Never waste a troubling recession

Leadership through the downturn

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Exceptional times demand exceptional leadership. And make no mistake about it, these are unprecedented times.

Our world was, until recently, more joined up and interdependent than it has ever been before. Information spreads at digital speed and no economy is immune or unaffected by the force, velocity or impact when seemingly well-informed decisions turn out to be dramatically mistaken.

As harsh as the 2007 global financial crash became, it somehow felt that all the leading nations were in this horrible situation together. There is nothing like universal adversity to bring leaders much closer in their thinking and behaviour and also make them much more trusting of each other’s motives.

With an aggressive and single-minded President Donald Trump at the helm of a highly-charged and belligerent USA administration, the days of global collaboration and cooperation have already been long forgotten. With his pulling out of the Paris Climate Accord, the unravelling of the NAFTA alliance, the kicking off of a vicious trade war with China, the European Union and just about anyone else he fancies, it increasingly feels like the days of working together for mutual benefit are, unfortunately, long gone.

With Turkey’s economy coming under savage attack from the USA, the Turkish lira has lost over 40% of its value this year. There had to be a predictable emerging market backlash. And it wasn’t long before China, Russia, Brazil and, of course, South Africa were soon feeling the chill wind of advancing recessionary times.

Every nation is now looking after its own economic issues and the days of globalisation are drifting into our memory banks.

Businesses must be quick to react

Similar collaborative and cooperative behaviour and attitudes rarely exist in business, no matter how bad things get.

In the past, a ‘good enough’ strategy, with a ‘good enough’ management team and a strong brand were good enough to ‘get by’; but in this new, rapidly changing world, these strengths alone will solve little.

Let’s be explicit. By management, we mean strategy, process, procedure, task, execution, KPIs etc.—all the activities that ensure things don’t go wrong. Every business practices management now and it is readily available to all. Each and every aspect of management has become commoditised and all your competitors have similar access and are subsequently playing by similar rules.

Management is no longer a differentiator and it no longer covers the cracks of a failing business. This over-reliance on continuing to do the same things, in the same manner, is crucially locking out a new generation of potential leaders who have different philosophies for tackling new and disruptive technology-driven challenges.

This is far from an argument against management, it is still essential. Without management, you will go out of business very quickly. But in these times of transformation and high-velocity change, management is no longer anywhere near enough on its own.

Many of the great South African corporate institutions still cannot escape the ‘pull of the past’ and even now, in a time of crisis, far too many keep looking for answers back in their history and from previous experience.

It is what a management ethos will naturally lead you to do; to forever look at lessons learnt from years before and study what the “best practice” from their industry was, gleaned from a string of previous successes and failures.

But that makes the gross assumption that what is being experienced now has been experienced before. And it simply hasn’t.

The land of innovation

Over the last 15 or so years of travelling to and working in South Africa, one of my most memorable privileges has been to mentor and coach some outstanding young business talent across many industries. It is a role that has afforded me an intimate understanding and a strong rapport with the South African people and an undying love for the country.

When I left the corporate world and went solo as a Business Speaker, Author and Broadcaster over the last 18 years, one of my early clients was Barclays Bank and I enjoyed a fabulous working relationship with them. This work led me all across the African continent working with Barclays Africa (rebranded as Absa).

Having now had the opportunity to work with the leadership of many more leading South African businesses in many industries and sectors, it is clear that there are many talented managers and experts.

These experiences have left me with strong views on South African business.

The primary one is that South Africa has more talent than it knows what to do with. A younger, better-qualified and more travelled generation with more naturally collaborative instincts are struggling to get anywhere near the top of their respective companies.

This is both worrying and dangerous. The really top talented ones are leaving the country because they are in demand elsewhere and know they are in this new super-connected smartphone world, which their bosses are not privy to.

In many respects, it is the land of invention and innovation but it has become synonymous with, ‘nurtured here, capitalised upon elsewhere’.

These hard-working, aspirational and ambitious employees have fallen victim to the ‘tall poppy syndrome’, where the best of the best eventually head elsewhere, be it London or the USA, to deliver on their obvious potential. Some are so frustrated that they look to other like-minded and frustrated colleagues and join the growing start-up community.

The government is trying to further stimulate the entrepreneurial culture with many initiatives, like the Small Enterprise Development Agency (Seda), which provides business development and support services to small enterprises. Many of the banks have also sensed the commercial, community and long-term opportunities that their active involvement will bring.

In 2016, Statistics South Africa (Stats SA) estimated the size of the country’s youthful population (14 to 35 years old) to be 20.1-million or 36% of the total population.

This age group presents both opportunities and risks for South Africa in terms of its potential contribution to the economic growth and stability.

On the plus side, South Africa recently entered a period in its demographic structure (the stage when the ratio of the working-age population to dependents is optimal) that facilitates rapid economic growth. South Africa will remain in this fortunate position for several decades.

South Africa must expect and anticipate to be hit hard during this current recession and yet it has the capacity to flourish where others are faltering. It must see the next generation of leaders as a huge asset and not as impatient and entitled novices.

But let’s look again at South Africa’s strengths. It remains a fervent breeding ground for start-ups that are innovative and visionary. They have been groundbreaking and pioneering but most struggle with early stage-funding and the banks must remain tuned into taking such risks despite the recession. With the banks aligned to a more positive disposition towards those without long track records of success, most have courageous and insightful initiatives that are making a tangible difference to young entrepreneurs but its far too early for them to ‘bear fruit’ or the necessary returns yet.

These fledgeling projects should not be ditched because of the dip in the economy. They will be a strong part of the medium-term solution and should not be seen as part of the short-term expediencies.

Being unique, special and different is an inherent strength of South African start-ups and an invaluable ingredient in the recipe for survival in the downturn.

The South African business community is incredibly self-sufficient and resourceful, which is perfect at the beginning of a venture but perhaps a hindrance as they mature. Asking for help is a sign of strength, not weakness. It is something that needs to be addressed.

Feeling unable (or sometimes unwilling) to ask for help (to, therefore, not risk being seen as a failure) leads to two things:

  • Zero collaboration
  • Great small companies rarely become great medium or big companies.

To get to the very top you need to share. Collaboration is the new leadership.

And you need someone to lead the way, forget the fact that they may be young and inexperienced, or perhaps do not have the high academic qualifications.

If you’re capable, you’re qualified.

Where are your new ideas coming from?

In unprecedented times, the only way out of the darkness is leadership; inspired leadership at that.

By leadership, I mean vision, people, teams and culture.

Management is IQ and leadership is EQ. Management is the hardware and leadership is the software.

Leadership is not management; it is how you inspire and energise your people towards your vision—show, not tell. This approach naturally creates more leaders for the organisation, in a virtuous circle that means the best of the best talent continues to be drawn towards wanting to stay and deliver for the business.

These new age leaders want to belong to something that wants and appreciates them, and want to believe in a leader who also wants and appreciates them.

We are seeing a new generation in South Africa who thinks and acts differently from the past and has a different set of values.

This new generation is sometimes described as acting with a sense of entitlement and not having the work ethic of previous generations, these are sweeping generalisations and unhelpful.

They’re not born of the ‘permission culture’ of the past, and are pioneering a new path. But that alone won’t stop them from migrating away or going off to start their own enterprises. They need to feel that they ‘belong’ and that their voices will be heard and matter.

A sometimes-ultra-cynical business media is not helpful and all the more optimistic young businesspeople deserve a little more balance without losing the media’s first-class courage to speak the truth about corrupt power. Let’s recognise the need to be just that little bit more optimistic about the authentic hard-working approach to business and life at work that most exemplify.

Just how optimistic are you?

Do you energise your people or depress them?

Are you driven by the fear of failure or the desire for success?

Do they come to you with new ideas or share problems with you?

The historical South African business dilemma is no longer about talent, it’s clearly about leadership and, consequently, the corporate culture.

What’s your honest favoured approach? Leadership or management?

There is always one question that I always get asked at conferences when it comes to leadership—are leaders born or made?

In my humble experience, it’s neither. Leaders are found.

The biggest myth in developed western societies is that leaders are at the top of the organisation. This is nonsense, it’s the managers who are at the top of the hierarchy.

Leaders are everywhere.

Look for those who can influence and persuade without authority. Leadership is not about rank, authority or the hierarchy—they are your true leaders. Identify them, energise them and give them the recognition they deserve. Don’t worry about their age or how much experience they have.

If they are capable of doing the job well, then they are qualified. They should be spotted early, supported and developed and then fast-tracked to executive positions. There is much to learn from the way the technology industry in the USA and China have taken risks and invested in young precocious talent, and it has paid off handsomely.

‘Old’ Europe’s enduring business malaise is due, in no small part, to it continuously worshipping at the altar of management for many years, consequently creating cautious and risk-adverse corporate cultures.

It has bred an approach of slowly wanting to always ‘make sure’, borne out of not wanting to lose.

In contrast, the role of leadership is to be positive, optimistic and uplifting; balancing EQ (emotional quotient or intelligence) with IQ. If management is what you do, then leadership is how you feel whilst you’re doing it.

What has become apparent is that it is imperative not to waste a good recession or crisis because this is the time to re-invent your culture and unleash the young leaders within your businesses. They might just have the courage and endeavour to break away from the pull of the past and identify far more exciting and lucrative ways forward.

Let’s be clear. When all around are polishing their management books and tweaking processes to try to make sure that mistakes aren’t going to happen again, the more progressive businesses are inspiring their people to give that extra 15% discretionary effort that all employees have to give but rarely feel engaged or recognised enough to do so. This new energy and mindset will drive innovation and bring new working practices better suited to the agility and rapid deployment demanded to thrive in today’s fast-moving markets.

The answers to the challenges faced by most businesses lie within the organisation itself and yet, time and again, their young people are rarely consulted and rarely listened to.

If they did, the game in South Africa could change forever.

What might you do differently?

When a recession really starts to bite, it might be the time to take an honest review of whether some of the business’s issues have been exacerbated simply because they are not unique, special or different, despite some being very successful for a very long time.

Whilst having operated well for years, perhaps they have failed to set themselves apart from a wave of newer, hungrier and leaner competitors.

It might be a time where ‘good enough’ may no longer be good enough.

Facebook’s Mark Zuckerberg has a strong view, “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”

Therefore, it’s an excellent time to ask yourself some tough questions about your business and brand. Is it strong enough and different enough to ride the turbulence? Is it time to take a few calculated risks with your leadership team and promote those who can think and behave very differently from the recent past? It just might be the right time to shake things up a bit and bring much more diverse backgrounds into the executive team.

Finally, ask yourself the toughest question, that only authentic leaders will dare answer truthfully. Are you still the right person to lead this business?

Every progressive business desires stability at the top but an active succession plan is absolutely fundamental to success. Marketplaces are too fast-moving, aggressive and unrelenting for the top team to be in place for more than a decade anymore; there need to be credible younger candidates to take the top roles at any time.

Only then will you be in the position you need and want to be in.

This recession is a perfect storm for South Africa to deliver on its unquestioned potential, but it’s high time to engage a new generation of business leaders and note that their lack of experience in doing things the old way might just be the essential missing ingredient.

A new generation of leaders will replicate what is happening all over the world, they will not be denied for long. They are already better-joined-up and might just bring that missing ingredient of collaboration, both inside their respective businesses and probably with partners across the world.

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