Apart from those businesses that will land the plum infrastructure construction jobs under the second economic stimulus package that seems to be taking forever to be announced (now it's March 10), the rest of Malaysian businesses must make some crucial decisions. The stimulus package is not the Panadol or Aspirin that will cure financial and business headaches.
It is still left to businesses to decide whether to innovate. It is still left to the towkays to decide their risk appetite. All these will still be present even after the stimulus package is announced.
Here are some pertinent points:
The challenge to innovate
Businesses tend to produce much more rhetoric about innovation than innovation itself. Why? We all agree innovation is a good and necessary thing, so why don't we do more of it?
One important reason is that innovation is a collective activity. It depends on how the people around us define bold and acceptable as opposed to reckless and stupid.
It takes very unusual independence to ignore the prevailing view.
Times of crisis make such challenges especially difficult. Even though we understand perfectly well that we need to be nimble, fear can lead us to suicidal levels of risk aversion and inflexibility. That's dangerous, but it's also understandable. The status quo can be very seductive when the marketplace is in chaos.
Encouraging calculated risk-taking
As the management authority E. H. Schein puts it, leaders communicate their priorities through what they choose to measure, comment on, praise and criticize. This is crucial, for employees tend to focus on what they know to be the senior team's priorities. And if it's true that a clearly understood culture directs employees and imbues them with confidence, it is truer still in a crisis, when expediency can play havoc with corporate visions and values.
How can we instill a culture that makes everyone wisely embrace risk and figure out new ways to build revenues?
Here are three suggestions:
(1) Ensure employees see unanimity across the senior team about the firm's priorities.
(2) Encourage mistakes. "If you fail, try again. Fail again. Fail better," said the playwright Samuel Beckett (we can learn a lot from the creative process).
(3) Make teamwork and collaboration desirable. Complex problems require collaborative solutions. Where leaders fail to persuade their people to collaborate, ambiguity and competitiveness rush to fill the vacuum.
Microfinance: Mohammad Yunus and Grameen Bank
In 1976 a young academic named Mohammad Yunus lent $27 to 42 businesswomen in a Bangladeshi village. They had good ideas, but banks considered them too risky to lend even small amounts to.
Yunus wanted to help them avoid the moneylenders whose rates were eating up their profits. His tiny initiative grew until it became Grameen Bank, which has now lent $5 billion to 5 million people.
Some 70% of Grameen's borrowers also save there. It makes profits and pays dividends. And its credit rating is the envy of many First World banks. In 2006 Professor Yunus and the bank jointly earned the Nobel Peace Prize for economic and social development.
Opportunities are there, if we dare to see it
Nobody dares trivialize the present financial crisis, which daily claims more victims. But we can still choose whether or not to see opportunity.
A big first step is to look at how we see risk and to foster an organizational culture in which both the bosses and employees look at risk honestly and take it when it makes sense.
(This post is loosely based on Kevin Kelly's piece in Forbes.