Duke Research Advantage

This is the final installment in a four-part series of postings by Strategy Professors Will Mitchell and Richard Burton. Mitchell and Burton outline four principles for leading your business as an opportunity driven strategist in tough times, rather than falling into purely defensive positions that are destined to be overwhelmed by economic pressures.

PRINCIPLE 4. MOTIVATE YOUR PEOPLE

We have already told you that part of principle 2 is to “invest in your people”. So, why are we coming back to people? Well, we were reminded about the importance of motivation by a recent talk to the graduating Global Executive MBA class at Duke University by Ferdinando Beccalli-Falco, the CEO of GE International. Mr. Becalli-Falco’s core point was that you will not survive tough times without the commitment of your people.

In our experience, when times are good, the second thing that comes out of our mouths, after “we are customer focused,” is usually “our people are our most valuable resource.” But most of us do not really practice the people mantra. We take advantage of the rising tide to succeed as businesses despite under-performing in how we motivate and build on our employees’ insights. We do not have that luxury when times are tough.

When times are tough, it is easy for people throughout a business – from the board to the shop floor and the point of service delivery – to lose faith in our survival. Once that happens, failure becomes a self-fulfilling prophecy. We cannot be credible with customers and partners if our people do not believe that we will survive.

As leaders of our organizations, it is our job to articulate a clear and honest sense of the opportunities that we are aiming for during the tough times – including both reinforcing existing advantages and creating new advantages – and the activities that people throughout the organization will need to undertake to help achieve those opportunities. If we are clear about both the opportunities and the roles, then most people will rally round and be excited about contributing. Those who do not rally round can leave – which, frankly, is fine. Those who stay will be powerful agents for survival during the tough times and powerful agents for explosive growth when the business environment revitalizes.