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Norm R. Augustine
Technology/Civic Leader

Norm R. Augustine

A former president of the Boy Scouts of America and chair of the American Red Cross, Norm Augustine is the retired Chairman and CEO of Lockheed Martin Corporation.

Brutal Realism, Honestly Explained

As this is being written Americans are losing their jobs at the virtually unprecedented rate of a half-million per month. The tragedy is that the overwhelming majority of these individuals are competent, loyal workers--their misfortune has little to do with their on-the-job performance.

Such was the case in the industry with which I am most familiar--the aerospace industry--at the end of the Cold War when some 40 percent of its employees and three-quarters of its companies disappeared in a half-dozen years. Sadly, under the analogous circumstances that exist today, companies have little choice but to downsize. It is a case of consolidate, liquidate...or evaporate.

Leadership in such times (incidentally, the worst experience of my 40-year career) requires not only decisiveness but also to the great extent possible, compassion--always trying to salvage whatever jobs and shareholder wealth can be preserved for the longer term. Simply stated, it is a case of limiting damage--embracing the least-worst alternative--much as a submarine commander preparing for combat orders the compartments of the vessel separately sealed in order to save the boat as a whole.

Many pertinent lessons have been learned the hard way under such circumstances. The first of these is that "Hope is Not a Strategy." One must be brutally realistic in assessing the prevailing circumstances and the future outlook. As Jack Welch likes to ask of potential leaders, "Can they see around corners?"

Next, and this is somewhat counterintuitive, once decisions are made they should be implemented quickly. One hears many arguments to the contrary: "We must introduce change slowly so people can become accustomed to the new regime way of doing things." Or, "We must not take actions that are too disruptive." But in nearly all instances the latter logic is dead wrong. It turns out that people can deal with bad news--what they can't stand is uncertainty.

It is also important to start any necessary employment reductions at the top of the organization, both as an example and to avoid bloated payrolls or an aged workforce with no replacements in sight. Foremost of all, a leader must be absolutely candid and straightforward in talking with the team...concealing bad news is a cancer on leadership credibility.

Oh, yes, it is also a good idea to cut out the parties at extravagant watering holes, bonuses for the boss, and golden parachutes for the failed. But that's obvious.

By Norm R. Augustine

 |  February 9, 2009; 12:18 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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