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January 09 Issue
2009 May Present the Biggest Economic Challenge of the Century
By Dr. Rick Johnson, Founder, CEO Strategist, LLC
More than ever before, 2009 will demand of most companies the ability to
achieve measurable results that are specific to profitability, growth, cost
containment and operational effectiveness. Of course, none of this will be
possible without leadership and organizational change.
This challenge will become a common theme in 2009 that will go uncompromised by
the economic turbulence that we are likely to face. Without a doubt, success in
2009 will be directly dependent upon both individual and team performance. More
importantly however, is the driving force that creates both individual and team
effectiveness. That driving force is leadership at every level in the
organization. It doesn’t matter what your position is or what your title is.
Leadership does not restrict itself to the caste system of power positions we
have come to know. Leadership can and must be demonstrated throughout the
Are You Prepared to Create the Necessary Change?
You need to ask the following questions as you contemplate the future direction
of your company during economic crisis:
Leaders lead, they are winners. Economic challenges faced in 2009 will still be
subservient to real solutions developed by real leaders. But, it won’t be about
theory; it will be about planning and execution. There is no doubt that 2009
will be about management effectiveness in dealing with economic turbulence.
Change shouldn’t be something that happens to you. Effective leaders know this.
Effective leaders create change, instigate and manage change to their advantage
to create success. This is especially true when economic conditions impact the
decision-making process. Effective leaders turn these conditions to their
- Do you have a contingency plan?
- Are your employees doing the right things – for the right reasons?
- Are their actions in alignment with the strategy?
- Do you have a strategic plan?
- Are you doing the right things?
- Are you functioning like a well-oiled machine?
- Do you have a shared end game – or does it just belong to you?
- Do you have a focused employee-development plan?
- Have you weeded the garden of unproductive underperforming employees?
- Have you eliminated all the ‘Sacred Cows?’
Not a Spin Zone
That sounds like a bunch of academic tripe and it would be if it stood by
itself, but I won’t let it. You see, leadership can only be effective if you
build a culture engrained with continuous improvement. Change without process,
structure and control in itself can turn into an uncontrolled chaos. Effective
leaders understand this and indoctrinate change during tough economic times as a
living breathing organism and process. It needs to be embraced by everyone in a
positive sense because it is controlled and managed according to your own
strategic initiatives or contingency plans. Tough times may dictate difficult
decisions, but effective leaders can manage these difficult times and create a
better company by doing it. That means you must build a roadmap to get from here
to where you want to go based on the realities you will face in 2009.
Principles of Facing Economic Turbulence
As a leader you must implement change to offset economic challenges. It’s a
hands-on process. You can’t lead from afar. A former colleague of mine used to
always say, “It’s easy to be brave from a distance.” Arguably that may be one of
the truest statements made when it comes to dealing with economic turbulence. It
will be hard work in 2009. It requires process tools that are sensitive to your
organizational culture. Consider these principles for managing during the
Change Can Take on Many Forms
- Employees throughout your organization must have the talent and ability to be
successful at meeting new challenges to growth and profitability
- Employees understand change that is essential to achieve goals in spite of the
- Employees gain increased respect for leaders that become the architects of
change. This is especially true if the leader encourages and solicits input from
- Leaders must systematically manage the change they create with fearless abandon,
demonstrating a purposeful and disciplined approach that engages the entire
organization through active participation in the success process
- Employee ownership of the vision – end game that is based on economic
conditions, the vision and any contingency planning that is necessary
MACHIAVELLI wrote in the forward to “The Prince”:
“There is nothing more difficult to carry out, nor more doubtful of success, nor
more dangerous to handle than to initiate a new order of things. For the
reformer has enemies in all those who profit by the old order and only lukewarm
defenders in all those who would profit by the new order, this lukewarmness
arising partly from fear of their adversaries who have the laws in their favor
and partly from the incredulity of mankind, who do not truly believe in anything
new until they have actual experience of it.”
Economic crisis in itself creates a demand for change. Effective leaders know
that creating and managing change starts with the human side of the equation.
Behavioral change becomes a necessity for almost every success initiative
employed. This often means more effective coaching, training, skill development,
accountability and contingency planning. Process improvement is often a platform
that supports change in the organization. Last but not the least, change becomes
a meaningful part of organizational structure and culture. This often requires a
realignment of reporting relationships and responsibilities. It may also require
a surgical reduction in force.
The Contingency Plan
A contingency plan is developed for a specific situation when things could go
wrong. Contingency plans include selective strategies and actions to deal with
specific variances to assumptions resulting in a particular problem, emergency
or state of affairs. They also include a monitoring process and ‘triggers’ for
initiating planned actions. They are required to help businesses recover from
serious incidents in the minimum time with minimum cost and disruption.
Contingency Planning is a management process that identifies potential impacts
that threaten an organization and provides a framework for building resilience
and the capability for an effective response and possible recovery if required.
They can also put you in a position to take advantage of opportunities that are
a result of external influences. They are essential during an economic crisis
and they become a roadmap for change.
Creating, instigating and managing change during economic crisis takes passion
and courage. It’s not for the weak of heart. It is not for those who embrace
simple traditional expectations. Effective leaders reach beyond these
expectations. They become agents of change. Most companies will thrive on the
concept of change, achievement, responsibility and accountability. Make it part
of your culture and you will maintain success in spite of the economic
conditions of 2009.
Dr. Rick Johnson is the Founder of CEO Strategist, an expert in
wholesale distribution consulting and strategic leadership. He works with
executives to create and maintain competitive advantage. Rick has more than 30
years of executive management experience and knows exactly what it takes to
create leaders within a company as well as how to maximize every sale to its
full potential. He spent the first 10 years of his career employed by the
largest steel distributor in the world and then built a $25M wholesale
distribution business in less than 10 years. After selling his business, Rick
decided to share his success secrets by taking the helm of troubled businesses
as a ‘turnaround’ expert. He helped set new directions for companies with
revenue from $50M to $400M, leading them from loss to profit. More recently,
Rick has brought his expertise to the business consultant arena, where he
utilizes his unique formulas for making businesses profitable. For article
feedback, contact Rick at