Last night I took part in a TV talkshow (Club 2, ORF, Austria) on the topic of President Obama´s economic policy and its effect on the world economy. The discussion made it clear to me, how little the new US administration is prepared to really solve the economic crisis; this, despite the massive $825 billion stimulus package.
The start of Obama´s administration seems to be driven by three types of factors:
1. Strong leadership and optimism: Yes, we can!
Obama´s leadership and strong performance as communicator created massive expectations and high hopes for the renewal of American values at home and abroad. Although the expectaions are extremely over-hyped, strong belief in his leadership is an absolute plus.
2. Hard, cold interests
Obama is not an island by himself. There are real pressures to deliver on the expectations and to answer these interests. Call them pork barrel, special interests or any other name. He needs to work with these groups that demand their share for support; nationally (unions, states, military, energy, Wall Street, Big 3, etc.) as well as internationally.
Even in case he would have the best laid plans, to implement these in the real world is an entirely different challenge. It seems he is building a team that balances competence with affiliation in order to deliver on this "realpolitik".
3. Wrong-headed economic policy
The economic issue is the most important and the "make-or-break" topic for Obama´s performance as a president now. But, as far as we can read the administrations´economic plans and intentions, these by far do not measure up to the challenge lying in front of the US, and the whole world, in fact.
The key problem of the current economic crisis is the credit crunch. The articulated measures so far are based on Keynesian-inspired demand stimulation, which is the wrong strategy. It will lead to hyperinflation, but will not accelerate the urgently needed build-down of toxic waste credit in the financial system.
What does it mean for managers and entrepreneurs? How to address the economic crisis?
We need not despair, however, not yet. Obama seems to be a smart individual who is capable of working with the best and to change his approach in order to learn what works. Also, we as managers and entrepreneurs can and should pro-actively address the economic crisis:
Individually, managers can implement three measures:
First, we can take a leaf out of Obama´s book and provide leadership in difficult times, believing in better solutions and communicating clearly to generate rational optimism.
Second, managers should go back to a proven success formula and focus on customer value in everything the organization does. Everyone should think from the point of view of the customer and ask oneselves: "Would I really buy that now?"
Clearly, necessity is the mother of invention. Managers´ task consists of supporting the never ending pursuit to providing ever higher value and additional benefits at lower cost to customers - now. Then, customers will keep buying even in recession and bad times.
Third, managers need to prove their mettle - especially in these trying times . There will be difficult situations where a shortcut seems the easier way out. It can concern downsizing, cutting salaries or asking individuals to work better, smarter and harder.
Because, to lead an organization requires to stand up for one´s values and to give the respect to every employee, customer and other stakeholder. The human values are the foundation of every success and need to be preserved right now, when they count most.