Tim Clarke: I’m Tim Clarke and I’m president of Emirates Airline.
Question: What does it take to be an effective leader in business today?
Tim Clarke: Being in the right place at the right time gives the opportunity for an effective leader. And I think history will record that whether that’s a business leader, a political leader, a military leader, being in the right place [and so] my luck comes in to that.
But putting that aside, for me, the leader needs to be not only a strategist, the leader needs to be the person who envisions the vision and then assembles the resources required to execute an implement of that vision. You could call that a business model because it transposes from the vision to the model.
And at that point, the leader will bring everything that the business model needs into play and retain the focus on that to see that the job is done to the goals that have been set by the model, which may have come from him in the first place or her. The need for a merciless focus on the execution of the model through the very difficult changing dynamic trading conditions in a particular geographical area, possibly, or within the corporate area of a particular company’s activities is absolutely essential. And be able to take the helicopter view and not allow yourself to become compartmentalize in your thinking is absolutely essential.
So the iterative nature of the way the businesses are run, the cause and effect of one division or [00:03:38] one another, one does and have that effect to others is absolutely essential. To be able to stand back or [go back] and make sure that everything and every resource used in the business model and the execution of that vision is assembled and working at the same pace at the same time.
Question: How does a business leader need to change their vision for the company in this economic environment?
Tim Clarke: There is no point persisting with a vision or a business model which is either out of line with the way the trading environment has altered and not making the adjustments. Now, it’s very difficult for an airline, in this particular case, Emirates, that has been going ahead of the pace of a juggernaut to, now, slow down to change its ways, to adjust to what is a… an alarming fall off in demand.
Now, the leader has basically got to accept the realities of this particular change. And at this particular change, we have a fundamental staggering change. And it’s not easy for the people who have lead through growth, through success, through, in our case, network expansion to the extent that we have, to now say, right, we have to put things on hold, worse case downsize, etcetera. But the leader is expected to do that.
The tens of thousands of people who have been with you and shared in the profitability, the success of the organization will now look to the leader of that particular entity to see through the rough times. They will look for the decisions. They will look for the right decisions. They will look for any decisions. One thing you can’t do to your employee base is say I don’t know or I have no decision. You must make decisions.
Question: Where’s the business opportunity in a down market?
Tim Clarke: The businesses that are quick of their feet will seize any opportunity that a downturn or whatever offers. And it doesn’t mean to say that you have to be predatorial [sic] with regard to market share. Because if you take somebody else’s market, then… and you… you grow and you will do that person damage. That is competition but it’s not necessarily the way you’d use the opportunity.
The opportunities come through your [cost] space, goes down significantly. Already, we are seeing up to 20% reduction in cost in our supply chain coming through. We see labor; the factors of production that are so important to what we do are coming in a lot cheaper.
We can, therefore, look at, would you believe, new roots under this kind of regime rather a contraction. As my group, the planning group, is doing as we speak. We’re looking at opportunities in areas that we had in the planning frame overtime. And now, being advance to see what is the viability of redeploying the assets that we have into new roots, which could give us a better return for incidents than we might have with existing resource.
So it is not just a question of downsizing and hoping for the best.
Question: What is a common mistake people make when trying to grown their business?
Tim Clarke: Not following their instinct, departing from the fundamentals of the business model for reasons of pressures that they should’ve been able to deal with, allowing that as result of that, the business to go off-course, allowing barnacles to appear below the water line, that slow the ship down and to pull it off-course, and not seeing those, not being able to deal with those.
Question: Do you think it’s a good time to be an entrepreneur?
Tim Clarke: Frankly, I think now, or within the next 9 months, the opportunities for the brave entrepreneur will never ever be as good in their lifetime. Now is the time, in many aspects, to take the plunge and do all the things that you wanted to do, whatever they may be because it’s ready.
The world is in deep trauma, deep shock and therein lies the opportunity for the entrepreneur. Commodities, assets are falling by the minute, the values are falling. The value of those, by the way, in true measurement, is as good as they ever were.
And therein lies the opportunity.
Recorded on: Feb 25, 2009.