Read This 3: Thriving in chaos: how to come out stronger on the other side of this global crises
The last edition of Read This was all about leaders who did well through major crises -- civil wars, economic recessions, being stranded on Antarctica. Not your every day leadership issues.
We're certainly going through crazy times right now, what with the global pandemic and economic recession (in case you forgot). But it’s important to remember that black swan events happen pretty frequently and, while each individual event is different, the effects are often similar.
Thriving in Chaos
The following books are about companies that went through some unexpected, industry-changing event. Most of their competitors struggled or outright flopped. These companies not only survived, but thrived in spite of (and in some cases because of) whatever crazy event happened in their industry.
Nuts! Southwest Airlines' Crazy Recipe for Business and Personal Success
Southwest Airlines is a fantastic company to study because they have thrived and grown through some incredibly difficult industry changes, all while being one of the happiest places to work. Southwest turned a profit every year from 1972 to 2002. A 30 year period of time that included massive fuel shocks, industry deregulation, massive labor strikes and an air-traffic controller strike, and multiple recessions.
The worst industry shock came on September 11, 2001. In the wake of the terrorist attack, every other airline laid off or furloughed staff and cancelled flight routes. Other airlines didn't have a profitable quarter until 2003. Southwest didn't lay off or furlough a single employee, they didn't cancel a single flight route, and they recorded a profit throughout 2002. They even recorded a profit in Q4 of 2001, despite the terrorist attack on September 11 and the national air travel ban that followed.
What made Southwest different from their competitors? The company demanded of itself that it make a profit every year regardless of what was happening in the economy or industry and while keeping costs low for customers and spirits high for employees.
Plain Talk: Lessons from a Business Maverick
When Ken Iverson became CEO of Nucor, the company was on the brink of bankruptcy. He got the position by default because no one else wanted it. Who would when the company was unprofitable and in a bind. Competition from subsidized Chinese steal was driving down prices at a time when costs were increasing. It looked like an impossible situation.
In his 30-year run as CEO, Iverson transformed Nucor from a small steel producer on the brink of failure to one of the most profitable and successful American companies of the century. And he did it by completely ignoring every rule they teach in business school. For instance, Iverson reduced the number of levels of management down to just four and aligned management and labor with the same incentives (when the company did well, both labor and management were rewarded).
So if you have an MBA, this book is going to make you scratch your head. A lot. But if you have an MBA and work in any of the industries that are being squeezed by the ongoing recession and pandemic (like the oil industry), it may just be the book you need right now.
Inside Intel: Andrew Grove and the Rise of the World's Most Powerful Chip Company
This book answers the question, "What do you do when your company's main line of business doesn't make sense any more?"
Intel was built on memory-chips, the "thinking" part of your computer that makes it possible to perform a task like running a web browser. During the recession of the early 1980s, Japanese competitors drove down prices on memory-chips by 80% in just two years, making the business untenable for Intel to continue. This happened in the middle of a recession.
So what do you do when someone or something comes along and makes your main line of business unsustainable? Look around and start a new one.
Intel transitioned into microprocessors (the "brain" of your computer) and not only surviving that period, but actually came out stronger and more successful on the other side.
Happy reading. Until next week,
Zakk