The Real-Life MBA: The no-nonsense guide to winning the game, building a team and growing your career. Suzy Welch

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СКАЧАТЬ housing bubble burst. That was tough on HDS, of course, but the company was able to pivot to its secondary market, commercial real estate, which is typically countercyclical with residential. A few months later, though, the entire building sector went down the tubes with the recession, and HDS’s revenues eventually fell by 40 percent. Just to stay alive, the company let go of 12,000 of its 26,000 employees, sold three of its business units, and shuttered a third of its branches.

      To make matters worse, at the time of these events, HDS was already in a precarious financial situation. Recently spun out of Home Depot and sold to private equity, it was loaded with debt. Indeed, for all the good PE can do rescuing and realigning companies, this is one of the industry’s major downsides. Early on, its acquisitions often have limited cash flow and a heavily leveraged balance sheet.

      “On the outside, everyone thought it was over for us,” Joe recalls of 2008. “They were just waiting for the death certificate.”

      It wasn’t forthcoming. In fact, even though the HDS story is about getting whacked at the far reaches of in extremis, the company’s response provides a great example of our first four pieces of advice in action.

      Own Your Whack

      If you’ve ever been in an organization that’s taken a hit, you know all the behaviors that immediately start to set in. People huddling behind closed doors, whispering about “who’s going to go,” managers scuttling between meetings with piles of binders and worried looks, not making eye contact with anyone, and general fear-and-loathing in the lunchroom. There’s such internal paralysis that the main work going on, basically, is people gossiping and sending out resumes.

      This kind of response to trouble is natural, because self-preservation is natural. But it’s also a self-fulfilling prophecy. Distracted, frightened, depressed people can’t fix anything.

      HDS put a kibosh on this dynamic. There was no denial, and just as important, no blaming or victimhood-claiming. Comments like, “Finance should have seen this coming,” and “I can’t believe this happened to us; we don’t deserve it,” were verboten. What good were they? Instead, HDS leaders adopted a massive “we’re going to beat this” mentality, and rewarded those doing the same.

      Such a mindset was achieved first by a constant invoking of the company’s mission and behaviors. “We had to set fourteen thousand people all going in the exact same direction,” Joe says. “Our mission was eight words: ‘One team driving customer success and value creation.’ We said it again and again.” At the same time, the organization’s behaviors were communicated through the acronym SPIRIT—service, performance, integrity, respect, innovation, and teamwork—and reinforced with small, spontaneous cash awards for the people demonstrating them. Importantly, such battlefield commissions, so to speak, were openly celebrated.

      There’s also a bit of theater to owning your whack. Take your pick at the best approach to reignite the organization—an off-site teambuilding event, an inspiring speaker—the options can get as creative as you want. At HDS, Joe chose to assign a special SWAT team to study the special attributes shared by the most famous champions in history—George Washington, Muhammad Ali, Secretariat, among others. Their findings—insanely hard work, a defeat-is-impossible attitude, and passion to be the best of the best—were touted and invoked in company meetings for two years. “We talked about the championship project findings a lot,” Joe says. “Secretariat won by thirty-one lengths. We used that example all the time to reset how people were thinking. We wanted everyone asking, ‘Is hiring that person going to help us win by thirty-one lengths? Is going to that conference going to help us win by thirty-one lengths?’ ”

      The champion project, Joe says, “really helped stopship the pity party. It celebrated how we were going to get better, and that started with a very purifying thought. Losing was not an option.”

      Hang On Tight to Your Best

      Far too often, when a company gets in trouble, its leadership has the knee-jerk reaction of firing people without consideration of performance. Many times this kind of willy-nilly approach happens because the company doesn’t have a performance appraisal system in place, and wanting to show the board how fast they’re acting and how deeply they’re cutting, the leadership team takes the easy way out and tells every manager to fire 10 percent of their staff, or lower salaries by 10 percent across the board. Similarly, they offer buyout packages to anyone who will take them, and of course, too often, the highest-paid, most qualified people tend to snap them up and leave, as they get the best terms and have the best opportunities elsewhere.

      Not to put too fine a point on it, but this behavior is the epitome of weak, cowardly, demoralizing management. Why on earth would you want to incentivize your best out the door and risk setting off a mass talent exodus?

      Getting out of a hole is hard enough. But you are never, ever going to get out of a hole without your best people. That’s why in hard times, you must do something counterintuitive and even courageous, which is give your best people more in current pay and long-term, performance-based equity, going so far as to err on the side of too many participants rather than too few.

      We say courageous because, in the darkest days, bringing such an idea to your boss, or in some cases the board, can feel like walking into moving helicopter blades. Your boss is often paralyzed and the board is worried about proxy optics. It takes guts to say, “Let’s compare our proxy noise embarrassment about pay with the pain of bankruptcy headlines, shall we?”

      But guts are required. Indeed, more than guts. If there was ever a time to unleash the generosity gene we talked about in the last chapter, it is now. In hard times, your best people become your best role models. “If Sam and Sarah are staying,” other employees think, “things can’t be that bad and they’re definitely going to get better. I’m in.”

      Or put another way: your best people are your best hope for survival—and success. Do what it takes not to lose them.

      Get Maniacal About the Drivers of Performance

      With the right people on board, you can turn to the next part of fixing your whack. That is, meticulously searching for ways to improve every part of the business.

      Meticulously? Hello, that does not mean slow. It means intelligently and deliberately, and in particular, it means driven by the vast stores of information about markets and consumers now available for free or for a price. Some people refer to this new ocean of facts and figures as big data, and we suppose that’s fine (if a bit jargony). For us, the imperative around big data is not necessarily getting more information; you could drown in it all. The main issue is discerning what information matters to your organization and crunching it to determine the true drivers of cost and growth. Ultimately, it is as Sir Terry Leahy, the former CEO of Tesco, has so famously (and wisely) said: the only data that matters is the data that is actionable.

      It was just such analysis that allowed HDS to quickly decide which businesses to divest because they had no clear path to a leadership market position. “The diagnostics allowed us to see what we needed to see,” Joe says. “We looked at every external market. Is there a way for us to make money there? What are the customer needs, which of them is most important, and how do we compare to our competition?” Similarly, the data pinpointed the best opportunities for investment.

      As a result, HDS sold off lumber, plumbing, and industrial piping, redoubling its focus on facilities maintenance and upping its technology investment to improve its delivery logistics. At the same time, again using a heavy dose of data analytics as a tool, the company launched a program to reward and spread process improvement. Its Los Angeles operation, for instance, was scoring much better results than other HDS outposts on numerous measurements. A headquarters team was assigned to find СКАЧАТЬ