A Time for Leadership

Anyone who’s been in business for more than a few years has had to face the inevitable ups and downs of market and economic cycles.  In my nearly 25 years in business - most of them in high tech - I’ve seen a few, including the bursting of the Internet bubble in 2000.   But those events pale in comparison to the challenges we face today - challenges that put a real premium on leadership and management.

The biggest risk for any company and any management team is getting distracted by forces they can’t control.  This is particularly true in what amounts to the first severe, worldwide recession of the globalization era.  Market volatility, the collapse of financial institutions and sharp declines in business and consumer demand can nearly paralyze decision-makers at a time when clear-eyed leadership is more important than ever. The key is for managers to focus their teams and organizations on the issues they can control.

At Travelport, for example, we can’t control the decline in GDS segments or softness in group travel, but we can control how we respond to these events.  Like most other companies, we’re reassessing our budgets and expenses in light of this new business reality.  At the same time, we’re working even more closely with suppliers and agency partners to make sure we’re efficiently meeting the needs of the hundreds of millions of people who are still traveling for business and leisure worldwide.

Another risk in turbulent times is losing focus on the future. Severe economic downturns lead many companies to focus their management energies on short-term challenges.  That’s to be expected, to some extent.  But downturns also create opportunities for companies with the leadership and discipline to manage both increased efficiency and targeted investments in growth.  This is why strong companies often get stronger during recessions.  They know how to make savvy choices, how to take share from weaker competitors and how to manage their business for the short-term and the long-term.   When the economy rebounds, they’re in even better shape than they were before.

Downturns are also an opportunity to strengthen your team - to improve skills and create new opportunities for talented people who want to stay with the company.  I once read an interview with the founders of HP in which they said the No. 1 reason for their success after World War II was their ability to upgrade staff in 1946 while everyone else was winding down from the war effort.  Human capital deserves just as much attention as financial capital.

At the same time, employees need visible leaders who are leading from the front, not the bunker.  You can’t over-communicate in bad times because the hunger for information is almost insatiable.  Employees need to know that their managers are acting in a thoughtful and prudent way and that their decisions are pragmatic and intelligent.  They want honest communications, not sugar-coating.

More than anything else, this is the time for disciplined thinking and action.  The best companies analyze opportunities in bad times the same way they do in good times - taking the long view and staying committed to doing things the right way.  Companies that panic and throw away their playbook often find themselves in trouble.

There’s no pain-free path through a global recession, certainly not one on this scale.  But companies with the right combination of discipline and vision will be able to look back on these times as an opportunity taken, not lost.

Jeff Clarke

Jeff Clarke is Chief Executive Officer and President of Travelport and serves as a Director on the Travelport Board of Directors, appointed in May 2006. He also serves as Chairman of the Board of Directors of Orbitz Worldwide.

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