I am sitting in an airport lounge reflecting on a speech that I just delivered on raising the bar of supply chain strategy. It went well, but no one gave me a standing ovation or anything. It did make me realize what it takes to deliver a great speech. You need to keep the audience engaged with anecdotes and examples and you need to deliver valuable information at every turn. Reading from a bunch of Powerpoint slides does not cut it anymore. They keep the speech too structured and predictable.
The next speech I give will have less slides than I am comfortable with to force me to focus on the content in the delivery not the content on the screen. Great speeches have nothing to do with visuals or gimmicks, they have to do with engaging material and a flow that makes sense. None of us will be perfect, but we certainly should be improving our ability to communicate a message without visual aids.
Is environmental sustainability in business just a fad that we are going through as we try to make this world better for our children and grand-children? The answer is no, but not for the reasons that you may think. There are many reasons why sustainability and business will go hand in hand for years to come and here are two of them:
1. Sustainability saves money - when looking at your company's supply chain and making it more sustainable, the improvements that you make will have a positive impact on your company's bottom line. When looking to increase fill rates of trucks or reduce logistics costs or source from suppliers that use recyclable materials or reduce your packaging size, you are saving money. These actions result in reduced fuel usage, reduced power consumption, reduced waste disposal costs and the opportunity to find more cost effective methods of travel (rail vs air, etc.). It almost seems as though sustainability is really only a byproduct of running an efficient supply chain.
2. Sustainability as a competitive advantage - customers and consumers are now looking for products that are made from recyclable materials and companies that have no carbon footprint. Using environmental considerations as a part of buying criteria is only in its infancy for consumers and organizations. As this develops and becomes ingrained in our decision-making processes, it will only increase the desire for sustainable products and encourage more companies to dive in, whether to stay ahead of the game or only to catch up.
It is still a few years until the corporate decision-making paradigm shifts to having tangible environmental criteria built into it, but all signs are that the way we make decisions now is not the way that we will make them in the future. I suppose this is a good thing because we are shifting (or evolving) as our world evolves.
Amidst all of this talk of bailouts and closures for the auto industry, Ford has been conspicuous by its absence in all of the discussion. Why is that? It is because, unlike his counterparts at Chrysler and GM, Alan Mulally, the President and CEO of Ford, has figured out how to clean up his own house. He cut production, he cut costs, he improved the design of the cars to meet customer demands and he was able to get some concessions from the auto unions. But most importantly, he was able to do this without going cap-in-hand to the government for bailout money. Wow, that sounds strangely like how to run an effective business. The amazing part about it is that he has managed to do this with little press compared to his other Detroit counterparts.
Now let's put this in perspective. Ford is still going to lose billions of dollars this year, but they actually beat Wall Street's estimate of how much they were going to lose, which kind of sounds like they are the best of the worst. But I suppose there is reason for optimism in that we may have seen the worst of this economy and we have at least one US car company that seems to be able to avoid the bankruptcy courts. Mulally should be recognized for his bohemian efforts in leading the turnaround of Ford and he should get credit for doing what his colleagues at Chrysler and GM cannot seem to do, make the best of a bad situation.
Bonnie Brooks, CEO of the Bay, has taken on an intriguing challenge - how do you grow sales in a weak economy? Not only has she taken on the challenge, but she is projecting sales growth for the Bay in the coming year. Common sense tells us that is not possible, but great leaders tells us that it is. Ms. Brooks has unveiled a plan to dump unprofitable brands and bring in new lines to upsell more products to the Bay's target market. Why is this a good move in a weak economy? Because the customers are already in the store. Why not offer more products that would interest them? Why not offer those products in locations where most of the foot traffic happens to be?
What Ms Brooks is doing seems bold, but when you think about it, it only makes sense. You already have a customer in your store buying your products, so you offer them more products that they are interested in and they buy them. Seems like pretty simple math to me. The customer is going to buy them from somewhere and you are offering an easy alternative. I applaud Ms Brooks for pushing her plan to add new mid and high-end product lines at affordable prices. People are not always looking for prices to be slashed, but they are looking for quality goods at reasonable prices. If you can offer that, you will come out ahead of the game. As people's disposable income eventually increases, they will still want quality goods at reasonable prices, they will just want more of them.
In what can only be described as something out of a movie script, reports are now circulating that the father of the female child actor from 'Slumdog Millionaire" is trying to sell his daughter to the highest bidder. Can this actually be true? Rep0rts say yes, that the father is willing to sell his daughter because he has her best interests at heart. I guess the proposed $400,000 he might stand to make wouldn't hurt either.
This is a decision that is wrong on so many levels that there are not enough pages to describe it. However, the decision-making process being used shows how a faulty process can lead to a poor decision. By putting emphasis on money and his wants, the father is not considering what his daughter may want. Maybe she would rather stay with her family in India as opposed to moving in with strangers in the Middle East. Seems like a logical response, wouldn't you agree? This is only one of the many daily examples we see of poor decision-making and how the impact and consequences is not always taken into account. Does anyone else feel bad for the little girl?
I read this morning that a company called Conquest Vacations closed its doors yesterday without a hint of a warning to any of its customers. To make matters worse, some of their customers are in the middle of their vacations and are being kicked out of their hotels or being forced to pay additional fees to the hotels. The company's website says that all of the travelers will be taken care of, but the stories coming out of vacation destinations seem to be to the contrary. Hotels are forcing guests to pay up to $1,000 more to stay in the hotel because they have not yet been paid by Conquest. This is quite a predicament.
The current closure of Conquest goes back to a decision that was made over a year ago when deciding on how many airplane seats and hotels rooms to buy. As these seats and rooms must be paid for in advance, Conquest now has no money to operate and no ability to receive credit. They also significantly underestimated the downturn in the economy and were left with too much inventory to sell. Was this an effective decision? It is hard to criticize, but this is a company that has been around for more than 35 years in a very competitive industry. It sounds like a case of unnecessary risk-taking and not understanding the direction in which the economy was going. Just another example of how ineffective decision-making can lead to dire results for companies and their employees. The good news for Conquest's competitors is that the competitive landscape just got smaller.
There was a newspaper article this morning about Michael McCain, who is CEO of Maple Leaf Foods. For those that are not familiar with Maple Leaf, its' luncheon meat was linked to the deaths of 21 people in Canada last year due to a bacteria that was present. As CEO of Maple Leaf, Mr McCain made many good decisions after the crisis hit. We spend a lot of time blaming and criticizing leaders for the decisions they make, but not today. I want to praise Mr McCain for the way that he handled the crisis. Imagine the predicament, a food company linked to multiple deaths as a result of their food. This could have crippled the company. Instead, less than one year later, Maple Leaf has regained much of its reputation and it is still financially stable, although a little worse for wear. Not only that, but Mr McCain has taken this situation and used it to spearhead an initiative to increase the safety levels for all food manufacturers in Canada. When assessing the damage, Maple Leaf changed their internal safety and cleaning policies to not only meet government requirements, but to significantly exceed them. They are coming out of this crisis as the champions of higher food safety standards in Canada.
So what did Mr McCain do right as CEO of the organization? He made good decisions and exerted effective leadership:
- he immediately took responsibility for the crisis and made himself accountable for resolving it;
- he quickly developed a plan for dealing with the crisis including identifying the root cause and resolving it;
- he communicated publicly (through TV, radio and YouTube) the acknowledgement of the problem and the steps being taken to resolve it;
- he was transparent in his handling of questions and concerns;
- he became a champion for greater food safety standards for all companies across Canada.
This is what great leaders do, they accept accountability, they develop a plan to not only resolve the issue but to raise the bar for everyone and they communicate effectively and often. Mr McCain has maintained those characteristics throughout, which is not something that can be said for most of the leaders we have been reading about lately.
Why are so many smart people making so many bad decisions? Every morning in the newspaper I read about decisions that seem to go against every shred of common sense? It is simple, they don't know any better. They base the decision on a bad decision-making process. If you make a bad decision, do you ever go back and analyze what went wrong? What went right? My guess is no. That means the next time you make a decision, you will follow the same process as the bad decision. Does that make sense? I didn't think so.
The decision-making process is paramount to making good decisions. Not all of those decisions will turn out to be the right ones, but we also need to understand that they may have been the right decision at that point in time. Who knows what might happen in 6 months. Gather your information, make your decision and move forward. Too many companies are taking too long to make decisions and still end up making the wrong ones. There is nothing worse than continuing to make the same mistakes. If you are going to make a mistake, at least learn from it and improve your process for next time.