Mon, Mar 4, 2013
Some baseball teams have won the World Series playing “small-ball (hit and run, stealing bases, trying to get singles and doubles).” Others have played “big ball (stuffing the roster with hitters who can score with one swing of the bat and preferably with runners on base).”Any of them who has won has “left it all on the field,” taken risks along the way and changed a lot in real time to keep the opponent off balance.
My CEOs are facing what some see as the new normal: uncertainty in business investment, government policy, banks willing to lend and A+ talent willing to move. For the most part they are playing small-ball though with an implicit strategy.
One leads a global industrial company whose customers are at low capacity utilization and scratching for every cost saving; whose suppliers are so stretched financially that deals in the works have been shelved; whose key “keepers” have not seen incentive comp awards for over a year.
His response first focuses on small-ball: to evaluate risk of every new contract every week, adjusting more precisely the green-light criteria and the risk premium by geography, customer/supplier and raw material prices. This results in avoiding some new bets, making others, pruning existing businesses and incrementally building out available financing to keep the wolf from the door. The exceptions (big-ball) start with top-grading: hiring world class athletes for several key executive positions; beginning to execute a strategy that selectively green-lights high profit/reasonable risk projects where the company not only provides its basic services but also acts as lender/investor (a differentiator in this global economy).
Another CEO in a home services businesses has followed a similar path; finding ways to deliver more for less, hiring a street-wise direct to consumer marketing expert to use the thousands of marketing decisions each week as a laboratory for improving the media mix and the results; extending the footprint into contiguous geographies with little or no new capital at risk; modulating the incentives for each business unit head. Exceptions include hiring a COO to take on some of the CEO job and to bring fresh eyes to existing businesses, buying a going concern company in the same business in a non-contiguous city with a plan to more than double the initial sales.
I could list several others, both entrepreneurs and corporate chieftains. In addition to the mix of small-ball and big-ball what these leaders have in common is never accepting the status quo, always challenging assumptions and adapting. They show a degree of fearlessness in dealing with change as described by Adam Bryant in his column:
Bryant focuses on the experience-hardened confidence that underlies “being comfortable being uncomfortable” and taking more (calculated) risk; executives who, rather than maintain the status quo, are all about destabilizing things for the better. Are you one of these? Are you hiring for this quality? As another of my CEOs said: “I would rather have people I have to restrain than those I need to kick in the ass.”
That’s just my view. What’s yours?