Big Think Interview with Mark Foster
Question: What are the questions at the forefront of businesses right now?
Mark Foster: I think that our clients at the moment are trying to balance a number of conflicting contexts. First of all, they still have in the back of their mind what the world was like before the downturn and some of the global competitive pressures that were out there in terms of new markets, changing competitors, having the right competitive cost structure for a global economy.
Then of course there's the pressures of the downturn which many clients are still working their way through in terms of how they're getting the basics right in their business, manage their costs, look after their customers, and have the control over the basic business. But they're beginning to turn their minds to a third context which is the world in front of us over the next 24 months where there clearly are going to be opportunities for growth. It's going to be a constrained world still. So you have to make choices in that world and having to think about that and then beyond then as they're beginning to see the challenges of the next decade where we see major industry restructuring, the role of technology changing business again, and have to keep that context in mind as well.
So clients are balancing their way between the short, the medium, and the long term and beginning to have to make some real choices.
Question: How important is cost cutting in a time like now?
Mark Foster: Cost cutting has clearly been one of the critical agendas for clients, particularly in the downturn. Clearly they've been trying to do that cost cutting in a smart way because it's very easy to go off to the lower hanging fruit, which is obviously an opportunity in these times. It's also very easy to leverage these kinds of opportunities to frankly go off to costs and sacred cows in your organization because of the nature of the context. But in the end, the really important thing is to understand your cost structure in a strategic way, to understand how does your cost structure stack up against your competitors now and in the future. How do you look at each of the critical processes in your business and make sure that cost is now the right cost to deliver on the outcome you want from that process.
So wherever I much focus on helping our clients think about how they do cost cutting in a smart way, that delivers on their immediate requirements, but is also enabling that business for the future as well.
Question: How does innovation come into play during a downturn?
Mark Foster: In my conversations with my clients it's very clear that the theme of growth and innovation is coming back on the table. Initially, clients are focusing a lot of that innovation thinking still around probably innovating to support their cost management agenda and less about innovating in the area of products and services, but it's clear also that area of more broad based business innovation and growth is coming back to the top of their minds again. They are having to think about how they're going to compete. They can see that markets are beginning to move and unfreeze and how important it’s going to be that they're differentiation returns as part of their business strategy.
So I think we are seeing a return to innovation shifting from cost management and beginning to think about new products and services. In the end, innovation will be one of the drivers of strategic success in the period ahead.
Question: What is the role of globalization in the downturn?
Mark Foster: The pace of globalization remains I think a real focal point for leadership. It's clear that the shifts that we saw in the past around where new consumer markets are appearing, where the talent is burgeoning around the world, the haves and the have-nots of resources, where the new capital sources and innovation is going to come from in the world. All that world is still shifting and we are seeing the emergents of new centers of gravity of economic activity around the world.
It's vitally important that leaders of organizations are making sure that their organization is looking out scanning that world and beginning to make the right strategic choices and setting the right strategic options against the opportunity set and the threats that are out in a wider global economy.
Then of course there are lots of challenges around how you then respond to that by making sure that you're able to make your organization authentically local enough in the way that it goes after those marketplace opportunities and also have a global mindset that's able to have a wider sense of how you manage and glue together a large global organization to take advantage of scale. So the whole super local, super global trend is really important right now.
Question: What are the major challenges leaders in business face while attempting to balance between today and tomorrow?
Mark Foster: Leadership has been tremendously important during this current period. Having the right kind of style of leadership that can balance the necessary tough messages of a difficult time with enough of a sense of the tomorrow has been one of the real challenges for leaders over this past period. Now, as the mood changes, and the needs to get on the front foot and think about growth returns, its also important for leaders to get that balance right because people cannot be too overly optimistic. At the same time, people who do are looking for people to paint a very clear picture about the medium to long term vision for their organizations and to start to see the choices that are being made, the strategic investments that are being placed are against some kind of a sense of a longer term picture.
So leaders have a real imperative right now to keep the balancing act to be between the foot in today and the foot in tomorrow. They need to be also spending a lot of time with their people, with their organization really bringing the top team along with them but also communicating often and frequently down through the organization, both around tough actions are still being taken now but also importantly beginning to paint that very clear picture about where organizations need to go in the future.
Question: How should leaders keep staff motivated?
Mark Foster: Managing talent is a durable theme for all organizations. Clearly, most companies have gone through a very tough time in terms of the actions they've had to take, whether it's been in terms of workforce action, whether it's been in terms of payroll actions, or indeed compensation and promotion actions. Many organizations have been through a period of time when the signals they can send to their workforces have been tough. I think the critical thing has been about the way that people have handled that in terms of the integrity and the honesty and the clarity of the communication that's associated itself with necessary actions.
Now we need to start to see the dial turning again as people have to start to think about how do I now put back some of the things that may be I've not been able to afford to do over the past period. How do I start to paint a picture of where the organization is going and start to send signals through my actions that this is a good place to work and there's an opportunity for people to really, again, set themselves up for the next stage of their career in organizations.
I think it's also important for leaders to be looking to make sure they're accessing new pools of talent that are out there. We're about to engage, I'm sure, in the next wave of the war for talent. That's going to mean that organizations are going to have to be very, very sharp around how they keep their current people motivated but also most importantly how they tap into new sources of talent globally around the world to enable their business plans.
Question: How does a leader respond to demands for sustainability given the current market conditions?
Mark Foster: Well clearly sustainability as a topic was very top of mind going into the downturn and it was also clear that frankly in terms of many company's corporate priorities during that period. It was quite hard to maintain a focus on that.
Having said that, good organizations did link things like their cost management approaches with green approaches; they tried to be lean and green. They tried to think about how they could combine opportunities for cost takeout with a broader business intent around how they provide sustainable business. I think going forward we're going to see a very increased focus on sustainability, in its broadest sense. Everything from yes how do I have an organization that is actually operating in a green way, how do I respond to carbon trading, carbon regulations in my own organization, what that means to my supply chain for my IT and my buildings, et cetera. But we're also going to see, I think, a broader issue around sustainability which is about how do I build back business trust because we're clearly seeing a world while during this past downturn, trust in organizations and in business in particular has been eroded and it's going to be really important for companies, for brands, to be thinking about what am I doing to really build back trust in my organization and that's part of doing that in the light of creating a sustainable business that's got long-term position with a multiple stakeholders it has to deal with in the community.
Recorded on November 13, 2009
A conversation with the Group Chief Executive of Global Markets and Management Consulting at Accenture.
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