So many companies face radical change these days. Sometimes it is external factors such as the “credit crunch” or merger/acquisition which drive the need for change, whether that is refocusing or re-sizing, and usually success depends on clarity of strategy and talent. The same holds if it is internal factors such as the loss of a key individual driving the need to focus.

A key interesting theme that comes up time and again relates to how you deal with a downturn. Just recently I have heard from several professional Associates and colleagues that they have clients whose first reaction has been to cut across the board. They have recognised that they “need to resize” and have instigated a 10% or 20% cut through their whole organisation. Is this smart or not?

Well, firstly, let’s think about what that means. A cut means that both the weaker and the stronger areas are treated similarly. While this can reduce the damage in the weaker areas it can cause damage in the stronger ones. Reducing resources and manpower can both reduce the availability and development of cutting edge offerings, on the one hand, and destabilise a valuable workforce, on the other hand. Clearly people will be unsettled when they hear a cutback announced, they become anxious about their job security and they become vulnerable to approaches from competitors. The people you least want to lose are the ones with talent. They are the ones your competitors will be most interested in attracting away.

Perhaps it makes more sense to cut selectively? If you are cutting costs you are reducing resources so it makes far more sense to think where those resources are most usefully concentrated. Reduce or shed the parts of the organisation which are underperforming and put more resource into the parts that are growing and profitable. Be selective with both resources and talent.

The bedrock for success depends on having talented people who are able to work well together. So you need to know

• who are your most talented people?
• how you can identify talented people to bring in to the organisation?
• how you can structure the organisation to get the best out of your talented people?
• how you can develop those people to continually improve their personal effectiveness?
• how you can help them to successfully lead teams in which each member has a strong sense of engagement?

Taking the first point, “who are your most talented people”, we always raise the related question “how did you make the decision that they are the most talented; how did you select them?”  This takes us straight into the minefield of the term “high potential”. Answers have ranged from the acceptable through to the naive. Many times the answer has been “they got a very good university degree”; once the answer related to whether or not someone played golf. The latter was a serious response and it was difficult to see the relevance in a financial services company!

The key point is that someone may have good academic qualifications providing a solid foundation for work. The technical skills they build and use may help them shine  but this may not be enough as they move up the hierarchy since the job specification and needs change with increasing seniority.

So what are we looking for as well as good intelligence?  Les Woller, in his newly published book “The Skill” stated that the greatest predictors of leadership success are the abilities to learn from your experiences and be adaptable. We will be looking at how these abilities can be identified and developed very soon.

1. What qualities and responsibilities will define the most effective leaders of tomorrow?
2. What skills and knowledge should you attain to become one of those leaders yourself?

He goes on to answer the questions by listing change management skills, deep knowledge of existing and emerging markets, the ability to inspire and motivate and, finally, lean management that can optimise efficiencies without sacrificing quality. 

Are you sure that you have sufficient strength in these four areas?  Congratulations if your answer is a definitive “yes”. But if your answer is in the “not sure” zone then you must take the opportunity to reflect. Our skills and experience can help you “get to yes”.

Jim Collins (in his book Good to Great) said “First who…then What. First get the right people on the bus, the wrong people off the bus, and the right people in the right seats – and then figure out where to drive it.” Bob Eichinger added an important point. “Make sure you have the right driver.”

Research has shown that there are some significant differences between those who are successful high performers and those who are less successful. The successful people are more likely to be learning agile, they seek and get more feedback, they have more variety in their experience and they grow and change. The less successful people show no pattern of learning from jobs and they can become the victim of past successful habits. They tend not to learn from mistakes, they are less open to new or different ideas and they often lack core interpersonal skills so they don’t relate well to others.

Research by Lominger has led to the suggestion that there are a number of elements – six in all – which are relevant to leadership. We will be looking at them in the next few days.