World markets have been caught in the riptide of Greece’s 3rd bailout in 10 years. Systemic and widespread resistance to austerity measures has contributed to a staggering debt load – 177 percent of GDP. While observing the negotiations, missed deadlines, and public protests, I consistently see parallels to my client organizations.
As Brent crude oil prices approach $50 a barrel and “futures” reach a new low, North American oil and gas executives are asking how to best respond to this new reality. They are not alone in facing fundamental shifts in their business.
For several years, banks responded to declining spreads (resulting from low interest rates) by raising fees. They have reached a ceiling as consumers and commercial customers are resisting further fee hikes. A low interest rate environment has become the new normal for banks.
Southwestern Ontario once boasted a healthy economy fueled by jobs in auto manufacturing. Toyota’s April announcement to relocate Corolla production to Mexico was another step in the declining sector in Canada.
Adjustments are required… big adjustments in some cases. What frustrates me is the massive opportunity cost in some organizations.
Greece has wrestled with their debt challenge for more than a decade. Of course there was resistance to austerity measures. They had a culture of entitlement, of tax avoidance, and early and fat retirements funded by younger workers. This culture did not magically disappear while politicians danced around the tough decisions to be taken.
These realities of our new world cannot be addressed simply through staff layoffs. We cannot afford to turn our heads to the side, hoping that things will change or improve again or maybe someone will bail us out.
We require smaller, more adept executive teams and fewer layers of management. We require new business models and foundational changes. We require courageous leaders who will stand up and say, “I do not have all the answers. I have never operated in an environment quite like this. I will need the collective intelligence of all employees in this organization.”
In the best examples, I see leaders making tough decisions and taking actions that extend beyond staff layoffs. These include restructuring their management teams and re-visiting compensation practices. These leaders are engaging staff, customers, and suppliers in conversations every day, seeking new ideas and a different perspective.
Your employees have great collective wisdom. Employee disengagement has become a global epidemic, largely fueled by employees feeling like they are not contributing to their full potential. Engage them in the conversation and in developing the roadmap for the future.
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