Being primed and ready for the unexpected has always been a valuable talent. In today’s turbulent business environment, where mergers, acquisitions and reorganizations are changing the face of American business, managers need that adaptability more than ever. What are the skills that allow good managers to respond readily to change? There are five principal ones:
1. Problem-solving ability. Because we’re a global economy dominated by multinational companies, problems are appearing much more quickly and they are more severe than they were before. There is a lot of ambiguity and there are many paradoxes. Along with polished business smarts, you must also be problem-smart. Your antennae must detect problems early and be sensitive to potential difficulties before anyone else’s. Your intuitive powers must be razor-sharp so you can detect a problem’s early warning signals. Once found, you can determine the appropriate solution.
Example: BankAmerica built expensive banks all over California. As the company expanded, the ground collapsed from under it because it was unable to anticipate problems early. For example, it was slow to pick up on automated banking systems. To grow rapidly, the bank doubled agricultural lending and added $9 billion of foreign loans and $8 billion of fixed-rate mortgage loans. The strategy backfired by eventually producing huge loan losses and an accompanying interest rate squeeze that provedpainful.
2. Interpersonal understanding. Know how to work with people and get things done through them. Be able to identify the other person’s objectives and find viable ways to realize them. Step into the other person’s shoes so that you can understand the individual’s objectives and offer practical solutions for realizing them.
Example: People Express’ Donald Burr developed the idea of airbuses. Instead of designing a product (airline) to suit his customer’s needs, Burr designed his product so customers would conform to the airline’s standards. People Express offered cheap fares and nothing else. The concept worked well for about a year and a half before travelers stopped putting up with constant delays, erratic treatment or service and crowded travel accommodations.
Structurally, the company was a disaster. It had a minimal bureaucracy, an inefficient deployment of workers, and a disorganized chain of command. Tack on an unstable airline industry picture, and it was no wonder Burr was unable to use his people productively. When you’re in a volatile environment, discipline within the ranks is crucial. If you have no clear leadership in such crises, workers flounder and the operation falters.
3. Analytical powers. Good managers must be able to understand complex subjects art reduce them to manageable essentials. There is only a handful of solutions to any complex problem. A balance sheet, for example, contains an overwhelming amount of information. But when you establish your objectives, the numbers become a lot clearer and you can zero in on the essential ones that tell you what you need to know. There is a great deal of information available to managers, making it expedient to know how to access, interpret and analyze the most important facts that each situation demands.
Example: Thornton Bradshaw had his hands full when he assumed the helm as CEO of a dangerously listing RCA in 1981. The company was in a state of chaos and decline. Within six years, four chief executives and a roundtable of presidents andsubsidiary heads came and went with no sign of stability on the horizon. Profits plummeted by 83%. Bradshaw analyzed the mammoth company and isolated the core businesses, which were entertainment (NBC) and consumer and military electronics. Everything else (Hertz Rent-A-Car and CIT Financial, for example) was deemed extraneous.
The diversified company lacked identity. Bradshaw put RCA back on track by trimming unnecessary fat, streamlining the operating companies, and enhancing those operations that could restore it to a leadership position. When the company was finally turned around, Bradshaw sold it to General Electric, a brilliant, calculated maneuver.
4. Sensitivity to change. Change is inescapable in today’s shifting business environment. The idea is not just to be flexible and adaptable so you can adjust to it, but to anticipate change. The attitude shouldn’t be, “How do we get the thing organized so that we can deal with what’s going on?” but, “How will we make this thing go when what’s going on changes?”
Example: USX, the nation’s largest steel producer had to cut its white collar work force by nearly 60% between 1982 and 1986. Management watched the change taking place in the steel industry, but did little to cushion itself against a dwindling market.
5. Composure under pressure. When things get hot, you must keep cool. There is no secret remedy for success. High-functioning managers cope with stress in a number of ways. They jog, swim, bike, play racquetball or golf, meditate and listen to music. It doesn’t matter what escape valve you use. If it relieves tension, continue to use it. But even with tension-relieving techniques, it pays to be a little on edge, a trifle nervous. A little burr under your saddle helps you sprint into action when an emergency strikes.
Example: When the airline industry was hit with an air traffic controllers strike in 1983, Drew Lewis (now president and COO of Union Pacific Corporation), then Secretary of Transportation, kept his cool when the controllers lost their perspective. He fired all the controllers, broke the union and was hailed as a hero. Despite the strike, he kept the airlines running. He kept his emotions in check, remained calm and in control, and acted rationally as well.
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