Manuel Bermejo. Professor. IE Business School
1 April 2009
The long honeymoon that the Spanish economy has enjoyed means that many senior managers have not yet had to rise to the challenge of a crisis. The moment has come for a complete change of the way we think and manage.
The current period of crisis and uncertainty is leading to tension and difficulties for company managers. In addition, owing to a lengthy period of growth in recent years, a good part of the senior management of many businesses has never had to face the challenge of managing a company with the wind against them.
It is time to recover a strategic view and act differently since the outlook has changed radically in recent months. Therefore, the first consideration would be to move away from old paradigms that almost certainly cannot be applied in today’s world. We need to adapt to the new context and, as human beings, that is never an easy task.
With this in mind, I offer the following Decalogue:
- Management by values: I consider it fundamental to recover values such as austerity, honesty, long-term vision, strategic alignment, commitment, work, perseverance, social responsibility… It is not a matter of earning money at any price and ignoring everything else. Speak with many family business owners and you will find magnificent examples of what I am talking about.
- Strategic thought: separate what is urgent from what is important. Many important issues are never approached and give rise to situations that are unsustainable in the long term. Government bodies must be created as true watchtowers to gain a peripheral view and take decisions that anticipate change. In all sincerity, many of today’s difficult situations could have been foreseen some time ago and corrective measures could have been taken, but sometimes you can’t see the wood for the trees.
- Constant innovation: in products and processes and, in particular, the development of proprietary technologies. Having proprietary technologies is a source of excellent competitive advantages. Of course, it requires long-term investment far-removed from the opportunism that is typical of a certain number of Spain’s entrepreneurs.
- Globality: there are opportunities beyond your local area. You must have a peripheral vision and extend your area of action.
- Make use of new technologies to be more efficient, to grow without so many resources or to connect with many social strata that are true paradigms of changing lifestyles. For many veteran managers, having a website is a necessary evil and the emphasis is still placed on having a clean, sparkling reception area at the company. That’s all well and good, but people don’t look for you at your offices anymore; they look for you on the net.
- Pay attention to talent: the real shortage. A lot is said about oil, water,… but talent is an extraordinary asset. Motivated, committed talent is unstoppable.
- Management: separate the muscle from the fat. It is easy to take the obvious measures when things go wrong, and they usually affect the muscle. Sacrificing muscle (read talent, technology, brand, training…) is a short-term solution that will not help when the chickens come home to roost.
- Size is important in most businesses. General government measures are all well and good, but I think specific measures need to be created to support medium-sized companies that have tried and tested business models, proprietary technology, talented staff and an excellent potential for growth. This could create thousands of new Spanish multinationals as a driving force behind development in the coming years and help change the production model. Many very good businesses in Spain have been overlooked by those who have worshipped the golden calf of the construction sector.
- Entrepreneurial management: there are still opportunities because society changes continuously and it is looking for value-added more than ever. The growth of models such as fast-food or private brands does not offer clear clues to this. The challenge facing senior management is to guarantee the sustainable growth of enterprise and that includes entrepreneurial management.
- The search for the comfort of leadership: always run your company side-by-side with leadership, because talent, customers, suppliers and other stakeholders prefer to be with the leaders.
This is the moment we have been given and now we need to change from the “the thing is that” culture to the “what we can do is” culture. As one veteran and very successful Spanish entrepreneur told me: don’t say crisis, say opportunity.