful things, may indeed be warranted. (Necessary.) But beware throwing baby parts out with the bath water; insensitive handling of, say, those layoffs will come back to haunt you in the good times and in the tight talent market that will inevitably return. AND: It may be "tough times" … but the customer is still (MORE THAN EVER!) king … and daring investments in the future are still the underpinning of a gorgeous future. Got it?

5. Everything’s different, everything’s the same -- it’s the NEW ECONOMY, more than ever, stupid! The Internet is here. Tech change continues to accelerate. Dell knows. Oracle knows. DO YOU? This is exactly the wrong time to hunker down and cut the IS/IT investment account. Business-as-unusual was the pre-recession, pre-September 11 message - and it’s the message today. Be sensible in the face of a downturn, but INVEST LIKE A MADMAN IN THE "NEW STUFF." Please. (I.e., PLEASE.)

6. "Use" the trauma to mount the Bold Initiatives you should have long before launched: Flux = Opportunity. NOW IS THE HOUR! MORE THAN EVER! FLUX = OPPORTUNITY. No bull. You know it. Everything is different … in a Wal*Mart-Dell-Amazon world. Right? So use this time of messiness as "cover" for doing what must be/should already have been done … TOTAL RE-INVENTION OF YOUR DEPARTMENT-ENTERPRISE. (And "total" is the operative word. TOTAL = TOTAL.)

7. We’re in a War of Organizational Models -- from the Pentagon to retail. AND WE NEED SCINTILLATING NEW IDEAS! The Pentagon-Washington has been required to learn new tricks … overnight. E.g.: The CIA must learn to talk, "real time," to the FBI and the Air Force and the Army; and the (bureaucratic) military must learn the meaning of the word … agility. Period. Recent research attributes much of our big productivity surge of the last decade to one company … Wal*Mart. Its new, swift, non-bureaucratic, technology-enhanced way of doing ALL business throughout the extended "supply chain" must become everyone’s way of doing ALL business … or else.

As mentioned above, I admired Mayor Rudy’s very visible response to 9-11. But as I thought about it later, I realized we need something even more important than "showing up." We need … desperately … NEW IDEAS. Don Rumsfeld has them for the military … and now people (generals & admirals & Congresspersons) are listening … thank God. We need Brand New Ways to Work … in every sphere of endeavor. Now. Urgently. Cut the crap. Get on with The Revolution … posthaste.

Good luck.

Tom Peters, aboard BA286/SFO to LON/24NOV2001

Tom Peters posted this on 11/25/2001.
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