Executive Leadership: Blog Series – Executive Insights for Q1 2021 Part 1
Focus on Executive Leadership: Every quarter, we’ll present insights from top executives from different backgrounds and functions. To help you prepare for Q1 2021, here are executive insights from Larry O’Toole, an experienced CEO of manufacturing and service businesses, and member of the Cerius network.
Focus on Executive Leadership: A Q&A with Larry O’Toole
What do you envision as the biggest challenges companies and executive leadership will face in Q1 2021?
For many business leaders, the lack of any crystal ball is causing a defensive posture; but for some, the opportunity to play offense.
The key challenges we will be facing heading into Q1 are: deciding where your market is headed; identifying your company resilience; evaluating the relevance of your Unique Selling Proposition; monitoring and managing your culture; and avoiding disruption or being the disrupter.
Each of us must pick a forecast for our business and manage to it. Should your focus be cost containment to continue navigating a storm that you believe will continue? Or do you begin to slowly (or quickly) prepare for a rebound? Deciding this will help you establish the balance of defense and/or offense that your business should be taking.
What’s your recommend strategy for addressing these challenges?
Conduct scenario planning. Now and heading in to Q1 is a time to be laying out various possible paths of growth your business might see. It would make sense to do a “best case,” “worst case,” and “most likely case” scenario plan so you can better understand possible business outcomes in the period ahead, which can give you proactive visibility to cash flow requirements.
Refresh your strategic planning process. Too many businesses either have weak strategic thinking and planning, or their process is stale. The old adage, “ask old questions, get old answers” absolutely applies to the current environment. Look at your strategic planning and ensure it’s driving new, innovative dialog among your team. And be sure you’re looking outside your four walls during your strategic refresh because the last thing you want to plan based only on what’s happening inside your four walls. Speak with employees, customers and vendors to get broader insights into your thinking and planning.
Remember that “your company data is your new oil.” Clive Humby coined this expression in 2006, and never has it been more relevant than 2020. Don’t assume you know about your business trends, such as customer buying behavior. Look closely at your data and see how it might be telling a new story from what you’ve known historically. Ask yourself, is my data telling me I’m selling a different mix of product/services versus historical performance? Are customers buying a different bundles than before? Am I looking at my product/service sales by units and revenues/margins, not just one or the other? Your data will tell a story—know what it is.
Know the difference between tactical and transformational cost management. Up to this point, most businesses have taken steps to reduce their cost base. These steps include reducing travel, reducing some marketing spend, reducing some of the labor force, etc. Logical steps, but these are tactical and only effective if your market is going to bounce back more quickly.
However, if the pandemic may be changing your market and business for a longer period, you may not have enough tactical costs to help you, both cash flow and profit-wise. Transformational costs are those that mean changing your business model or your fulfillment model to something more efficient, and these will help you now and longer term. Ask yourself this: When our market returns, will our costs quickly return, as well? Or are we making more meaningful, transformational improvements to our business so we benefit longer term coming out of this pandemic?
What are the critical skill sets companies will need to survive and thrive in Q1 2021?
Imagine an NFL linebacker that isn’t good at tackling, or an airline pilot that isn’t good at filing flight plans. You can’t imagine this. As business leaders, our competence should be strategic thinking and planning. This is a critical skill set needed now to survive and thrive. Ask yourself this question: Is my planning process an enabler during these uncertain times?
Leadership Emotional Intelligence:
A critical executive leadership skill set needed at any time, and certainly now, is being able to read the environment around us and know how to navigate it. Ask yourself this question: Is my leadership team in touch with what’s on the minds of our employees and key customers, and are we navigating it effectively?
This is always key, but certainly becomes more essential during uncertain times. I always encourage business leaders to know the difference between quantity versus quality of communications. Ask yourself this question: How effective is our internal and external communications? Are we striking the right balance of quantity and quality?
Continuous improvement culture:
The thoughts business leaders need to keep in mind are: What can my team do today that’s better than what we did yesterday? Tomorrow, where and how can we do better than we did today? Ask yourself these two questions: Do I and my team have a continuous improvement mindset during these challenging times? Are we having the right dialog in this area?
Larry is an experienced CEO of manufacturing and service businesses. He founded Yosemite Associates introducing the Greenpoint™ and Bank your moment® campaigns to help owners extract the uncertainty around building company worth. Larry is a corporate director and advises a diversified group of owners on their worth-creating journey. [email protected].