Challenging times and CEOs

About a year ago, I wrote an article titled What should CEOs really do? I then thought that my ideas would be valid for a period of time. What a difference less than a year makes. In the last six months, with the collapse of the financial markets, all the rules have changed, some forever. I thought it was time to revisit my last article, and update it. Hopefully it will help CEOs deal with these more challenging times.

I don't know anybody who can predict what the markets would look like 12 months from now, except that they will continue to be challenging. In my view, therefore, long term strategy is more or less dead.

A CEO needs to have clarity on the next 12 months' strategy with a mechanism of reviewing strategy on a quarterly basis, very much like rolling budgets. It would be safe to say that at any point of time, 12 months visibility of strategy will be all that one will really have.

Also the strategy will need to focus on short- term benefits, survival, and to a large extent the cost/efficiency side of the strategy, rather than revenue. The budgets will also need to be rolling.

Identify the top 10-12 financial, customer, process, organisational and IT objectives you want to focus on, and monitor the performance on those. Needless to say, strategy in each of these areas is to maximise the leverage of existing investments, rather than make new ones.

Also some may need to be exited. Track the top 10 projects required to deliver strategy, and eliminate/defer the rest. Put MIS into place that gives you all key metrics on a weekly basis.

As I wrote in an earlier article, it's time to reduce the headcount close to transaction volumes. That also means that management teams will need to become smaller as reporting/departments could be consolidated. You will need 3-4 change agents to help you through the tough times. Also it's time to recognise the performers with promotions, as they will help you meet the challenge.

Protect your customer base. Competition is going to chase them with the only fast weapon they know, which is price. Assign the customer base across the management team and increase the frequency of customer interaction at senior levels. This will not only protect your customer base, but also provide you additional revenues you need. The investment and sales cycle time for new customers is going to be the longest, giving you little choice but to protect your customer base.

Communicate like there is no tomorrow. Talk to your customers. Increase your marketing and communication frequency and investments. And most important communicate frequently internally with your employees. A weekly CEO email, followed by monthly town-halls is a bare minimum.

For most markets, the economic challenges could last a long time. Changes in CEO behaviour and the need to focus on the above will not be a short term change in management style but a long term requirement. It will therefore require many CEOs to introspect and make an honest assessment of what changes one will need to make.

Being a CEO in growth times is easy. Being a CEO in challenging times is what leadership will be all about.

- Sanjiv Anand is the MD of Cedar Management Consulting Intl LLC, a leading global consulting firm.