Tells A Packed Lunch Crowd in Downtown Kansas City Great Leaders Navigate Crisis Everyday If You Can Turn A Company Around Why Not A Whole Country?
Forbes leads in with a colorful analogy of Hannibal, the military commander and tactician who marched an army from Iberia over the Pyrenees and over the Alps into nothern Italy on the backs of with war elephants.
He acknloledges that Hannibal was an innovative leader who had the vision to accomplish what most would call a suicide mission. But what he failed to see is that he paved the way for imitators who would ultimately use his own strategy and tactics against him.
By maintaining the status quo and sitting on his laurels, happily ruling Italy for fifteeen years, he lost his competitive edge. In a nutshell, he’s saying that the world never stands still. Natural human instinct rules the day.
Leadership was and always will be the key to solving big challenges.
Great leaders set the vision and strategy, then must inspire and enage their employees to innovate, think creatively and solve problems. Crisis, in effect, simply follows the law of unintended consequences, so rather than an event it becomes a part of our routine.
Shifting gears to the heyday of General Motors, William Crapo "Billy" Durant was a leading pioneer of the automobile industry, the founder of General Motors and Chevrolet and realized that he could outmaneuver Ford by offering multiple models to suit different budgets and lifestyles.
Given the choice of Ford, “you can have a Model T in any color you want as long as it’s black,” or a broad range of models and styles General Motors filled a huge untapped need and reinvented an industry.
Durant didn’t lock horns with a deeply entrenched competitor, instead he flanked to a broader market, creating his own rules, providing the consumer with color choices, a model for every pocketbook, customization choices and a shifting the focus away from the manufacturer to the consumer.
Forbes said Durant’s vision was that he saw beyond the nuts and bolts and basic utlity of a car. He realized that our cars are an expression of ourselves, an extension of our personalities and a “fashion statement.” That’s why Durant pioneered the concept of annual model changes, shiny new toys, high tech gadgets, the next big thing.
Then he made the product more accessible by allowing cash strapped consumers to buy on credit. In so doing, he throughly disrupted the “cash upfront” industry standard. That kind of financing had never been previously available for a depreciating asset. But Durant made a calulated bet that market share and volume would outweigh the liabilities. And he won.
In three short years, General Motors dethroned Ford as the number one automobile company. Ford was risk adverse, preferring to wait on the sidelines and see what would happen. By the time the model was proven, they were a day late and a dollar short. Durant transformed General Motors from a distant second to Ford (which commanded fifty to sixty percent of the market at that time) to number one. To this day, even with all its problems, it's still a world leader, says Forbes.
His last case study is about Bank of Italy. Forbes explains that the bank was started by serving the rapidly growing population of immigrants and merchant seaman who previously had nowhere to turn but loan sharks.
It was thriving when the notorious San Francisco earthquake of 1906 struck and the resulting fire is remembered as one of the worst natural disasters in the history of the United States. But here’s the kicker.
Management had the foresight to anticipate the fires after the earthquake hit. They loaded cash onto covered wagons, hid it under fruit to prevent theft and bolted the city. When the fire stopped, the proud bankers marched back to their charred bank and told merchants and consumers come on in, we’re open for business.
That forethought, seeing around corners, is was made Bank of Italy the only game in town after the crisis. During the depression, that same bank used every ounce of political clout to keep the bank open. Crisis is a daily ritual in business, the management of it is a difficult displine to master.
But thanks to tenacity, deterimination and strong leadership they once again steered the ship through stormy waters. Forbes said it’s not the crisis that’s important. What matters is how executives, managers, professionals, business owners and heads of household respond to it. “It is in crisis that we find opportunity,” says Forbes.
He has now layed the framework for his vision on how to revitalize America with great leadership.
More leadership thoughts on the economy, taxes, healthcare and social security in our exclusive series with Steve Forbes, keynote speaker News Radio 980 KMBZ Business Forum in future articles
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