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EY's Lee Henderson On Balancing Human Capital and Transformational Leadership in the Middle Market
by Isaiah E. Bailey | on 16 October 2020
Disruption and transformation may be uncomfortable in the short-term but will leave the middle market in a better place long-term.
Creating learning cultures is a key component of transformational leadership for middle market executives.
Internal marketplaces are the sources of untapped talent that will enable the middle market to propel into the new future.
Size does not limit ingenuity. That's the message echoed throughout yesterday's CNBC Evolve Spotlight: The Middle Market event moderated by CNBC Reporter Kate Rogers where EY Americas Middle Market Leader Lee Henderson stopped by to drop some gems.
Midsize firms of all industries must pivot quickly in order to come out of the COVID-19 pandemic stronger and better. Let's take a look at some of the focus points for middle market managers Henderson so generously provided.
Understanding Rigor and Discipline as a Mandate for Sustainability and Growth
2020 has presented the middle market a unique set of obstacles and pressures that now require companies to manage their business and workforce at a level of rigor and discipline that has been unprecedented - and doing so with less resources.
To be successful in this new normal, organizations have to be vigilant and purposeful about every hour and every dollar spent. Each and every investment made should be part of a strategic transformational effort to realign the organization with its broader vision moving forward.
Henderson explains it goes a bit deeper as well into the timing of cash conversion for example. Take a look at inventory. When you buy inventory today, the focus is on when the cash from the sale of that inventory hits your bank account. That's the critical data point - not only what the return will be (dollar value) but when the return will be (timing of cash conversion).
Unlocking and Unleashing the Internal Marketplace as a Source of Untapped Talent
The importance of creating learning cultures throughout the workforce cannot be overstated. The human capital portion of the transformational leadership equation is one of the most important areas of focus by middle market business leaders - the need to upskill and reskill for the needs of the future.
'Weather the storm' is an outdated and misguiding term. It's not about waiting for something to pass and returning to what used to be (the so-called normal). It's about planning, adjusting and realigning the workforce with business policies and practices for the future.
The middle market cannot return to what it used to do prior to the COVID-19 pandemic. Now is the time for a global pivot where the workforce is reskilled and upskilled to prepare for what is to come.
Undertake New Initiatives and Strategies Starting from Scratch
Before addressing the workforce, middle market leaders should analyze organization and strategic plans with a blank sheet of paper. Start by analyzing and developing a strategic vision for the organization moving forward and then determine what investments are required to make that strategy a reality. It's about the ability to flex and transform.
Upskill and Reskill Efforts Come Second to Company Culture and Values
More important than the the ability to upskill and pivot is the middle market's ability to curate company cultures and workplace policies that cater to its workforce. The challenge will become keeping culture in place as companies grow.
It's about the ability of business leaders to communicate with internal stakeholders (not just customers and suppliers). The middle market must have communication plans about key business decisions and transformational efforts.
Focus on the people that matter the most, your workforce. Listen to their needs and get them the skills they need for the future. The internal marketplace is a source of bright and sharp people who can take on new challenges to move the middle market forward.