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Leading In Tough Times
By Bob Seelert,
Author of Start with the Answer: And Other Wisdom for Aspiring Leaders

The financial crisis that began in 2008 continues to unfold in unprecedented ways, thereby presenting business leaders with incredible challenges. How does one manage in such a crisis-laden environment? Here are “Ten Things To Do” based on my 40+ years in business.

#1 — Get the truth out on the table. You need to begin with an open, honest, candid assessment of the facts. Sometimes the truth can be ugly, but you’re not in a position to deal with it until you get it out on the table. Making unrealistic assumptions only will prompt inaction, with things getting worse before they get better. Get out in front of the problem.

#2 — Establish standards for the new reality. When markets collapse, you can’t be sure how far they will fall, but you can establish an expectation for how your company will perform relative to whatever happens. At Saatchi & Saatchi, even though our revenue may be down year to year, we expect to outperform the market by 50%. This sets a high standard for our people. We also recognize that there will be margin pressures, but we expect to “draw the line” at X%”, in order to preserve our financial profile for the future. This implies tight management of costs at the same time we aim to outperform the market.

#3 — Think long term; Act short term. Downturns in the economy present the opportunity for far-sighted companies to go for share of market. Inevitably, some of your competitors will pull back when times get tough. Take advantage of this to position your enterprise to gain when the inevitable market rebound takes place.

#4 — Communicate, communicate, communicate. This is the time to increase the frequency of your internal communications and heighten your personal presence in front of the organization. People are understandably nervous and sometimes scared during uncertain times. Now is the opportunity to rally the troops and give them reassurance that your company will be out in front in dealing with what needs to be done.

#5 — Get “All hands on deck.” Tough times call for extraordinary efforts on the part of every employee. You can’t get the job done alone. Now is the time to enlist every person in doing whatever must be done to ensure survival and prosperity. Outhustling your competition is the surest path to gaining share of market.

#6 — Get out with customers. Heightening your interaction with customers will keep you tuned in to their needs and give you constant feedback regarding where the environment is headed. Meeting customer needs and exceeding expectations are the two sure pathways to success.

#7 — Stay true to what made you great in the first place. Most high performing companies got that way for a reason. Now is not the time to lose sight of this. Toyota has achieved success in the U.S. car market through innovation and continuous improvement. Despite the current downtrend in auto sales, they are innovating by introducing the Venza, and putting into the marketplace the third generation improvement for the Prius. These are the kind of actions that will keep them out in front.

#8 — Reframe value for the new environment. Marketers should reassess their messages for relevance in the current economic conditions. Tide always has been the best laundry detergent, but in this environment, it doesn’t hurt to remind consumers that its color integrity feature keeps new clothes looking new longer. For Olay it’s relevant to mention that the cost of Olay pales in comparison to more invasive or surgical procedures.

#9 — Add/Reduce; Create/Eliminate. Despite the economy, it’s likely that your company needs to add some new positions and create some new capabilities in order to meet the demands of the marketplace. You should press ahead in these areas, but you need to have the organization simultaneously thinking about how it reduces and eliminates things as well. Tough times force trade-offs.

#10 — Set tight priorities. Now, more than ever, is the time to set tight priorities. Decide what is core, and what is non-core, and focus your time and attention on the critical few things that will make a difference.
Tough times can bring out the best in organizations and prompt actions that will position your company for future success. Follow these ten things and you will do well.

©2009 Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders

Author Bio
Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders, is Chairman of Saatchi & Saatchi, a leading global ideas and advertising company. A graduate of Harvard College and Harvard Business School, he has been CEO of five companies, has built brands and businesses, been a party to two mega-mergers, and enacted numerous turnarounds. He has served on boards of directors of companies in the United States, the United Kingdom, and France. He lives in New Canaan, Connecticut.

For more information please visit www.StartwiththeAnswer.com

Start with the Answer
by Bob Seelert,
Author of Start with the Answer: And Other Wisdom for Aspiring Leaders

My most important management philosophy is “Start with the Answer, and work your way back to the solution” As a starting point, I apply this approach to virtually every situation that comes across my desk. Once you understand the basic facts, where you want to position your organization or yourself should become obvious. The real question is, “How do you get there?” Instead of wasting time dwelling on the problems of the past, you should devote all your energy to creating solutions for the future.

Such was the case when I checked in at Cordiant in July 1995. At the time, the company was losing money due to the tumultuous events of the previous six months. The founders of the company were gone, 6% of the revenue had walked out the door with them, and a large amount of debt was coming due far too soon. Not a pretty picture!

The first two priorities were stabilizing clients and staff, and refinancing the company. Many of the people in the company were caught up in the issues of the day and all the reasons we were losing money. To refinance the company, we needed to produce a credible five-year financial forecast.

Rather than responding to gloomy forecasts, we chose a totally different approach. We started in the external world of the industry in which we were competing by assessing how the Peer Group Composite, made up of Omnicom, WPP, and Interpublic, was performing. After all, these companies were in the same business we were in, we competed for new business in the same pitches, and the market dynamics that affected them were the same ones that affected us.

We learned that we were in a growth industry with worldwide media spending increasing at a rate of 5-7% per year. Beyond that, the major holding companies were growing at a faster rate due to trends toward globalization and clients consolidating advertising resources. The Peer Group Composite was achieving operating income in the range of 10-12% of revenue. Adjusting our business for the scale effect of their larger businesses, we concluded that if 10-12% margins were attainable by them, then an 8-10% range ought to be achievable by us. These business parameters became “the answer,” and we could now devote all our energies to doing what it would take to get us there.

Recognizing the dire nature of our starting point, we set a three-year time frame for success. Three years later we were there, having grown revenues faster than the market rate and earnings per share better than 25% per year. The key element in this achievement was starting with where we wanted to get to, rather than being consumed by the depths of the situation we were in.

BOB’S WISDOM: The first step in a business plan is to “start with the answer” and then devote all your time and energy to work your way back to the solution.

The above is an excerpt from the book Start with the Answer: And Other Wisdom for Aspiring Leaders by Bob Seelert. The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy.

Copyright © 2009 Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders

Author Bio
Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders, is Chairman of Saatchi & Saatchi, a leading global ideas and advertising company. A graduate of Harvard College and Harvard Business School, he has been CEO of five companies, has built brands and businesses, been a party to two mega-mergers, and enacted numerous turnarounds. He has served on boards of directors of companies in the United States, the United Kingdom, and France. He lives in New Canaan, Connecticut.

For more information please visit www.StartwiththeAnswer.com

Ten Rules for Leading the Turnaround of a Declining Business
by Bob Seelert,
Author of Start with the Answer: And Other Wisdom for Aspiring Leaders

I have been involved in turnaround situations at Topco Associates, Kayser-Roth Corporation, and Cordiant. The similarities between these situations were greater than the differences.

In each case, they were companies that had fallen on hard times, but there was a belief that they could rise again like a phoenix from the ashes. Additionally, the fact that the companies were not doing well was by no means a secret to the employees, who were always eager to have the leadership that could bring it all back together and get things moving again.

Here are my ten rules for a successful turnaround:

Rule 1. When formulating goals, start with the answer and work your way back to the solution. Do not get bogged down in the morass of yesterday. Get going toward where you need to be in the immediate future. At Cordiant, we developed a five-year financial forecast within three months of arrival that we used as the basis for refinancing the company. Subsequently, we exceeded every benchmark of that forecast.

Rule 2. Get out in front of people immediately and position yourself as the new leader in the company. Tell them who you are, what you believe in, why you are there, your perspective on the situation, and how you intend to proceed. At Cordiant, I visited all the principal people and major locations in London and New York in my first two days.

Rule 3. Bring an extraordinarily high sense of urgency to what you are doing, but also look before you leap. People are anxious for results, but this is no time for dead ends. Think carefully about everything you do, but keep moving. At Topco, we immediately commenced development of a line of environmentally-friendly products because there was an obvious niche and need in the market for them.

Rule 4. Do not sit around headquarters! Get out to where the work is done — plants and field offices. You need this input, and you need to be a motivating force for people. At Cordiant, I got around to offices accounting for 60% of our revenues in the first six months.

Rule 5. Go out and listen to customers and clients. At Kayser-Roth, one of my first visits was to Wal-Mart. They told me, “Mr. Seelert, we are concerned about the viability of your company as a supplier.” Two years later, we were named their vendor partner of the quarter. If I had not personally gone there to listen and learn, I doubt that this would have happened.

Rule 6. Listen to everybody in the organization who offers an opinion about the business — don’t just hang around with the people who report to you. There are two sides to all coins and stories. You need to understand both. If you can, meet with your competitors or the heads of similar organizations. When I went to Cordiant, I met with the heads of other holding companies, agency networks, consultancies, and service organizations.

Rule 7. Recognize that you cannot get the job done alone. Open communications and clearly assigned accountabilities are essential. Your visits to locations provide the forums for rallying and directing the teams, as well as quickly identifying the true talents across the organization.

Rule 8. Lay out your vision, purpose, values, beliefs, objectives, strategies, and plans for accomplishment as quickly as possible. People cannot really get going until you set the right direction. At Cordiant, I laid out my initial vision on day one. to be the “World’s Best Creative Communications Resource.” I indicated that I would be a good listener and that
together, we would drive the vision forward from there.

Rule 9. If you do not have the internal resources to get the jobs at hand done, do not be afraid to use outside resources. At Cordiant, we employed Price Waterhouse Business Turnaround Services, At Kayser-Roth and Topco, we hired Luther & Company.

Rule 10. Develop the short list of critical priorities and stick to it. At Cordiant, it was two things: stabilize clients and staff, and refinance the company. Accomplishing these two goals set the stage for everything else.

BOB’S WISDOM: Turnarounds are intensely difficult 24/7 situations. Follow the ten rules and you will prosper.
The above is an excerpt from the book Start with the Answer: And Other Wisdom for Aspiring Leaders by Bob Seelert. The above excerpt is a digitally scanned reproduction of text from print. Although this excerpt has been proofread, occasional errors may appear due to the scanning process. Please refer to the finished book for accuracy.

Copyright © 2009 Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders

Author Bio
Bob Seelert, author of Start with the Answer: And Other Wisdom for Aspiring Leaders, is Chairman of Saatchi & Saatchi, a leading global ideas and advertising company. A graduate of Harvard College and Harvard Business School, he has been CEO of five companies, has built brands and businesses, been a party to two mega-mergers, and enacted numerous turnarounds. He has served on boards of directors of companies in the United States, the United Kingdom, and France. He lives in New Canaan, Connecticut.

For more information please visit www.StartwiththeAnswer.com