First, Be Competent

Some say we are living in the era of “poly-crisis.” In other words, multiple crises happening at one time. They may be right, there does seem to be a lot going on: the war in Ukraine, record inflation, labor shortages and higher interest rates.

Recently, the world was mesmerized by the devastating injury, and then recovery, by the Buffalo Bills safety, Damar Hamlin. Beyond the happy ending, there was a valuable lesson; everyone did their job. The EMTs executed with speed and skill; the doctors performed the perfect standard of care; the players were sympathetic, the coaches strong; the announcers were pitch perfect; and the fans were genuine and respectful. The injured player was a wonderful young man; Americans rallied to donate $8 million to his charity. Everything worked.

Post COVID, this feeling is rare. We seem to be in a world where “nothing works,” including air travel, baby formula, hospital billing, car repairs, and immigration policy. Our national economic statistics on productivity are at an all-time low. I would say we have one major crisis, a crisis of competency. Lacking a foundation of competency, nothing else can change.??

Some leaders are putting “platitudes of purpose” ahead of “reality-based execution.” For instance, this has been a difficult year for advocates of climate change. Poor energy policy has spiked inflation. Broken supply chains have reduced the quality of clean tech products. Important cities, like Austin, run out of electricity because of aspirations that are disconnected from reality. Competency is the foundation for improvement.

A turnaround is needed, and it begins with these steps:

1)????Invest in training.?COVID created multiple waves of challenges, including work from home, hiring bubbles, incentives not to work, workforce supply issues. There are millions of open jobs in essential industries like healthcare and manufacturing. In tech, managers are laying off people they didn’t need and haven’t met. As a country we lack any mechanisms to match work with workers. In short, we are a mess.

We thought we were in the period called “the Great Resignation.” Remember that? Each company I worked with did surveys on why people leave. The answer, “I have a bad manager.” We can’t solve management issues with stock options.

The highly skilled EMTs who saved Damar Hamlin were well trained. We must reinvest in deep technical training, domain expertise, team building and the fundamentals of managing disciplines and accountability.?

In recent days, human resources has focused solely on recruiting and compensation instead of training and organization design, the foundations of culture. As a result, we sometimes have managers and employees who are “playing their company” instead of “thinking like owners.” Ownership is required to make the tough calls for enhanced competitiveness.

2)????Weathering cycles should be a core competency and career enhancer.?We have a generation of leaders who have never seen inflation and most are only now seeing a difficult cycle. But cycles are natural and can be a time to build competitive advantage. Frequently, investors put pressure on management to take a reactive approach or sell good businesses in down cycles. Some boards say, “shut everything down in the face of uncertainty.” When you shut down a high-tech, long-cycle business, it looks like a 30-car pile-up on the highway; it’s hard to clean it up.?

This is some of what you see in Commercial Aviation today; good companies underachieving because they over-corrected in the downturn. But great companies view down cycles strategically; they ask, “how can we get ahead?” I recently watched Daren Woods, the Exxon CEO, give a master class on cycle management on CNBC. Exxon doesn’t blink on the bad days (oil was negative $20/barrel in 2020). They have a long-term process. They don’t get distracted. They are competent.

3)????Work on what and who matters (only).?For most companies this is product execution, customer support, compliance, supply chain, and little else. In the midst of economic volatility, there just isn’t the time for second order process initiatives. Competency is sequential, not serial… you must be good at one thing before you can try another.

COVID confused people. For a while, we thought “where we work” was more important than “doing good work.” This is a great time to intensely measure your most important outputs; it is essential that managers connect with their team to understand how work gets done. The location of that work should be the place that maximizes connection and performance.

Downturns are a great time to upgrade performance management. Take extra time to give feedback. It’s also a great time to evaluate jobs. I am sure that 20% of your team does 80% of the important work. Know your “pillar jobs” and make sure they are fully productive.

Finally, a lot of you are working on restructurings. Never do a restructuring and end up in the same organization. This is a time to streamline decision making, reduce layers and simplify complexity. Your job as a leader is not to do more with less, but to do fewer things better.

4)????Be transparent about your intent. Admit to under-execution.?Admit to the challenge. Every employee, customer and investor understands that things aren’t working post-COVID. So face it head on. I still read 200 annual report CEO letters each year. I would love to read one that started, “In 2023 we will seek to be more competent.” Be open about what isn’t working and the organizational investments you are using to get better. Leave the platitudes for next year.

Former Walmart CEO Lee Scott once told me a story about Sam Walton, the company’s founder. Sam was doing a “field check” in a local store that was struggling, He asked the store manager “what is wrong;” the answer, “Well my competitors are advertising more. If we invested $35,000 per month in billboards, I could beat them all.” Sam replied that the manager had 20% of items out of stock, the store was filthy and understaffed. Fix those, and I’ll personally give you your ad money,” Sam said. The store turned around and the request for billboards never came.

Competent leaders know how people work and what they do. They invest in their people and help them do their jobs. They are reality-based and don’t blink during a down cycle. They focus on results, not process. Today, competency is the leadership mission.