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| Jerry Chenkin is president and CEO of Honda Canada Inc. (Deborah Baic/The Globe and Mail) |
Good companies share some common practices. They focus on strengthening leadership, they develop plans for what to do when things go wrong and they prepare as much as they possibly can.
But what about when everything goes wrong all at once? When your entire business, from top to bottom, is thrown into chaos in a matter of hours because of circumstances that you could not possibly have ever imaged?
On March 11, 2011, I was getting on a plane with a group of Canadian Acura dealers to attend a meeting in Thailand. As we sat in the airport lounge, news broke of an earthquake in Japan. Of course we and our dealers were very worried about the impact of the earthquake would have on the people of Japan, and naturally the conversation turned to the possible impact on our business.
Since more than 90 per cent of the Honda and Acura vehicles we sell in Canada are manufactured in North America, I told them that while we could certainly feel some impact, it should not be too severe.
Shortly after we landed in Hong Kong, the first stop on our journey, I heard about the devastating tsunami that had followed the earthquake.
Then, over the next few days I came to realize the severity of the disaster on our business.
We all know now how devastating the earthquake and ensuing tsunami were. Four damaged nuclear reactors, 500 square kilometers submerged, more than 13,000 dead and hundreds of billions of dollars of damage only begins to describe the massive impact of this natural disaster. Many of the Japanese auto manufacturers were affected, but none as severely as Honda.
In the hours and days that followed, we realized that the effect on our Canadian business would be prolonged and, most frustrating to us as business leaders, totally beyond our control. What we came to understand during these early days was that while “just-in-time, single-source supplier” supply chains offer huge advantages when things go smoothly, there are huge risks when unexpected disasters happen.
What does it take to shut down a business?
In reality, not much. Imagine this: A sub-contractor of a sub-contractor makes a part, that part is then sent to another sub-contractor, who then combines multiple parts into an assembly destined for a Honda factory. The whole assembly eventually finds its way, just in time, to an assembly line in North America where it becomes part of a Honda vehicle moving down the line.
Well after March 12, that sub-contractor and many others weren’t only unable to deliver parts, since they had been washed from the face of the earth. The ultra-efficient, highly respected manufacturing practices that we employed were just derailed.
I remember a number of things from that time. I remember feeling so upset for the people in Japan who were suffering so much.
And the feeling of frustration that even with daily global video conferences at crazy times of the night, we simply didn’t have up-to-date information for our dealers and our customers.
Since there was no playbook or plan to follow, all we could do was gather a team of our best people and figure out how to get through this unbelievably tough situation. Here are some of the lessons I learned:
1. Show your face.
It can be difficult to stand in front of employees and customers when you don’t have answers and can’t offer much in the way of reassurance. But leaders must do it anyway. Make yourself available, as soon as possible. Just being there can be reassuring. In times of crisis it is important to realize that everything you do sends a message. This extends right down to things like your body language and tone of voice.
2. Over communicate.
In the normal course of business, we often worry about information overload and inundating our customers and stakeholders with information and turning them off. Even saying you don’t have answers is better than saying nothing at all. Also, realize that repetition is your friend. Information rarely reaches everyone you intend in one telling. So say it again, and again.
3. Trust your team.
When you’re in uncharted waters, where there is no playbook on how to respond, don’t retrench. Instead, open things up and trust your team. They are as invested in your business as you are and getting through the crisis will require the total commitment of everyone at every level. It can be hard to let go when everything already seems out of control, but pulling back won’t help.
Beyond all of these strategies, perhaps the most important lesson I learned is to never lose sight of what’s most important. I lost a lot of sleep in the aftermath of the earthquake and tsunami. So did our associates and our dealers. And we all sweated the massive impact to our business.
But none of that matters much when compared to the devastation to the lives, environment and economy of Japan. Too often when things go wrong, we immediately focus on what it means for me. I think we all do that. I’m probably guilty of it too. But three years later our Canadian business has responded very well, but much devastation remains in Japan and will for decades. I’ll never lose sight of that.
Jerry Chenkin is president and CEO of Honda Canada Inc. (@HondaCanada).
Source;
http://www.theglobeandmail.com/report-on-business/careers/leadership-lab/honda-canada-ceo-how-to-lead-when-absolutely-everything-goes-wrong/article20618136/
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