Decisive leadership required for future success

29 June 2009 Ernst & Young

Today, it is no longer good enough for a company to hunker down and hope that the current economic crisis will pass you by. The only way to be ready to seize any opportunity that may come along is to have an organisation that is flexible enough react quickly.

This flexible organisation is a concept that management consultants have been pushing for the past few years. The collapse of many companies in the global market, that just a year ago would have considered themselves in a strong position, has reinforced the idea that in order to thrive into the future companies need to find ways to transform themselves.

Emlio Pera, Financial Services Sector Leader at Ernst & Young explains that even though for many organisations the imperative of immediate survival may be top of mind, the need to transform the organisation to be prepared for the future must not be ignored.

“Executive teams need to look at having a team that is able to make decisions quickly. This will be the key to success both in the downturn and beyond,” he explains.

He adds that organisations that are successful in a downturn have absolute clarity of their proposition, strategic direction and brand positioning. However this is substantially less valuable if it is not combined with responsive decision making.

Building the structure for responsive decision making requires that companies have immediate access to the right kind of information. These management information systems should be able to assist the management team in building a clear view of the competitive environment. It is this vision of how the market is changing that is vital to providing the competitive advantage needed to survive the downturn.

“Just because there is a decline in demand doesn’t mean that demand has disappeared,” Pera says. “Consumers are still shopping, but that the patterns of consumption that characterised the past few years are in the process of changing. Anticipating and reacting to those changes is the most important task of any management committee.”

As such the executive teams should focus their attention on their ability to work quickly and efficiently together. Pera comments that simmering hostilities and turf wars between different parts of the business can have a greater negative impact in this time than the deterioration of market conditions.

Conflict cannot always be avoided but Pera advises that taking an active approach to conflict management is a key to building a successful organisation. By resolving conflicts as they arise much of the energy sapping internal politics can be avoided and the full strength of the company can be focused on the task at hand.

“If there are elements of a company’s leadership team that can not come to terms with this reality then the time may be right to take radical action,” he says.

While it is not possible to always make the right decision, the effect of mistakes can be minimised by creating strategies to target multiple opportunities. Being able to build up multiple project plans and switch from one opportunity to another while still maintaining the focus of the organisation requires a steady hand and leadership that has the trust of the whole organisation.

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