To start with, crisis is sometimes the only door to change. Philips Electronics learned this the hard way. A pioneering manufacturer for audio, video, and recording equipment, Philips was on top of the world in the early 1980s. Its reputation for engineering was unequalled, its competitors few. Based in the Netherlands, Philips had regional managers in numerous locations throughout Europe. Each region was independent of the others, and each regional manager ran his division like a small kingdom.
Over the years, Philips employees came to understand that the key to lifelong job security was loyalty to individual managers and that personal relationships and seniority mattered more than ability. According to Paul Strebel, who reported on Philips in the May—June 1996 Harvard Business Review, “Position and power in the company network determined who get what…Workers had no incentive to work harder than people just above them…Philips had no effective mechanism for holding managers responsible…In a culture that encouraged loyalty over performance, no one was able to challenge this mind-set effectively.”
By 1990, the mind-set badly needed to be challenged. The economic scene had shifted dramatically; now companies such as Sony and Panasonic were taking huge chunks of Philip’s market. Two successive CEOs had tried to make Philips more competitive, but nothing worked. “Managers and subordinates were not forced to understand how the changes essential to turning the company around would require them to take a fundamentally different view of their obligations.” In other words, the changes were unthinkable to Philip’s employees.
Then Jan Timmer was put in charge. The first thing he did was to officially label the situation a crisis. Timmer brought Philip’s top hundred managers to an off-site retreat and handed each a sheet of paper. It was a hypothetical press announcing Philip’s bankruptcy. Timmer stated in no uncertain terms that unless changes were made now, the press release would become reality. His managers had two choices: join him in his mission to entirely reshape the organization, or go elsewhere. “Operation Centurion had begun.” Writes Strebel, “and, with it, the end of life in the company as all those in the room had known it.”
Operation Centurion instigated sweeping reforms throughout Philips. The way Timmer launched the program offers a lesson for all managers—sometimes it does not pay to soften a situation; sometimes calling a crisis by its true name is the only way to get people moving. Once a crisis is recognized for what it is, a spirit of open-mindedness—sparked by the primal urge to survive—replaces the old assumptions. Most people can rise to the challenge. In 1994, a company survey revealed that among Philips employees, “morale and feelings of empowerment had soared.”
Rather than deny that a crisis exists, he recognized and used it. Serious crises visit organizations only rarely; but when they do, take advantage of the doors they can open. In other words, on the inside of an adversity dwells an advantage. Crisis doesn’t come alone. When it does come, it does come with some friends, open doors, but many only see crisis when it strikes and fails to see the opportunities that it brings. Once again, when a crisis shuts a door, it does open some other ones.
In 1987, a young sales manager felt the winds of change rippling through his community. What he saw as a wind of change, others saw as a mere crisis that came to only destroy. Greg Penske, then twenty-four, had taken over his father’s used-car dealership at a time when the mostly white town of El-Monte, California, was beginning to attract middle-class immigrants from many corners of the world. Some businesses responded with a backlash, pushing local government to enact a ban on non-English signs. They saw a crisis; Penske saw an opening.
Rather than merely hiring a few Spanish- or Chinese-speaking salespeople to accommodate the immigrants, Penske aggressively pursued these new customers. He placed ads in ethnic newspaper, radio, television—even a neighbourhood Nigerian newsletter. He personally appeared, speaking a few lines of Mandarin, in an ad that ran on the local Chinese TV station. Other El Monte business targeted one or two immigrant communities. Penske’s Longo Toyota tried to target all of them, eventually hiring a diverse staff that could sell cars in 20 languages, including Tagelog, Korean, Shangainese, and Vietnamese.
By the end of 1997, Longo Toyota was the top-grossing car dealership in California, pulling in about 350 million dollars a year. “A lot of people in business do not like change,” Penske says. “I love change. I saw it coming and went after it.” When Moses returned to Egypt in the Bible, he was alert to the changes that would signal God’s power. He gazed more intently at the natural forces around him and thought more deeply about what he saw. Do the same with the forces that surround you. Think past the immediate event to the ripples it will cause tomorrow, next month, next year. Anticipate the future and use it to your advantage.
Lastly, it takes a man on a mission to see crisis as an open door. A man of vision does not only see crisis, he also sees an opportunity it contains. And when a door is shut, he sees an open door in it. He also sees an advantage in a disadvantaged situation. A man of vision does not only see today, he also does see through the years ahead of him. He is able to see beyond his nose. And because he sees what others cannot see, this gives him an edge in his field of assignment. Today, do not let your present crisis force you to bow your head. See through the eye of vision, because vision will empower you to see what your eyes cannot see. And do not cry because one door closes; rejoice because many new doors are opening. Do not let your crisis ride on your head, rise today and ride on its back to your next level in life, leadership and business! It’s a new day for you.
See you where great leaders are found!