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MANAGING THROUGH MELTDOWN: 12 Things You Must Do to Exploit Tough Times

Written by: James R. Lucas

Article Overview: What do great leaders do when there's a meltdown? They don't think about merely surviving, or even just thriving. They think about, they focus on, how to exploit those tough times. We're going into the heart of meltdown management. This is a no-baloney, hands-on, take-no-prisoners guide. Being tough is part of the equation, but you have to know how to be tough. With the right tools and toughness you can turn potential disaster into real wealth.

MANAGING THROUGH MELTDOWN: 12 Things You Must Do to Exploit Tough Times

Meltdown. The end of illusion. A forced march to a new reality. A change from flush to blush.

We thought things were better than they were. We were sure things would be better than they are. But suddenly we find ourselves in meltdown¡Xdue to tough times, or changing circumstances, or simple human miscalculation.

Meltdowns come in a variety of nasty ways. Your organization¡Vfrom a department or division to a business unit or entire organization¡Vcan be turning sour before your eyes (or nose). Your industry, your market, your field of endeavor can be fading to black. And the whole economy can implode, collapsing in a soggy and discouraging mess.

Success in one or even two areas can be impacted by meltdown in a third. A beautiful business strategy in a reviving or booming economy can be wiped out by inhabiting a fading industry. An industry can be sent into disarray by market leaders with bad bets on the wrong horses. A strong economy can be brought to its knees by businesses that forget the value of cost control in good times ¡V and earnings at all times.

Sometimes meltdown, like bad news, comes in threes--you look around and see that your organization and your industry and the economy are all wilting like a drooping candle on a sweltering day.

So what do you do? You change. You create. You build. You do the things discussed here. You exploit those dangerous meltdowns, however they¡¦re packaged.

We¡¦re going into the heart of meltdown management. This is a no-baloney, hands-on, take-no-prisoners guide. Being tough is part of the equation, but you have to know how to be tough. With the right tools¡Vand toughness¡Vyou can turn potential disaster into real wealth.

12 Key Actions

There¡¦s no magic to managing meltdown. It always requires hard thinking and hard work. But the kind of thinking and work we do is critical to making meltdown work for us rather than against us.

To exploit tough times, you must lead with apparent contradictions, with paradoxes. The untrained mind works to reject these and pick easy extremes ¡V but meltdown leaders embrace apparent contradictions, and by doing this manage meltdown.

Take these twelve key actions, and go from victimhood to victory:

„« Spread optimism and spread the ugly truth. Meltdown needs a positive framework. People will conquer mountains--if they believe they can and that there¡¦s a point to the battle. But with the hope, they need the unadulterated truth. Cheerleading won¡¦t get the job done if it¡¦s based on wishful thinking rather than hard-core reality. Be a pragmatic idealist. Lead with faith, but mix optimism and ugly truth in equal amounts.

So tell them what the financial situation really is (with no accounting mirages allowed). Walk them through some projections, so they can see for themselves the end of the current path. But then tell them where the new opportunities are, and show them how to increase sales or revenues. Your people can¡¦t help you make money if they don¡¦t know how you make it or spend it. Convince them that together you can turn this lemon into lemonade.

„« Broaden the vision and narrow the focus. Meltdown is no time to have too much of your future tied to too much past vision. Broaden it. What else are we passionate about? Where can we make a unique contribution, given the new rules of the game? What are our non-customers up to right now?

At the same time, resources are scarce and we¡¦d better spend them on the best shots we have. No distractions. We need to use the 80/20 rule and focus on the 20 percent of our opportunities that hold the potential of giving us 80 percent of our near-future results. And if we have wandered into areas where we¡¦re strangers in a strange land, let¡¦s exit. Fast.

„« Nurture customers and fire customers. Always is the time to love your customers, but now¡¦s the time to really love the ones with cash and orders, the ones who may currently have more options. Assign interim customer champions to make sure nothing is taken for granted. Find ways to help customers through their own meltdowns. Become even more indispensable. Put some of your idle resources into play by doing ¡§above and beyond¡¨ work for these jewels for free.

But purge the bad customers ¡V the ones who bring high levels of
demand and complaint, and low levels of profit and partnership. You have no time now for these marginal operations. They weren¡¦t helping you before, and they¡¦re even less likely to help you now. Clean out the Rolodex.

„« Invite people in and send people home. Bring in people who aren¡¦t limited by past golden ideas, or flashy successes or recent failures. People who see the opportunity hiding behind the adversity, people who are ready to do the work of five and the thinking of ten.

Who do you send home? People who hunker down, turn sour, self-protect. You rid yourself of people who are problems rather than problem-solvers. People who hang onto the past rather than invent new ways to add and create value. People who never manage to really serve customers or conceive the future. Present meltdown to everyone as a challenge to be great. Then sort them by how they respond.

„« Increase freedom and clarify boundaries. The shackles need to go. You won¡¦t exploit meltdown with policies, procedures, accepted practices, rules or regulations. Bureaucracy may not be the cause of the meltdown, but it certainly isn¡¦t likely to be the cure. You desperately need good judgment. Give great latitude to anyone who displays it for even a minute.

But there¡¦s no time or resources available for people to duplicate or overlap efforts. We need to eliminate gaps through effective communication rather than by swarming the gaps with colliding troops. Give more freedom to do what no one else is doing ¡V unless someone else can do it even better.

„« Expand creativity and eliminate ideas. Leaders always claim to value innovation, but few encourage or measure it, at least outside the R&D department. You need 100 percent of your staff thinking CEO stuff, and none of this ¡§think at the top, do at the bottom¡¨ crippling nonsense. Create forums for ideas and the liberty to implement them fast and wherever possible without the need for permission or approval.

But you¡¦ll need to eliminate a high percentage of these ideas very quickly. There¡¦s no time or money to explore most of them, and many of them are unlikely to add any significant value. But let the people who are doing the work and giving the ideas be part of the process of eliminating them. Create incubator teams that can kill thoughts ¡V without killing thinking.

„« Take more risks and eliminate risk. You¡¦ve got to get everyone out there on the edge. Push your people to do scary stuff¡Xscary for them and scary for you. Ask people every day what risky thing they have on their agendas. Frown when they say ¡§none.¡¨

But also clearly delineate what no one can do without clearance until meltdown is over. This kind of thing will take too much time to develop, that kind of thing will stretch our lean staff to the breaking point. We may have cash for fewer tries, so we¡¦d better try fewer but more radical things.

„« Execute better and make more mistakes. There¡¦s no time for sloppy execution, mindless bureaucracy, or dumb mistakes. Weed out all waste, no matter how small. Knock out useless activity and inefficiencies caused by turf battles. Do it to free up resources, in part so your people will have what they need to make even more mistakes than they are already making.

But different mistakes. Try goofy ideas that could never pass muster in boom times. Say ¡§just maybe that¡¦ll work¡¨ instead of ¡§no way¡¨ when someone offers just a glimmer of a new concept. And then create a team mindset that loves the inevitable mistakes to death. Meltdown is a time for fresh initiative out on the cutting edge, and you remember that some of it ¡V maybe a lot of it ¡V just won¡¦t work. Encourage lots of well-executed mistakes ¡V and celebrate every one.

„« Move faster and take more time. Set tighter deadlines. Settle for 80 percent of what you need to make decisions. Banish analysis paralysis and death by data. Trust the team¡¦s intuition when it says, ¡§Go.¡¨ Push, and then push some more.

But give everyone the right to say, ¡§Slow down¡¨ whenever they see massive danger or opportunity. Have speed-evaluation teams at strategic locations to help us see where we need to speed up and where we need to shift into low gear. Meltdown requires both feet ¡V one on the gas, and the other on the brakes.

„« Increase spending and reduce costs. Poor managers do across-the-board cuts. ¡§Every department has to cut its budget 10%¡¨ or ¡§We need all managers to cut staff back by 5%.¡¨ This is easier than thinking in new ways or acting with courage. So we cut 10% in some departments that should be cut 40%, and the same 10% in departments that should be increased 40%.

Meltdown managers don¡¦t play this useless and counterproductive game. Instead, they reduce costs a lot in some areas so they can increase spending a lot in others.

„« Increase pressure and reduce stress. You¡¦ve got to turn coal into diamonds ¡V fast. Step up the pressure. Make everyone feel the pressure and the urgency. Your team needs to do the two-minute drill for the whole game, and you have to be the quarterback that doesn¡¦t let their intensity flag.

But more than ever, you¡¦ve got to build in times and forums for stress relief. Pressure makes diamonds, but stress can fracture them. Encourage your people to blow off steam. Show them how to do it, and provide the ways and means. Meltdown is a time for war rooms and for party rooms.

„« Communicate more and talk less. Meltdown management requires a lot of communication. It is worse than insufficient to tell people only one time, ¡§We¡¦ll make it through this together.¡¨ Part of the problem is that meltdown affects people¡¦s hearing ¡V the frantic environment makes it harder for them to ¡§get it.¡¨

But now our communication has to be really strategic. Every word has to count. Too much talk, like the many warnings in the United States on homeland security, can scare people to death and paralyze them at the same time. Take the time to say and write really short statements. As Churchill showed the world during World War II, words spoken during meltdown can have special power.

Meltdown Mastery

What do great leaders do when there¡¦s a meltdown? They don¡¦t think about merely surviving, or even just thriving. They think about, they focus on, how to exploit those tough times. ¡§Now,¡¨ they say, ¡§here¡¦s a shift, a change, and it¡¦s no more ¡¥business as usual.¡¦ Now is the time for a new greatness to emerge.¡¨

And they go further. They build tough-time thinking into the organization for the non-meltdown times. They know that times can again become very brutal, without warning. They know that what they learn during meltdown is applicable for building and sustaining a high-performance organization in all circumstances.

In the end, they know that meltdown is awful, frightening, traumatic, soul-shaking.

And if they handle it right, the opportunity of a lifetime.

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  Managing Through the Power of Paradox
  USING THE POWER OF PASSION TO EXPLOIT TOUGH TIMES AND WIN NEW CUSTOMERS
  Competing Strategically in Your Career
  “Funnel” or “Incubator?”
  Meltdowns

Article Tags: apparent contradictions, bad news, baloney, business strategy, business unit, disarray, entire organization, good times, hard thinking, market leaders, meltdown, miscalculation, nasty ways, new reality, right tools, sure things, threes, tough times, toughness, two areas



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