On Sunday April 11, the TV station SBS showed an interview with Ken Feinberg of Washington DC in the USA. Feinberg has been appointed to enforce a law passed by the US Congress to curb the excesses of 7 US Corporations bailed out during the global financial crisis. In this interview Feinberg says:
"I have discovered on this job the tremendous gap in perception between the way Wall Street thinks and the way Main Street thinks in America. There is real, justifiable anger and frustration over these excessive Wall Street bonuses, guaranteed salaries, guaranteed commissions - regardless of performance - it is these principles, or these characteristics of Wall Street, that we are trying to change."
As has been said by many people: the only thing we have leaned from history is that we have never learned from history.
Some people in Australia today speak and act as though there never was a global financial crisis. Its as though they live in a fool's paradise in which, because Australia never suffered as badly as every other western economy, there was overreaction by those in authority. When we see the way in which housing prices are again soaring and realise that, again, many people are seeking 100% (or very close to that) finance for their home because they don't want to miss out on this property boom, we can understand the caution and apprehension of Treasury and The Reserve Bank.
There have been figures released recently that indicate the gap between the "haves" and the "have nots" in Australia is widening. God forbid that it should ever reach the levels that exists in the USA and many other countries - although I do see here an increasing incidence of people begging.
The system is broke. Traditional approaches are not going to fix it.
We need re-creation. We need Third Generation Leadership.
More information about Doug Long at http://www.dglong.com
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Showing posts with label global financial crisis. Show all posts
Showing posts with label global financial crisis. Show all posts
Tuesday, April 13, 2010
Tuesday, December 8, 2009
Values and the Leader
Last week I spent several hours with a person who is feeling very frustrated. He was running a very successful business but, in February last year, two key customers started experiencing difficulties - suddenly revenues dropped significantly. Initially he thought this was a minor hiccup but then the global financial crisis hit and, almost over night, other of his customers were also affected.
My friend has a value set which believes that you should look after the people who work for you and, when this issue first erupted, he had 14 people employed. After a few weeks he realised that, in the short term, revenues were not going to grow back to even close to where they had been (and forget profitability!) so he sat with his people, gave them the facts, and asked for suggestions as to the way forward. He made it very clear that dismissals were an option but not one that he wanted to take. A range of solutions were suggested and implemented and no-one was laid off.
Unfortunately things haven't yet improved. Customers are buying the bare minimums they need and crunch time has come. He is grappling with taking actions that will ensure his survival but which will hurt people about whom he cares and who have given him years of service. How can he reconcile his concern for his family with concern for his employees - all of whom he also considers to be friends.
Sometimes leaders are confronted by situations which challenge their values. They find that values which they thought were very simple are actually conflicting - as is the case with my friend. Like many people I know, my friend had never before confronted the question of his core values - he simply took them as granted and thought that everything would work out ok.
Right now we're going through the exercise of really understanding and enunciating both "what are the values?" and "what does this mean in practical everyday behaviours?"
When did you last really think about your values and how they impact on behaviour whether it is at work, in the home, or in your social life? What happens when there's a clash and survival becomes an issue?
More information about Doug Long and how I may be able to help you at http://www.dglong.com/
My friend has a value set which believes that you should look after the people who work for you and, when this issue first erupted, he had 14 people employed. After a few weeks he realised that, in the short term, revenues were not going to grow back to even close to where they had been (and forget profitability!) so he sat with his people, gave them the facts, and asked for suggestions as to the way forward. He made it very clear that dismissals were an option but not one that he wanted to take. A range of solutions were suggested and implemented and no-one was laid off.
Unfortunately things haven't yet improved. Customers are buying the bare minimums they need and crunch time has come. He is grappling with taking actions that will ensure his survival but which will hurt people about whom he cares and who have given him years of service. How can he reconcile his concern for his family with concern for his employees - all of whom he also considers to be friends.
Sometimes leaders are confronted by situations which challenge their values. They find that values which they thought were very simple are actually conflicting - as is the case with my friend. Like many people I know, my friend had never before confronted the question of his core values - he simply took them as granted and thought that everything would work out ok.
Right now we're going through the exercise of really understanding and enunciating both "what are the values?" and "what does this mean in practical everyday behaviours?"
When did you last really think about your values and how they impact on behaviour whether it is at work, in the home, or in your social life? What happens when there's a clash and survival becomes an issue?
More information about Doug Long and how I may be able to help you at http://www.dglong.com/
Friday, November 13, 2009
Re-creating the organisation
Back in September 2007 The McKinsey Quarterly ran an article entitled "Anatomy of a healthy corporation." It argued that there were 5 key characteristics - resilience, execution, alignment, renewal, and complementarity. Since then, of course, we have had the global financial crisis. While all these are essential, I believe that there are times when they have a hierarchical relationship with certain characteristics being more important than others.
Resilience was clearly the key for the past couple of years. Corporations and other organisations that have survived the gfc to this point without relying on government bailouts or guarantees have certainly shown resilience. These organisations have battled through by making both strategic and tactical changes depending on what their environment was doing. I expect that most of these will now be able to move forward. I'm not so convinced about those that received government handouts and/or guarantees - from what I can see it is still "business as usual" for many of these (particularly in the financial sector) and I see no real indication that necessary changes have been made. Sadly this may mean that yesterday's mistakes may well occur again.
Today I believe that the key characteristic is renewal.
A key aspect of renewal is the ability to harness the energies of everyone in the organisation so that ideas can be generated and change can occur with the support of everyone involved. This requires leadership - but not the sort of leadership that is generally promulgated by the populist press. It needs true leadership - that which creates and sustains an environment for success (individual and organisational) for everyone involved. The starting point for that is a renewed vision of what the organisation can and should be.
What renewal is needed in your organisation?
What are you doing about it?
More information about Douglas Long at http://www.dglong.com
Resilience was clearly the key for the past couple of years. Corporations and other organisations that have survived the gfc to this point without relying on government bailouts or guarantees have certainly shown resilience. These organisations have battled through by making both strategic and tactical changes depending on what their environment was doing. I expect that most of these will now be able to move forward. I'm not so convinced about those that received government handouts and/or guarantees - from what I can see it is still "business as usual" for many of these (particularly in the financial sector) and I see no real indication that necessary changes have been made. Sadly this may mean that yesterday's mistakes may well occur again.
Today I believe that the key characteristic is renewal.
A key aspect of renewal is the ability to harness the energies of everyone in the organisation so that ideas can be generated and change can occur with the support of everyone involved. This requires leadership - but not the sort of leadership that is generally promulgated by the populist press. It needs true leadership - that which creates and sustains an environment for success (individual and organisational) for everyone involved. The starting point for that is a renewed vision of what the organisation can and should be.
What renewal is needed in your organisation?
What are you doing about it?
More information about Douglas Long at http://www.dglong.com
Thursday, November 5, 2009
Mentoring For Re-creation
Harry Lubansky of Melbourne who sent me this photo taken a few months after Victoria's terrible bush fires last year, makes the point that sometimes Australian bush doesn't regenerate - the fire is so intense that the trees are totally destroyed. In these cases nothing can be done and regeneration is not possible. Those people I knew who committed suicide (blog: The Re-Creating Organisation) obviously felt that the devastation they had experienced made it impossible to go on - nothing short of a total tragedy for everyone involved including friends.
I have been working for several years with some of the CEO's and executives I mentor. Prior to the GFC our discussions centred on normal leadership issues relating to healthy organisations operating in a positive environment. As the GFC loomed and then hit, our discussions turned to understanding how these events would affect operations; to strategies for survival with minimum negative impact on all stakeholders; to "holding the line"; to moving forward. Like the bush that is now regenerating, these were healthy organisations with CEO's who knew they needed support and were prepared to use it.
In my experience, mentoring can help in the re-creation process only when those being mentored are willing to be totally open about the issues they are facing and, simultaneously, they have a belief that these issues can be dealt with. I believe it was John Saunders, founder of The Terrace Tower Group, who used to say: "He who has life has hope. He who has hope has everything."
Is re-creation needed where you are? What issues are you facing - both personally and in your organisation? Do you believe that these can be dealt with? What help are you getting as you seek to deal with them?
More information about Douglas Long at http://www.dglong.com/
Friday, October 30, 2009
Socially Responsible Leadership
As I write this there are 78 Sri Lankan asylum seekers stranded off the coast of Indonesia on an Australian Customs vessel. Both the Government and the Opposition in Australia are seeking political mileage by "being tough" on those who seek to jump the immigration and refugee queue. Once again blame is foisted upon the refugees rather than on the events and leadership which made them flee their homeland.
The media this week report that interest rates in Australia are almost certain to rise when the Reserve Bank meets next week. The only question relates to the extent of the rise and little is said about how financial institutions will use this to enhance profits. In the same media we learn that housing prices are again rising rapidly and making the dream of owning your own home even more difficult for many people. No-one is prepared to take responsibility for increasing the pressure on, primarily, low income earners and first home buyers.
Last week we learned that the global financial crisis had created a loss of some $160 million to the Anglican Archdiocese of Sydney - apparently the church invested using margin loans - and as a result they will need to cut back on help it gives to people. The Archbishop commented that perhaps God was trying to tell the church something but he fell short of accepting blame for the loss.
Three social issues.
Common to all of them is that leaders are caught up in events over which they now have little or no control. Also common to all of them is an apparent reluctance (if not refusal) of leaders to accept any responsibility or liability even though they could have had significant influence at very early stages.
There are three aspects to leadership - the intent, the strategy, and the execution.
Ideally the intent of leadership ought to be to create an environment in which every person can be successful - ie can lead a productive life free of such issues as starvation, violence, and discrimination. The specifics of strategy and execution - ie 'how' this is done together with the attitudes and behaviours of the leaders - will always be both culturally and organisationally specific. But the intent should remain constant because such an intent makes it possible to be economically responsible simultaneously with being socially responsible - its not an 'either/or'.
It seems to me that unfortunately many of those in politics, business, and religious groups seem to have lost sight of this.
More information about Douglas Long at http://www.dglong.com
The media this week report that interest rates in Australia are almost certain to rise when the Reserve Bank meets next week. The only question relates to the extent of the rise and little is said about how financial institutions will use this to enhance profits. In the same media we learn that housing prices are again rising rapidly and making the dream of owning your own home even more difficult for many people. No-one is prepared to take responsibility for increasing the pressure on, primarily, low income earners and first home buyers.
Last week we learned that the global financial crisis had created a loss of some $160 million to the Anglican Archdiocese of Sydney - apparently the church invested using margin loans - and as a result they will need to cut back on help it gives to people. The Archbishop commented that perhaps God was trying to tell the church something but he fell short of accepting blame for the loss.
Three social issues.
Common to all of them is that leaders are caught up in events over which they now have little or no control. Also common to all of them is an apparent reluctance (if not refusal) of leaders to accept any responsibility or liability even though they could have had significant influence at very early stages.
There are three aspects to leadership - the intent, the strategy, and the execution.
Ideally the intent of leadership ought to be to create an environment in which every person can be successful - ie can lead a productive life free of such issues as starvation, violence, and discrimination. The specifics of strategy and execution - ie 'how' this is done together with the attitudes and behaviours of the leaders - will always be both culturally and organisationally specific. But the intent should remain constant because such an intent makes it possible to be economically responsible simultaneously with being socially responsible - its not an 'either/or'.
It seems to me that unfortunately many of those in politics, business, and religious groups seem to have lost sight of this.
More information about Douglas Long at http://www.dglong.com
Monday, October 26, 2009
The re-creating organisation
One of the things I love about the Australian bush is its ability to regenerate.
We can have the most devastating bush fires yet, come the next significant rain, buds start emerging from the blackened stumps and, within a very short time, the bush is back. I thought about this today as I watched rain fall in Sydney.
If the pundits are to be believed, then we appear to be emerging from the global financial crisis that erupted a year or so back. Since the GFC I have watched people lose their businesses, their jobs, their homes and, in some cases, their families. I know two instances of suicides because of an inability to cope with the financial and social impact of what had happened.
Organisations that depend on donations for significant portions of their funding have also been hard hit – sure we have found money for special appeals like last year’s bush fires in Victoria, but overall funding has, I believe, been well down on what is needed.
If the pundits are right, the time is now ripe for re-creation.
Back in the Fourth Quarter 2008 I wrote about the need to simultaneously plan for the future and deal with the financial problems being faced by many organisations and people. The time may now be right to dust off those plans and consider how they may be implemented. If the economy is on the mend, we are going to need re-created organisations in order to move forward.
Of course, for a re-created organisation to be successful, there is an urgent need for re-created leaders as well.
More information about Douglas Long at http://www.dglong.com/
We can have the most devastating bush fires yet, come the next significant rain, buds start emerging from the blackened stumps and, within a very short time, the bush is back. I thought about this today as I watched rain fall in Sydney.
If the pundits are to be believed, then we appear to be emerging from the global financial crisis that erupted a year or so back. Since the GFC I have watched people lose their businesses, their jobs, their homes and, in some cases, their families. I know two instances of suicides because of an inability to cope with the financial and social impact of what had happened.
Organisations that depend on donations for significant portions of their funding have also been hard hit – sure we have found money for special appeals like last year’s bush fires in Victoria, but overall funding has, I believe, been well down on what is needed.
If the pundits are right, the time is now ripe for re-creation.
Back in the Fourth Quarter 2008 I wrote about the need to simultaneously plan for the future and deal with the financial problems being faced by many organisations and people. The time may now be right to dust off those plans and consider how they may be implemented. If the economy is on the mend, we are going to need re-created organisations in order to move forward.
Of course, for a re-created organisation to be successful, there is an urgent need for re-created leaders as well.
More information about Douglas Long at http://www.dglong.com/
Tuesday, October 20, 2009
What sort of model is the leader?
A month or so back I was invited to the annual general meeting of an organisation involved in community service work. During the course of the meeting the chairman stood up and harangued the members about their lack of involvement in providing various services. He accused the majority of members of inadequate commitment to the cause and, in effect, told them that they needed to change their ways.
Later I discussed this with the person who had invited me there. I was told that the very people who were being accused of lack of commitment were those who provided most of the money for the organisation to operate. Further, it was explained to me, a key factor in their doing very little else than provide money was the fact that the chairman had managed to alienate most of the members by his dictatorial behaviour. The feeling was that the chairman was seeking only those things that made him look good - he was not really interested in the organisation. Later I discovered that, not surprisingly, the rest of the leadership team exhibited similar behaviours - or they left for a new organisation.
The organisation in question has a leadership problem.
Traditionally the leader has been the one who is at the forefront of those being led. He or she is the one who knows where to go then sets the pace. The leader is the one who is seen first and after whom everyone else follows.
We see this in many areas. In business we describe those who are in top management as “business leaders”. We talk of those who are in front of the competitors as being “market leaders”. We talk of our politicians as being “national leaders”. In military and paramilitary organisations we speak of officers as being “leaders”. In almost every facet of life it is those who are in controlling positions who are referred to as “leaders” - the leader is invariably seen as being in the role of “master”
But is this necessarily leadership? And, if it is leadership, is it the sort of leadership that is appropriate today?
My research indicates that today the world is looking for leaders who:
* ensure they don't alienate their people no matter where in the organisation they may be - not just their direct reports
* are authoritative without being authoritarian
* have vision - know who they are and where they are going
* can communicate this vision to everyone who will listen
* are trustworthy and have personal integrity
* practice what they preach
* respect other people and their views rather than simply imposing the leader’s views on all around
* make it possible for others to achieve results
It is this sort of leadership that we need in all areas of society today - especially as we recover from the global financial crisis.
What are the leaders, and what is the leadership, like in your organisation?
More information about Douglas Long at http://www.dglong.com
Later I discussed this with the person who had invited me there. I was told that the very people who were being accused of lack of commitment were those who provided most of the money for the organisation to operate. Further, it was explained to me, a key factor in their doing very little else than provide money was the fact that the chairman had managed to alienate most of the members by his dictatorial behaviour. The feeling was that the chairman was seeking only those things that made him look good - he was not really interested in the organisation. Later I discovered that, not surprisingly, the rest of the leadership team exhibited similar behaviours - or they left for a new organisation.
The organisation in question has a leadership problem.
Traditionally the leader has been the one who is at the forefront of those being led. He or she is the one who knows where to go then sets the pace. The leader is the one who is seen first and after whom everyone else follows.
We see this in many areas. In business we describe those who are in top management as “business leaders”. We talk of those who are in front of the competitors as being “market leaders”. We talk of our politicians as being “national leaders”. In military and paramilitary organisations we speak of officers as being “leaders”. In almost every facet of life it is those who are in controlling positions who are referred to as “leaders” - the leader is invariably seen as being in the role of “master”
But is this necessarily leadership? And, if it is leadership, is it the sort of leadership that is appropriate today?
My research indicates that today the world is looking for leaders who:
* ensure they don't alienate their people no matter where in the organisation they may be - not just their direct reports
* are authoritative without being authoritarian
* have vision - know who they are and where they are going
* can communicate this vision to everyone who will listen
* are trustworthy and have personal integrity
* practice what they preach
* respect other people and their views rather than simply imposing the leader’s views on all around
* make it possible for others to achieve results
It is this sort of leadership that we need in all areas of society today - especially as we recover from the global financial crisis.
What are the leaders, and what is the leadership, like in your organisation?
More information about Douglas Long at http://www.dglong.com
Saturday, October 3, 2009
Leadership and the Global Financial Crisis
A year ago the world was plunged into turmoil when the financial markets collapsed. There was widespread clamour for reforms that would prevent such a catastrophe being repeated.
A year on, what has changed.
Very little.
Money trumps morality. Greed trumps equity. The “Gordon Gecko’s” of the world continue to practice their mantra of “greed is good”.
Many managers and leaders are appalled at what has happened. They worry about the loss in shareholder wealth. They seek to redress the wrongs seen when companies fail to perform yet executives receive huge bonuses. Yet they are caught up in the maelstrom and wonder how they can lead in tomorrow’s world – a world in which pressure from shareholder action groups and other interested parties will mean many of these excesses are curbed.
There is a need for re-creation for leaders and organisations.
With the benefit of more than 40 years’ hindsight, I know that these leaders can be re-created. And I know, too, that re-created leaders can re-create their organisations so that they do provide increasing shareholder wealth not only this year but into the future.
These are the leaders and the organisations that have a future. These are the ones in which it is worth investing.
More information about Douglas Long at http://www.dglong.com
A year on, what has changed.
Very little.
Money trumps morality. Greed trumps equity. The “Gordon Gecko’s” of the world continue to practice their mantra of “greed is good”.
Many managers and leaders are appalled at what has happened. They worry about the loss in shareholder wealth. They seek to redress the wrongs seen when companies fail to perform yet executives receive huge bonuses. Yet they are caught up in the maelstrom and wonder how they can lead in tomorrow’s world – a world in which pressure from shareholder action groups and other interested parties will mean many of these excesses are curbed.
There is a need for re-creation for leaders and organisations.
With the benefit of more than 40 years’ hindsight, I know that these leaders can be re-created. And I know, too, that re-created leaders can re-create their organisations so that they do provide increasing shareholder wealth not only this year but into the future.
These are the leaders and the organisations that have a future. These are the ones in which it is worth investing.
More information about Douglas Long at http://www.dglong.com
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