Leaders In London

It’s more than likely that cost-cutting is at the top of your leadership agenda. Leaders who do it badly will cut costs in a way that impacts on service quality and there’s your downward spiral. You’re heading for trouble as customers are more demanding than ever when their own money is tight.

Leaders who cut costs right will do it in a way that doesn’t impact on service quality and may in fact improve morale, performance and employee engagement. They will be in the minority. Which will you be?

The leaders in the minority involve people in deciding on what should be cut, rather than locking themselves away behind closed doors and coming out with the classic kneejerk top management reaction to a recession – an instruction to cut costs across the board by 10%. Oh, how misguided can you get.

Captain Mike Abrashoff (that’s him in the picture - George Clooney lookalike), who turned around a poor-performing US naval ship to become the best-performing ship in the Pacific fleet in just a few months, got his sailors to suggest to him ways of saving money. They did the job, he reasoned, so they were best-placed to suggest how to do it better and cheaper.

One nineteen-year-old suggested using stainless steel rivets instead of iron ones. Abrashoff used the ship’s credit card to buy them from Home Depot, because the US Navy’s own procurement people couldn’t supply them.

The new rivets, and other initiatives suggested by the crew, saved so much money that in his first year in charge, Abrashoff returned to The Pentagon $600,000 of his $2.4 million maintenance budget and $800,000 of his $3 million repair budget. That year he operated on 75% of his allocated budget. And his ship’s performance figures went through the roof.

“We saved money not because we were consciously trying to,” he explained, “but because my sailors were free to question conventional wisdom and dream up better ways to do their jobs.”

Abrashoff, a remarkable man, is coming to Leaders in London in a few weeks to tell us how to do it. His brand of leadership is directly relevant to the challenges facing you as a leader right now. Don’t miss him. You can reserve your place here: www.leadersinlondon.com

So, you’re thinking ‘What quiet time?’ Leaders are always busy, right? Well, when do you think deeply, then…Make quiet time and use it to reflect. One reason leaders actually avoid quiet time is the question ‘reflect on what?’ It’s actually easier firefighting than taking head time to shape the agenda.

Captain D. Michael Abrashoff, who is coming to speak to us later this year, says you should use your quiet time to reduce risk by working through ‘what if’ scenarios. It’s particularly true in these tough trading conditions , where the environment is more unforgiving of error or miscalculation. On his website, Grassroots Leadership, Capt. Abrashoff answers a question, explaining how to use quiet time to reduce risk:

Memo from Capt. D. Michael Abrashoff

“It was very perceptive of you to link quiet time with risk taking. If you are constantly fighting fires, you don’t have the time to contemplate all that is going on around you and to think about the “what if” scenarios. After we instilled sound processes and procedures on the ship, it took about three months to get to a point where I was no longer continually fighting fires.

“I came to have the ability to carve out some quiet time for myself to reflect and re-dedicate. I found I was best able to do this when sitting in the Captain’s bridge wing chair and staring out at the ocean. On the bridge of a ship, there are only four chairs. Inside the Pilot House, there is a chair for the Captain and one for the Executive Officer. And, on the two bridge wings, there is a chair for the Commanding Officer only (so the Captain gets three of the four chairs!!!) . Everyone else must stand.

‘What if’ scenario planning

“This is really the one trapping of command that can’t be violated: only the Captain sits in the Captain’s chairs. These moments of reflection and quiet time enabled me to consider my “what if” scenarios and then subsequently the action we would need to take to prevail if faced with these situations. For example, what if we detected a missile coming toward us, set to impact in 30 seconds?

“I would go through what my initial actions would be and then I would mentally go through what I thought the actions of my watchstanders should be. Later, we would discuss and war game all the scenarios I could think up and then I would test the watchstanders to see what their responses would be under real circumstances. If there were deficiencies, then we could train to strengthen our weaknesses so that we would be experienced should any of my “what if” scenarios actually came to pass.

“The situations that we dreamed up were all worst-case scenarios. That way, we were always prepared to deal with the worst and still come out on top. Many times during the wargame discussions, the crew would come up with new and different angles to a scenario enabling us to see situations from everyperspective. We would analyze what it would look like if everything that could go right actually went right. And…we would also consider the downside and
what it would look like if everything that could go wrong actually went wrong.

Risk reduction through scenario planning

“We would examine where the critical points were, so that I could be there at these times to make sure everything was going right and that safeguards were put in place to ensure the desired outcomes. It was this thorough preparation that let me know what my limits were when taking risks.

“So…risk taking does not mean taking a leap into the unknown. You must first be prepared for all the possible scenarios and the upside potential, as well as the downside potential. That’s what I call taking “prudent, calculated risks.” ”

Posted on behalf of
Leaders in London
by
Phil Dourado