How would you navigate through this crisis?
Here is a discussion topic on strategy.
Assuming you are the CEO, and leader, of a well-known corporation of your choice, what strategy would you use to lead your company through the current economic crisis?
Explain, using examples and references, and relate your comments to the Four Principles for Purposeful Action.
This post was written by Margaux Ellis-Hall, who will lead the discussion for the week starting on March 10.
The key to leading through the current economic crisis is to restore integrity. Integrity includes self-integrity and society integrity. “Practical integrity is a very specific set of seven life skills. They are required not only for creating sustainable solutions to our current crises but for life fulfillment, great relationships, career success, and leadership that serves us all.” Once you have integrity in place; you can communicate the purpose of the mission. This mission must be purpose-driven as well as profit-drive.”
http://www.thenewiq.com/print/471
http://www.thenewiq.com/book
Here is an interesting quote by Ralph Waldo Emerson on integrity. It is all too true in this economic crisis.
“In failing circumstances no one can be relied on to keep their integrity.”
http://en.proverbia.net/citastema.asp?tematica=653
The decisions we make will determine where our actions will take us. I agree that integrity within a corporation is critical at all times, however those with high levels of integrity during these conditions will rise over others.
Venkat, Good five points you have pointed out.
I. What business are we in
II. What are we really trying to do
III. Who are our customers? What do they need and want?
IV. What is the competitive structure?
V. What resources do we need in order to sustain in the market?
This is applicable not only in business but personal life also.
Roy Mathai, can you please explain how these big five questions applicable to personal life?
I think it is important for a CEO and an organization to act with integrity during good times and bad. During this economic crisis it is important for the organization and the leaders to keep their name in the market so they are not forgotten. However, it is important that their name stay good and positive. If you are in the news every day for negative things that your company or CEO is doing, you will not be able to survive in the long run. I feel like the companies that are making the news most often lately, like Citibank, AIG, etc, will have a hard time un-tarnishing their name in the market. People will always remember all of the negative they have done. I think the most important things a CEO can do for his company during this economic crisis is to act with integrity and put others first. The company needs to take care of its employees and most importantly put the interests of their customers first. It is also important that the employees act with integrity and do what is right in the public’s eyes. The CEO and the employees should also put the interest in the organization first and not be greedy and self-serving. Sometimes it is important to take a small pay cut to keep your job but some don’t see that. They stay greedy and end up losing their job.
Ford is a good example of a company that decided to take pay cuts. The CEO agreed to a 30% cut.
“Ford’s stance of shared sacrifice here is a good model for other companies that need to look deep within themselves for possible solutions instead of lining up at the federal welfare table for handouts.”
http://www.bloggingstocks.com/2009/02/25/ford-ceo-to-take-30-pay-cut-workers-to-forgo-bonuses/
The main thing is for the organizations, the leaders of the organization, and the employees to act with purpose and follow the four principles of purposeful action. This is important in good economic times and bad economic times. The companies who follow the four principles always are sure to survive even during the hard times.
Nikki
Your point about staying in the market but also having a “good” image for the public is important.
You customers will remember you long after this downtown is over if you have all positive reviews
Here’s one view:
Instead of wasting $700 billion on a bailout of the guilty that does not address the problem, the money should be used to refinance the troubled mortgages, as was done during the Great Depression. If the mortgages were not defaulting, the income flows from the mortgage interest through to the holders of the mortgage-backed securities would be restored. Thus, the solvency problem faced by the holders of these securities would be at an end.
The financial markets must be carefully re-regulated, not over-regulated or wrongly regulated.
To shore up the credibility of the US Treasury’s own credit rating and the US dollar as world reserve currency, the US budget and trade deficits must be addressed. The US budget deficit can be eliminated by halting the Bush Regime’s gratuitous wars and by cutting the extravagant US military budget. The US spends more on military than the rest of the world combined. This is insane and unaffordable. A balanced budget is a signal to the world that the US government is serious and is taking measures to reduce its demand on the supply of world savings.
The trade deficit is more difficult to reduce as the US has stupidly permitted itself to become dependent not merely on imports of foreign energy, but also on imports of foreign manufactured goods including advanced technology products. Steps can be taken to bring home the offshored production of US goods for US markets. This would substantially reduce the trade deficit and, thus, restore credibility to the US dollar as world reserve currency. Follow-up measures would be required to insure that US imports do not greatly exceed exports.
The US will have to set aside the racial privileges that federal bureaucrats pulled out of the Civil Rights Act and restore sound lending practices. It the US government itself wishes to subsidize at taxpayer expense home purchases by non-qualified buyers, that is a political decision subject to electoral ratification. But the US government must cease to force private lenders to breech the standards of prudence.
[ http://www.globalresearch.ca/index.php?context=va&aid=10519 ]
Another set of Recommendations:
Stabilize the financial system.
Stabilize the economy.
Arrange long-term financing for steps #1 and #2 with our foreign creditors. [ http://fabiusmaximus.wordpress.com/2008/09/25/a-solution/ ]
Another good suggestion for solving some of the issues are provided here: http://www.americanprogress.org/issues/2008/09/real_solutions.html
Leadership is indeed the key and the four principles do outline how to effectively carry that out. Our leaders need to stop beating around the bush and take on purpose while being resolute on their positive ethical values! Selflessness on a grander scale is crucial to the success of every plan out there and making sure everyone partners with it is even more critical!!!
This is a nice review jimy,it would be more clear if you could brieffly elaborate the set of recommendations….
The US government needs a balance budget amendment that includes paying down the national debt without raising taxes. With the US debt at 10.98 trillion dollars the US government has not lived by the Five Positive Core Values.
In order to pay down the debt without rasing taxes, it is necessary for the government to stop un-necessary spending. You are right though, they have not lived by the five positive core values.
Nikki
I believe the problem is who will define “un-necessary spending”, there are many who do not live in the Chattanooga/Hamilton County area that believe that the money being spent on the lock at the dam is needed.
One persons project is another persons pork
Good point jimy,espically regarding your recommendations about stabilizing the financial system and economy.Because once these are stabuilized,they country can face issues positively.
During the current economic conditions corporations of any size will need to maintain a well pronounced market presence. Without this market presence any corporation will fail, especially during these vulnerable conditions.
Here is an article on Microsoft and how they became vulnerable within their own market in the late 90s by other competitors moving in. When the markets are weak the pressure for corporations to perform and succeed is increased to stay afloat.
http://www.businessweek.com/1999/99_08/b3617022.htm
As a leader of a well known corporation during the current economic crisis, for example Sears I would ensure the company limited future expansion, however maintained a strong market presence through competitive pricing. The employees must know the company is financially stable otherwise they may deviate from their assigned tasks due to the lack of stability.
The Four Principles of Purposeful Action include; ethical balance, levels of desires, actions, and your environment. Corporations must maintain a balance between providing compensation to their employees and remaining competitive within the market. They must be aware of their position in the current market including other competitors and where the market is headed.
Good points Brad. The comparison with the four principles is remarkable.
Based on the assumptions give,if I were a CEO of an organization and how would i navigate through the current economic crises?I would definately follow the four principles of purposeful action.We need to remember thet jobs dont create people and its people who create jobs.As a CEO of a company,i would definately have studied the organization and look at different avenues where i can open the door for my organization and try to implement creativly how i can take an extra step inorder to creat jobs for people and improve profits.
A phenomenon that typically always happens in a situation like this is that people get discouraged and want to give up as all their energy has been deflated with how hard they’re trying to make it or recover from setbacks because of the heavy load - I’m sure each one of us have felt the pressure (ex: when we’re in school and a certain course requires an insane amount of time & effort) but the measures taken to deal with them were unique in its own way, but similar in its attitude. There has to be a revival of passion, committment and ENTHUSIASM. There’s not apparent reason to be enthusiastic right now, but that’s when the depths of the brook provide strength to the flow in order to flow upwards almost over that huge boulder in its path!
Good point Jimy about enthusiasm. It is important for the leader(s) of the organization to be in tune with the employees and their feelings. When moral is low it is up to the leaders to raise it up. They need to help revive that passion and enthusiasm of the employees. Even if times are tough, it is the leaders responsiblity to help pull the employees and the organization through. I think with a lot of the companies in the headlines right now, the leaders are not strong and purposeful leaders. They are self-serving and are not in tune to the employees. These companies will have a hard time surviving with leaders like they have.
Agree with you Chandrika. Jobs don’t create people but people create jobs.