New Rules to do get job done in difficult times

I got to read a wonderful book "Leadership in the Era of Economic Uncertainty" by one of my favorite author "Ram Charan." The book was very inspiring so I wanted to share it with my readers my thoughts, brief summary of the book and my take on it, please do leave your feedback.

As leaders today, we all are faced with an unprecedented challenge: the world-wide economic downturn. Cash and credit crunches, sales forecast sinking and huge long tunnel of darkness that is leading to demoralized employees. These are the times when leadership is at it's true test. Specially for ones like me that are running small scale businesses. One needs to stare in the face of uncertainty and accept the changes that are coming to you. You need survive the storm and position your business to thrive in the aftermath. The golden rule is accept the reality and fight through these uncertain and difficult time with your star players.

In today's environment protecting your cash flow has become the most important challange for all the companies. Here are few steps as per the book one should vigorously pursue so one can fight back the ever-present lethal threat of lack of liquidity.
1) Shift your focus from viewing an income statement to viewing a balance sheet
2) Three internal sources of cas - earings from operations, workign capital and the sales of assets
3) Manage conservatively and lower your cash breakeven point
4) Cost reduction activities based on cash-breakeven point - Reducing work force and choosing the real change agents that will stay with the company (weaker players are replaced with high skilled people from outside), capacity

I am sure most of you know all these things, they are definitely bitter and painful, however the reality is "SURVIVAL OF THE FITTEST"

One needs to be even more hands-on and closer to their operational process than ever before, every leader in this volatile market should have a "grond-level intelligence" of his/her business. However still has the ability to see the big picture that is emerging after this monsterous downturn.

Leaders need to increase the frequency of control that they use to measure their companies progress and success. As current economic challenges shortens the life span of a business model and strategy. One should have real-time company finances to share with all level of employees in the company.

Sales and marketing forces are the eyes and ears of the company, they have become even more instrumental in these turbulent times. Brand value and identity has become even more valuable for the company to be a long-term differentiator. One needs to make sure that the customer's experience lives up to the promise of the brand. Here are few ways that Ram Charan's book suggests:

* First bring your focus to front line- evaluate the sales and marketing team restructure them if necessary and reinstate the goals, objectives and values of the company.
* Second scrub through the customers list and assign a customer value for them to effectively decide the long-term customers. This will help you to narrow the customers that you want to grow and get you biggest bank for your buck.
* Third assign some aggressive and business-savy salespeople to a business development role.

Refocusing on Innovation is a key for a company to hold its strong standing in future. Leaders need to re-think the R&D budget and not completly cut it. One should not solely focus on improving existing products. R&D is the fuel that will keep the company running in future.

Quick Summary for Today's Leaders
1) Recognize and accept reality
2) Be hands-on/ground-level intelligence
3) Be bold and transparent
4) Deterime strategic changes and watch your risk
5) Protect your core - people, asset, projects
6) Listen to people at all levels
7) Be honest about the company's future and financial health
8) Be constructive and specific in your actions
9) Trainee your people to communicate cross-functionally
10) Focus on synchronization

6 Essential Leadership Traits in Hard Times
1) Honesty and Credibility
2) The ability to Inspire
3) Real-time connection with reality
4) Realism tempered with optimisim
5) Managing with Intensity
6) Boldness in building for the future.