Musings at Altitude

As I look into an organization, one of the great challenges I have is assessing leadership when things are going well.  I find myself in the good times wondering if it’s the organization, if it’s the product or solution being sold, if it’s the customer with the need, or if it’s the leader creating the right business scenario for success – or is it a combination or some mix of all.  I get most troubled when leaders take lots of credit for the upside when the “weather” for business is so good, and then they quickly start a blame game when the weather starts to change.

I’ve been in both extreme business scenarios – (1) perfect business weather where the customers have lots of money, the needs are clearly defined, the urgency is immediate, and our business is the right contracting path; and (2) the perfect business storm where the customer is short on money, the needs are questionable, the urgency is “not now”, and our business is one of many different possible paths to contract the few things that will ultimately move forward.  The perfect business storm – in fact the worst imaginable business storm - occurred for me in 2000 and 2001, where the market collapsed, the telecom companies took a beating, the IT budgets were squeezed and the consultants were tossed out.  Our 18 month old consulting firm went from an aggressive ramp with a global presence in year 1 to struggling to survive and a localized presence in year 2.  As I look back on that two year period, it’s hard to believe how quick the rise and then even quicker the fall – we went from perfect weather to the perfect storm in those 24 months.  On the government contracting side, in my 25+ year business career there have been several periods of incredible government spending thus accelerating opportunities for lots of companies.  We had that type of period in the 80’s when we were spending aggressively in advance of ending the Cold War, and then that type of period again in this decade with the increased spending because of the Global War on Terror.  Lots of companies were able to take advantage and grow during both periods of heavy spending, and lots of leaders took credit for great performances during these periods of “perfect business weather”.

During both extremes, I’ve seen leaders dramatically shift focus or ignore key indicators – pipeline, margins, costs, operating income, employee churn, etc.  During the good times, the pipeline is full and the operating income is substantially rising, so folks ignore the decreasing margins and increasing costs.  During the really bad times, folks are consumed by pipeline and the loss of employees and excuse away the rising overhead and rapidly falling operating income.  During one such period, one business leader told me “if we had sold more we would have lost less”, ignoring the fact that if that leader had reduced costs when the revenue creation stagnated, then maybe the actual loss would have been more understandable (though no loss is really ever acceptable) rather than staggering thus costing that leader their job.

The leaders I have enjoyed the most are very humble people.  During the good times, they give credit to others, to the markets, to their customers, and to the timeliness of business actions.  During the bad times, they reduce costs, they tighten their OODA loops, they relentlessly watch the business weather (but don’t blame that weather because the really good leaders saw those storm clouds coming and prepared well in advance), and they minimize potential losses while motivating their teams and taking the burden of change and any assigned blame on themselves. 

As I look at and assess leaders today, I spend lots more time focusing on their actions and their attitudes during the downturns.  If times are really good for any particular company, I spend quite a bit of time now looking behind the positive numbers and seeking out their actions against the always present irritants of business – that’s where I can sense how they would act and react when the inevitable downturns occur.  In perfect business weather, decent managers can effectively lead growing companies, but it takes tremendous business leadership to effectively navigate any company in the perfect business storm.