Turning a bleak situation into success is the challenge of many great leaders. Those brave managers who accept the challenge to turn the sinking ship into a full steam ahead vessel understand key strategies for making the upturn.
Executives such as Ford's Alan Mullaly and El Taamir Mortgage Finance Company – Al Oula's Hassan Hussein and Hans Ackerblom are such successful leaders. The former two executives took their companies from the red to the black through value based leadership. Mullaly kept Ford afloat in the auto industry crisis of 2006 and Hussein took Egypt’s largest mortgage finance firm from a negative cash flow of $350 million to profitability in five years. Ackerblom used his successes as CEO from several companies in Sweden to develop the LOTS Scandinavian Leadership philosophy guiding numerous business leaders.
1. Have a compelling vision
Perhaps leaders know that any successful company needs to have a strong vision, yet still they deviate. Strong vision is not always a compelling vision, which is meaningful enough to want to stick by no matter what. Ford's Mullaly shared his strategy in an interview with McKinsey’s Rik Kirkland. Mullaly emphasizes the importance of having a compelling vision and a comprehensive plan with positive leadership that is devoted to always move forward.
Sharing this attitude, Hussein established the clear vision for his firm to focus on providing necessary services for his cutomers. Hussein said. “What was important was to change the company’s philosophy from a government-owned company to a more private sector mentality.”
According to Hans Akerblom, founder of Scandinavian Leadership and LOTS, a compelling vision is one that focuses on what is best for the customer, because the customers are the reason why the company can exist.
2. Value The People That Make Your Team
Employees that feel valued and engage in the company's mission will be loyal even in a company downturn.
At Ford, Mullaly developed a culture of consistent purpose, respect and helping each other succeed. He is quoted to say, " it is important to create a safe environment for people to have an honest dialogue, especially when things go wrong."
When the Al Oula company was in debt, Hussein resisted the temptation to enact layoffs. He not only retained all of his employees; he invested in them. Employees who were directly responsible for generating cash were rewarded with incentives, and the staff was trained in every area of the company’s operations. As a result, several employees were able to pass licensing exams and, consequently, become legitimate professionals. “All of that has communicated a totally different company from what it used to be when I started [with] the company,” Hussein said. Hussein's change in philosophy was accompanied by a change in company culture.
Company culture that follows the LOTS Scandinavian Leadership style focus on practicing equality and human rights in the workplace. With such emphasis, employees can feel just as important and invested as the CEO.
3. Looking ahead is critical
Beyond having an executable plan and a change in culture, companies need to know how to move forward into the future. "We talk about more than what our customers value right now. We talk about the forces in the world that are going to shape what they will value in the future," McKinsey quotes Mullaly.
For Al Oula, turning to the future meant a greater focus on the global market. Hussein took the cash influx and opened two new businesses in leasing and real estate investment. “I think they [executives] have to know the markets that they want to venture in and to know how does it benefit the present business, and to try to link the two together in a way with a clear strategy for the future,” he said as speaker at the EuroMoney Egypt conference this year, which he has sponsored for the past five years.
Ackerblom drives an "outside-in" philosophy as his LOTS coaches guide leaders to take the worldview first - to be expansive and future thinking. He encourages curiosity to counteract the gravity pull to stagnate. Ackerblom understand that a company goes in only one of two directions: growth or atrophy.
Thriving success in an endeavor starts with leaders who have a compelling vision, value people and expanding foresight. When a company takes a downturn, the same strategies hold and a courageous leader is needed to bring them forth again.