When talking with CEO's I'm constantly bemused about the lack of urgency in making key business decisions. They appear so laid back in saying 'yes' or 'no' preferring to sit on the fence with 'don't know' whilst the world, and opportunity, passes them by. In a crisis economy, which is here to stay for some time, why is this and what is the cost?
Todays' executives are the best trained, the best educated and the most pampered we have ever seen. In spite of the threat of a tsunami of unemployment, in most sectors and at all levels, leaders are uncompromising in their ambitions and desire to make a difference in both commerce and society. This is admirable but can lead to complacency and a lack of common sense in dealing with the realities of tough market conditions and a work force who are feeling stressed and vulnerable.
My experience with private equity shone a light on the need to act decisively and to make every day count in the search for a satisfactory, or spectacular, IRR. It felt like a ticking clock inserted into the back of my head, counting the days from entry to exit, keeping the dilution from high coupon loan notes to a minimum for the hard working management shareholders. This was a great discipline and one that is sadly lacking in many organisations. We count profit per employee but who counts profit per day?
The contemporary style of engaging our people, keeping them up to speed with key decisions and policies, and taking them with you, is commendable and works. But it slows things down. It makes decision taking, even small ones, a really big deal and can remove instinct and promote flip-flopping. Taking your time about which road to take can induce a frozen state that allows your competitors to overtake and leave you behind. It also smacks of weak leadership.
Nowhere is this more evident than in the vacillation over letting poor performers go. Although employment legislation is a major factor here, especially when the 'paper trail' hasn't been thoroughly followed, this is no excuse in allowing someone who is causing damage to remain in post. Old fashioned loyalties to one's colleagues are also a big factor, but our loyalty to our employer should be infinitely greater. The senior team makes or breaks any business, but too many CEO's hang on to mediocrity until their continued presence becomes an embarrassment and they are finally forced to act.
One way to up the pace in a company is to keep meetings short, and create a habit and culture of being punctual. If you're late for an appointment you give a perception of being sloppy, disrespectful and lacking in discipline - not great characteristics. And watch out for people who walk slowly! They are probably slow thinkers and workers too.
So, as Churchill once remarked: " Better yes or no, than don't know!"
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