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Decisions based upon organization purpose

open quoteBeing scared of scarcity is like being fearless of needless

It was 2008 and it was touch and go whether they would survive.  They had mortgaged everything they could to fund a turnaround effort but still they were running out of money.

And then disaster struck!

The housing crash took the bottom out of their market – just like it had most industries.

Their competitors were going bankrupt.

They had already cut jobs, but more cuts would be needed – and even then it wasn’t clear that it would be possible to survive.

So what did Allan Mulally do?

Yes he cut jobs.  Yes he negotiated new compensation packages with his staff.  But…..

…..he absolutely, steadfastly refused to compromise on one area.

Why?  If everything else was being cut, what made this one area so special?

Because this one area, Product Development, was directly tied to their fundamental purpose as a company.  Good products for everyday people was the foundation upon which the company had been built and thrived for over 100 years.

The company was Ford Motor Company and its CEO was Allan Mulally.  The story of its turnaround can be found in the book American Idol by Bryce Hoffman.  The book is well-written and provides and in-depth look at how Mulally turned the company around.

A decision to compromise on purpose is a decision to compromise on sales and on productivity

When you are scared of running out of money, it’s tempting to revert to a hoarding mentality.  Cutting everything and just trying to hang on until the miracle happens.

The problem is that if you make decisions that compromise your purpose you are basically signing your own death warrant.

  • If your customer’s see you deviate – they will leave you
  • If your employees see you deviate, their fears will increase. And when employees are scared they bicker and focus on their own personal survival instead of working harder to get the results needed to turn the business around

And don’t fool yourself into thinking customers and employees aren’t watching

They are.  We live in a cynical world.  People spend their lives listening to messages that have been “spun” to be appealing.

Their go-to position is often to mistrust rather than to believe you.  Even when they risk trusting you, their radar is up looking for anything that indicates that they were mistaken.

And if you give them something to confirm their concerns of being “used”, it will be a tough road regaining that trust.

Although it can be tough when the chips are down stay true to your purpose.  If you don’t, you may feel like you are giving yourself more time, but you aren’t.  Instead you are putting yourself on life-support.

Lessons that they don’t teach in business school

  • When you have a purpose that is inspiring and NOT about money, you unleash an enthusiasm and commitment that can’t be delivered through compensation alone
  • Purpose can’t just be a statement on a boardroom wall, it has to underpin every decision the organization makes
  • When times are tough, it is even more important to make decisions based on your purpose

 

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