Hard Decisions are not made in Good Times

Hard Decisions are not made in Good Times

February 7th, 2013 // 11:36 am @

The tough questions and decisions that leaders are supposed to make are rarely faced up to when things are going well, often with disastrous results.

Whether it is a country or a company there are the big questions, the elephant in the room questions, the ones that will make or break the organization over the coming years. It is often the truth that these questions are never even voiced, let alone tackled.

Across the business landscape we have what were major brands going out of business because they were unable to face up to their big questions. Comet, Blockbuster, HMV and many more will follow.

These were companies with massive expertise in their industries, with supplier relationships, distribution infrastructure and a close understanding of their customers. Yet they all succumbed to what were very predictable changes in where their customers, and in what format their customers purchased their product.

It is not that we have stopped buying electrical goods, watching movies, or listening to music. All that changed was how we did it, and these companies who should have been well placed to use their expertise to make this transition, failed completely to do so. We buy our electronics from Amazon, our films from Lovefilms, and our music from Apple. None of these companies was in these markets 10 years ago, but they have completely destroyed the traditional major players.

There are a number of reasons behind each company’s failure, but behind them all is a simple fact of human nature.

We do not like to face up to potential Armageddon, and accept the consequences of that. No one thanks the CEO of a successful company who says, “Our business must change completely in five years or die”. Even if the board accepts such a statement, turning the need for change into action on the ground is difficult and expensive.

When the CEO of Kodak told his shareholders who had enjoyed healthy profits for decades that the film business would all but disappear he came close to being sacked just for making the statement.

The same happens within countries. I am sure the government of Greece knew 5 years ago that they could not go on indefinitely spending borrowed money, but no one wanted to face up to that reality. Like shareholders the Greek electorate was having good times, and did not want to be told the hard truth.

It is simply human nature not want to accept what seems unacceptable. It is however the role of true leaders to see these issues well in advance, explain them to their shareholders or electorate and start the change early.

Business in modern times works the same way it has for years, what is different is the speed of change. One can go from being a household name to bankruptcy in short order these days.

In fast moving times we more than ever need true leaders, for our companies and our countries.

Category : Blog &Leadership

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