Welcome to “déjà vu all over again.” Assuming you have management responsibilities within your organization, how are you accepting and handling the current market contraction? Stressed? Worried? Cutting staff? Scrutinizing overhead costs? “Woe is me” or “This too shall pass?” If you have ridden the learning curve of past market contractions, you have learned a few lessons. Hopefully you remember most of them. If you are relatively new to your management responsibilities and have not yet earned “war horse” status, your learning curve is rather steep. In an effort to rekindle war horse memories and decrease the pitch of the learning curve for newer managers, I offer the following management observations and suggestions:
Market Contraction Creates Greater Scrutiny
You suddenly are on an island. The “cover” provided by unheard of volume suddenly disappears when things slow down. Increased visibility means the “you will be held accountable” mantra is no longer empty rhetoric. Not that you haven’t been accountable in the past, mind you, but a new level of accountability will now be applied. Get ready for it. In fact, if you are smart you’ll get ahead of it. Become more proactive in a time of change, not reactive. For major brokers, “cost containment” is a by-product of greater scrutiny. Although you cannot “cost contain” to profitability, you can be sure that someone is closely watching the bottom line. Greater visibility today means you must manage and lead differently tomorrow.
The next time you have the chance to address your team, you may consider asking the following question: “What do you think you may have to change given the current market contraction we are now experiencing?” If the response is “I don’t think I need to change anything,” you may contemplate the value this employee brings to the team, because they are clueless. If, on the other hand, a few members of your team respond with: “I think I need to get back to basics more than I have” or “I need to change my marketing strategy” or any number of responses, you will know you have a team member worth keeping. The key, as an effective manager, is to create the environment in which this discussion can take place. Your management skills will be enhanced by allowing your brokers and operations team to self-determine the actions they believe will be necessary. Greater scrutiny therefore need not be limited to hierarchy or third-party pressure—it is actually more effective if it is the result of “self-discovery.”
Get Out Your Chair and Whip
Greater scrutiny brings many difficult characters out of hiding. When suddenly confronted for applying yesterday’s business approach to a new reality, many people become a caged lion. This behavior will severely tax your management skills. If a group of caged lions is not a management challenge, what would happen if you added a bunch of “territorial protectionists” to the mix? The reactive behavior caused by myopic tunnel vision creates a leadership challenge in which a chair and whip may prove to be useful.
When markets negatively impact performance levels, aggressive personalities usually respond with aggression. They no longer become “team players.” Their only concern becomes their own hide, even if it is at the expense of the entire organization. This seems to be a “CLM” (Career Limiting Move) but it is amazing how evident this behavior can be. Part of the “caged lion reaction” can be attributed to how credit is allocated. Who gets credit for what can be a driving factor in dealing with difficult behavior. The ideal is that it should not matter; if the entire organization benefits why should it matter? People who “cut off their nose to spite their face” do not have a long-term view of weathering the storm together.
You may consider pointing out to your charges that they are either a help or a hindrance. There is no middle ground here. You are either helping to grow the company or you are doing whatever you can, either deliberately or unintentionally, to undermine the success of the company. When things get tough it is imperative that as a manager, you get tough as well. The chair and whip therefore becomes an appropriate visual.
The $64,000 Question
If you are old enough to remember this TV show, you’ll remember that contestants were asked difficult questions about any number of topics. When markets turn, greater scrutiny requires asking difficult management questions, both of yourself and the team you manage. Here are my favorite “Top Five.”
Measure the Proper Metrics
Will a change in the market change what you measure? How about how you track what you do measure? I strongly suggest you re-evaluate your performance metrics. Are you measuring and tracking what you should be today? Greater visibility requires assessing and monitoring the performance of your team. The question you must ask is: “Am I measuring and monitoring the metrics necessary to drive the behavior my team will need to weather the storm of a slowing market?” When high volume clouds the picture, the metrics being applied are seldom questioned. In addition, we also have a tendency to fall into a rut of monthly reports, endlessly reviewed in the same manner. As such, some of this “rut review” ceases to have meaning because our senses are numbed by sameness.
As an effective manager, you must be sure that you are rewarding the appropriate behavior. Changed results require changed behavior. If you change what you are measuring (what gets measured gets done), you will change the overall performance. For example, if you want to drive volume, don’t measure just volume. Measure the criteria that will get you there. Examples include:
Managers today must reconsider the value of what they are measuring. Volume is an after-the-fact measurement. Get ahead of the curve by measuring the behavior that will ultimately drive volume. Don’t wait for volume to drop and then yell and scream that the sky is falling.
A wise sage once said “We don’t go through life, we grow through life.” He meant that we should learn from our past experiences. For those managers who have been in this business for over 10 years, you realize we live in a cyclical world. Markets ebb and flow as certain as the tides. It is incumbent upon today’s managers to recognize the hazards a changing market creates. Greater scrutiny requires greater manager vigilance and an ability to effectively deal with those suffering from “we’ve never done it that way before” syndrome. By asking the right questions and measuring the appropriate metrics, you will make your management job a lot easier.
by Bill Evans
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