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Keeping their Heads

The financial meltdown of 2008 was the biggest test of the capitalist system since the Great Depression. But it taught us that when the going gets tough, the tough get creative

Decision making is, in the best of times, the hallmark of an effective leader. In the worst, as we have recently experienced during the credit crisis, decision making is perhaps less a matter of intellectual conviction than naked courage – whether sticking to tried and tested principles or innovating in the face of a financial tsunami. The ultimate concern of all is how do leaders keep their businesses from circling the drain?

The ongoing global financial crisis has brought several changes to the mechanisms of the business world. The need for creative solutions to a global dilemma is intensifying as companies strive to stay afloat. “It’s times like these when innovation is not only an option, but rather a requirement,” Jordanian entrepreneur Mohammad Najjar states.
“The crisis has paved the way for creative solutions. Personally, it has awakened parts of my brain I never knew existed. I have used it as a learning experience, for my team and myself; like a crash course in change management. I believe successful people are those who acquire the highest ability to adapt to change, making them change managers.”
Diverse case studies show that companies who were able to adjust to change, and think and act differently in times of crisis were actually able to increase their market share and empower their brand loyalty. Aramex, for example, was able to avoid the worst elements of the crisis due to its innovative asset-light business model, with low fixed costs compared to other logistics providers and the ability to respond more rapidly to new opportunities. Other companies reinvented their products completely. Domino's pizza chain created all-honesty advertising campaign that confessed to the less-than-perfect nature of its product and service in the past. “The pizza giant confronted consumers’ complaints about its staple product by rolling out a new recipe, and it got a sales lift as a result. Domino's was brilliantly tapping into the current ‘reality-truth craze’,” says Reid Holmes, creative director at Campbell Mithun. For a company whose price point was already a winner in a slackening economy, the campaign was able to readdress negative perceptions and maximize their competitive advantages.
Toyota dealt successfully with a different kind of self-created crisis – just as their sales were set to boom. The Japanese carmaker was in the headlines for much of 2010, when their US were rivals had succumbed to government buyouts amid tumbling sales, because of a faulty accelerator pedal on several models. They were forced to recall hundreds of thousands of cars to fix the problem, and then pursue an aggressive PR campaign to counter the mountains of negative publicity. A large part of this was an unprecedented social media effort, engaging customers directly. CEO of Toyota USA, Jim Lentz, embarked on a live question-and-answer session on Digg.
On the more responsive Twitter, they created the Toyota Conversations site to reflect and then respond to all the Tweets about the recall as well as breaking news about senior managers’ testimony before Congress. Although the recall can hardly be described as positive for the company, their swift, innovative response helped turn the tide of public opinion back in its favor.

Small is beautiful
At the other end of the commercial spectrum, entrepreneurship – flexible, responsive and innovative – is seen as the real driver of change in the post-crisis economy. Corrine Beaumont is an instructor in the Creative Economy at Kingston University, London, a course that requires students to create their own companies in a practical learning environment, urges students to defy the norm and develop a sense of “design thinking”. “Creativity doesn’t need to be something extraordinary,” she says. “It can be as simple as going out and talking to people. Just talk to your consumers. Ask them what they would like; ask for their feedback, you’ll be surprised as to how helpful that can be.” Claiming to be design thinking’s biggest advocate, Ideo CEO Tim Brown wrote a book entitled Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation. He was asked whether it is hard to promote innovation in a bad economy: “You certainly get companies changing their objectives in a downturn; they tend to be a little less long-term. But design thinking can be applied in short-term ways and in long-term ways. In fact, the imperative for doing this is even greater in a downturn. The opportunity to capture more market share is greater because many of your competitors have taken their eye off the ball.”

The crisis has forced business leaders to face facts; avoidance was no longer an option. “The way I see it, it is all about being innovative with your budget,” says Hasan Toubal, owner of Signarama, Montreal.

“My advice to any struggling business owner is to find more creative ways to generate business and create awareness of your brand. I cut back on billboard and print advertising and instead focused on social media, research and development. Things in turn have definitely started to pick up in 2011.”
Naturally, creativity cannot be pinpointed, measured, or even defined. The aspects to which it can contribute are endless. It is whether a business leader can grasp it and create solutions out of it or not. Corinne Beaumont states that corporate storytelling and narration in organizational structures are part of the innovative process. “Organizational decisions are stories. They refer to the representation and interpretation of life in organizations as configured within a decision-making sub-genre. This sub-genre, in turn, is an institution that functions as a ‘horizon’ of expectations for readers and as a ‘model of writing’ for authors.” The important thing is to find your personalized story to tell, in whichever way reflects your brand.
Conclusion? The economic crisis is inducing creative solutions. Yes, things are not as good as they were five years ago. Yes, we are amidst a very deep financial crisis. However, all clichés aside, it is really what you make of it, and what you take from it.

 
  Copyright 2011, Aramex International