Countries around the world are coming through the worst economic downturn since the Great Depression. Despite recent encouraging signs, recovery promises to be tough. Reports show that Canada lags in focusing on innovation, and the education, research and development needed to support it. Many new scientific discoveries are not being brought to market. If governments, business and academics don’t come together to invest more in workplace culture, education, R&D, quality control, commercialization, productivity, and reward for innovation, we will seriously fall behind. Recovery from this recession will be even more difficult.

Where to begin?

We are familiar with some of the obstacles to changing in uncertain times. Highly distracted or stressed people don’t and can’t innovate and change. “A significant number of workers in Canada feel they have lost control of their lives as the economic recession grinds on, unemployment numbers rise and financial security seems to be evaporating” (Canadian Mental Health Association/Desjardins Financial Security Report, May ’09 Globe and Mail). Mental clarity, focus and the creativity needed to change and envision successful business strategies are being drained. Team and interpersonal conflicts impede the kind of exploration and dialogue needed for innovative learning, performance and partnerships. Organizational barriers like unclear roles, structures with excessive approval levels, lack of staff and customer engagement, and risk aversion dampen the urge to change. Rather, there is a tendency to retrench, cut back and avoid risk.

To enable us to navigate the current challenges and position ourselves to thrive in future, leaders must help people change, innovate and take risks. Constructive change can be promoted in many contexts: business strategy, leadership, organization, products and customer service. Externally, change can be encouraged in partner and stakeholder relationships, community outreach and corporate responsibility. Crisp, clear communication in and out to build understanding and elicit ideas is essential to success. Executives and boards must have a sound strategic vision, deeply informed by feedback from employees, customers and stakeholders; they must believe in their strategy and short-term goals, pursue them with energy, and adjust course as needed to compete; they must work constantly to attract, retain and engage talent.

To learn more about leading in uncertain times, I spoke with leaders in 8 Canadian and American organizations. They include: Chris Raguso, Commissioner of Community Development, City of Chicago; Duncan Clements, Chicago’s Burnham Hotel General Manager, and Jennifer Hayes, Regional Director HR, Kimpton Hotels; Betsy Fretwell, City Manager, Las Vegas; Daniel Lamarre, President and CEO, Cirque du Soleil; Bill Feather, President, Planet Hollywood Resorts, Int’l.; Jim Barnum, CEO, Spectrum; John Crocker, CEO, and Jim Keohane, Chief Investment Officer, Healthcare of Ontario Pension Plan; Irshaad Ahmad, CEO, and Noelle Sargeant, VP HR, Russell Investments, Canada.

These organizations are all changing. They are doing things differently and taking risks to position themselves for the future. Most matched or out-performed their competition during a very difficult period. These leaders described new and innovative ideas — some just new to them — that are best practices. Some were big changes, others a series of smaller ones. All modeled professional service, staying close to clients, cultivating talent and crisp strategic focus on the critical few priorities that play to their strengths.

What are their success stories? What results were achieved?

Successful business strategy and engaging stakeholders

Following the turbulence of 2008, Healthcare of Ontario Pension Plan (HOOPP) out-performed Canada’s major plans, placed in North America’s top ten, and was recognized in Bloomberg News as “the best managed pension fund in North America.” CEO, John Crocker doesn’t claim crystal ball brilliance, but rather points to the strong strategic intent around fulfilling the pension plan’s promise to health care workers through liability-driven investing. Chief Investment Officer, Jim Keohane, cites the key approaches that have added value to the fund. First, “financial engineering allows us to …deconstruct the portfolio…and take core positions on key stocks which we cover, and to do so with a smaller number of people with strong expertise and track record.” Secondly, “taking a total portfolio vs. a solely actuarial, approach…. helps enable us to pay out the benefits we promised.” A third innovation involves “entering into derivative contracts we own to hedge risk… we can add value in many more ways and constrain downside risk, while leaving significant upside potential.” Fourthly, “funding trades allows us to select the best bonds to own and lend out again…something few do.” Finally, “we are installing an asset-liability modeling system to better manage risk.”

Another change for HOOPP has been occasioned by changes in Ontario’s health sector, including increasing funding challenges, changed delivery models and partnerships, and labour mobility. Crocker says HOOPP is “building relationships with key stakeholders…hospitals, unions, governments and other health sector groups…. and strengthening capacity in marketing and media relations to influence what’s good for all of us…in provincial budgets, legislation and health policy. We are working to position ourselves as a valued partner, collaborating with others to research and develop approaches that are wins all round in such areas as facilitating labour mobility, controlling health care costs…and attracting and retaining talent.”

In Chicago, innovation has been a tradition, from the Columbian Exhibition or the Chicago World’s Fair of 1893 to the city’s world-renowned architecture and Millennium Park, designed with strong business-government-community collaboration. Chris Raguso, Commissioner of Community Development, says, “Mayor Richard J. Daly’s focus on innovation has helped the city fare well in times of economic challenge. Chicago is home to top-rated hospitals and universities. The city is creating an environment to attract and keep talented students and researchers….Programs like one for bio-tech incubators receive tax incentives to attract talent and nurture new businesses. Chicago Leads, started to help align Chicago’s workforce with institutions and businesses….has four career academies in health care, technology, transportation and distribution, and hospitality. It is becoming a national model for creating efficiencies, engaging business leaders, and developing public-private partnerships.” Educational leadership has also been demonstrated in Chicago’s Naperville school district, where the introduction of mandatory fitness training has led to some of the world’s top scores in math and science (See Spark, 2008).

Chicago was recognized at a recent international Innovation Summit as a leader in housing and neighbourhood development. World Business Chicago, a link on the city’s website, provides a portal for businesses to navigate their way through the city. The results of such innovations can be seen in the impressive, continuing downtown renewal critical to a city’s success.

Innovation and constant change have been keys to Montreal’s Cirque du Soleil’s theatrical and financial success. Says Daniel Lamarre, President and CEO, “We reinvented the circus show…a new form of art involving circus, acrobatics, theatre, music and humour …in a way that is tough to describe and replicate. Secondly, we have been able to integrate art and business in a symbiotic way. . In show business, the show comes first….we take so many artistic risks, but financial strength is also essential. A small creative team, with founder Guy Laliberté, Guy St. Croix, “our creative guy,” and Lamarre meets bi-monthly. Lamarre cites four criteria they discuss for accepting a new project: “a significant creative challenge; an affinity for the people we might do business with; a strong fit with our business model and financial viability; and, finally, socially committed partners …we give away one percent of gross revenue and we expect them to do the same. “

Lamarre described Cirque’s approach to creativity. “We have a creative studio with amazing production people. We bring the best directors in to work with us. We give them resources and ask them to challenge us. There is no recipe…we give freedom to the director and creative team, and most surprisingly, we keep it small…(out of 4000 employees worldwide), we have a cell of 20 conceptors helping us create new things.” Secondly, “we invest heavily in R&D…we try silly things…some work, some don’t, but we keep trying.’ Lastly, “we have a ‘quality of shows’ team…those who see all the shows and protect quality.”

To ensure future growth and continued financial success, Cirque is diversifying content. “We are trying a new experience, our first Vaudeville show. Just as we re-invented circus arts and a new way of doing cabaret, we would like to reinvent (vaudeville).” Cirque, which tours all major cities around the world, is diversifying geographically by building permanent operations in Europe, Asia and emerging markets. An early example is Dubai’s 1800-seat permanent theatre that opened in 2009.

Creating supportive, professional organizations and practices

Change and rapid growth have figured large in Las Vegas. Current turmoil in the housing market is hitting hard and fast. To serve 35-40 million tourists annually and the two million people who work in tourism, and to come through these uncertain times prepared to thrive, Elizabeth Fretwell, City Manager, cites major priorities, including “a new electronic document management capability and a new development services centre. Another priority is environmental sustainability….we are seeking funding for an urban forest program to help with our heat issues. We are also e rethinking how we deliver services to our businesses/residents, who are looking for a more urban lifestyle with walkable, connected communities.…We will win after recovery…as a city which focuses on a few critical things which it does really well.”

Bill Feather, President of Planet Hollywood (PH) Resorts International, took on a “compelling, intense project five years ago by taking over a long-time tourist meca on the strip and changing the brand to a mixed-use hotel and vacation ownership property. We wanted to open PH Westgate Towers as a destination that stands apart from the craziness of the strip…and one based on an innovative Hollywood theme….We did it on the fly…and we ran at 90 percent plus occupancy, even as the property was being renovated. We partnered with others like Pepsi, Panasonic and Starwood, who worked with us through the transition to expand and enrich the customer experience.”

Change at PH involved a comprehensive A-Z approach, including instituting a service culture, in-room design, a wide-ranging entertainment concept and marketing tools at every customer touch point. Says Feather, “We have a loyal customer base with a proven model of open, honest connection and innovative marketing offers….we ask customers questions, listen to them, and deliver …and we guarantee best rate.” PH has been recognized by Travel Zoo as one of the best hotel offers of the year.

Feather talked about promoting successful change and innovation: “Our ‘Red Carpet’ treatment of associates and guests strives to have ‘everyone feeling like a star’ from pre-arrival to check-in to guest experience to check-out ….If we are nimble and make minute-by-minute decisions that are best for the guest…and if we empower our associates…we can avoid bureaucracy and improve service.” Regarding future positioning, “we have insulated ourselves from making big mistakes on strategy, performance and guest services”, says Feather. “We aren’t aggressive during good times and we are consistent in appreciating customers all the time, so we don’t anticipate big swings.”

In Chicago, Duncan Clements, General Manager of Kimpton’s Burnham Hotel, spoke of transforming an old Chicago landmark into an elegant downtown destination. Service excellence, employee engagement, operational efficiency, partnerships and technology innovation…resulted this year in the Burnham being recognized as one of the Fortune 500’s “Top 100 Companies.”

Clements highlighted two recent changes. “First, our adherence to green yielded certification by government-accredited Green Seal….We did it with our sister Kimpton hotels to realize cost efficiencies.” Secondly, Clements says, “we decided we would not compromise on our commitment to our people…we did not lay people off. …but we told our teams we must reduce and asked them for their ideas…they came up with the strategy to flex hours with business/consumer occupancy levels. We did not cut training, employee events or increases to hourly levels, but management gave up increases. We continue to move people successfully across departments to promote professional growth”. Clements emphasized the need for creativity and engagement of all staff. “We work to allow all of us to be entrepreneurs, with ideas for innovation flowing freely between us and corporate. We try to engage positive emotions of our people and have fun….and it shows…in our employee engagement survey which recognizes the role of emotions in service and leadership.” Just as negativity drains organizational wellbeing, positive emotions energize, inspire and help create a healthy workplace. High engagement scores are mirrored in high customer satisfaction and improved productivity, particularly following cross-training of all guest associates.

In innovating for the future, Clements pointed to technology. First, “we are putting in place lobby touch panels…a virtual concierge to book tickets and send messages….The way of the future will be social media…retail organizations (which organizations) will have to have a plan, a corporate statement/face on all key sites like Expedia, Twitter, FaceBook… and update daily.“ Clements spoke also of agility in responding to changing client strategies.” We are acting more aggressively to get business from competitors in a shrinking market… e.g., offering promotions for consortia….We are making decisions so much faster to reap rewards. We are embracing risk even more than last year…but we are doing it intelligently. If we try something crazy, we market it as crazy…we make it feel like we are partnering and playing with clients….and we immediately analyze the financials to assess the impact now and next year.”

Leading and engaging talent and helping organizations and people adapt to change

In discussing leadership, HOOPP’s Keohane says, “We set directions and encourage people to always think of better ways as the world is constantly changing. Getting the right people who adapt well to change is critical. We are early adopters of a lot of new products, which gives us a broader spectrum of choices.” HOOPP works to set the right objectives, put the right model in place, give people the right tools, and then let them decide how to get there. Says Crocker, “We must feed innovative behavior, reward it, align teams …and bake it into the culture” to sustain the change.”

On the notion of sustaining change through challenging times, HOOPP has been creative in its efforts to make a leadership and change initiative of the past two years thrive in its culture. Divisional sponsors and champions continue to hold ongoing community of practice sessions on “building resilience and agility” to strengthen the application of the learnings to the work and to help sustain behavioural changes. A key result has been the continued increase in employee engagement (15 percent this year, following last year’s 29 percent jump. Member satisfaction also improved almost 8 percent, after 4.4 percent in ’08). A recent survey revealed that 77 percent of employees are continuing to apply what was learned. The focus on resilient leadership and blending EQ and IQ competencies has positively correlated with sound decision making, whether in investing or strengthening the internal culture. Another component of leadership involves communicating with stakeholders what HOOPP is doing differently and why it is helping everyone make better decisions based more firmly on fact. Keohane says, “If required, we need to change the rules….try a different business model, and if it fails, dust ourselves off and try something else.” That is truly resilience in action!

Russell Investments provides investment products and advice to clients on three continents. Working to maintain industry leadership, expand operations, particularly in Asia and Europe, and strengthen product and service innovation, it has recently established a global Innovation Council and restructured international operations. Irshaad Ahmad, CEO of Russell Canada and head of global retail operations, says the Council focuses on innovation and business strategy “to help us go where the dollars are going, not where they’ve been.” Gretsky would approve!

The networked organization will overlay local P&L’s with new global service lines. It is designed to bring the best service to global clients quickly, to enable the best investment decisions. Noelle Sargeant, Director of HR, says the networked design “is intended to improve team collaboration where we are more aligned with strategy and constantly focused on the client. Strong CEO support and communication about where we are going and how we work differently in this new culture is helping to provide the clarity everyone needs to see how their performance advances Russell’s goals. “The workforce will be more empowered to come up with innovative approaches.” Sargeant describes their work to develop global systems…”to identify the right degree of what is global vs. local….The new structure, with global functions for investments, retail and consulting will support corporate consistency on brand, investment philosophy, reporting, etc.; it will strengthen cohesiveness and extend pockets of excellence.”

Recent changes include the early identification of hedge fund liquidity problems and closing funds to new investment. Russell has created a new “Retirement rule of 20” to simplify retirement planning, a “helping advisors” initiative with tools for advisors to support clients through the recent turbulence; and “high-speed strategic planning,” which helps advisors better manage their businesses. A process for strategic goal alignment has produced significant increases in associate engagement and a leadership development initiative has strengthened resilience and supported strategic planning and change implementation. To succeed with these changes, Ahmad emphasizes the importance of “an empowered culture, a safe and secure environment which allows people to take risks…and even to fail as long as the process makes sense and risk has been managed. Russell’s primary success measure is client satisfaction…what your customers tell their friends and colleagues about you…supported by secondary measures of operational efficiency and market share….for Russell, this has been transformative.”

What are the lessons for leading change in these turbulent times?

Ten common themes emerged from our interviewees. Successful change requires:

1. Strong, emotionally intelligent and resilient leaders who articulate strategic intent, clarify roles, align goals and empower people to act
2. Highly talented, cohesive teams with well-matched talents and tasks
3. Supportive, values-based cultures which engage and energize employees, customers and stakeholders
4. Intense client focus where we listen, collaborate with partners and deliver
5. Reshaped organizational processes, practices and structures that clear obstacles and create customer value
6. Leading edge technology that enables business goals
7. Proactive decision making and intelligent risk-taking based on factual, well-tracked data and EQ-IQ partnership
8. Strong implementation focus, project management and sustainment
9. Recognition, reward and celebration of the changes
10. Lots of fun!

Finally, Cirque du Soleil’s Lamarre says that: “A CEO’s job is to create an environment in which people are constantly thinking of new ways of doing things…in which they know they can explore…and make some mistakes which we can all laugh at and learn from…..We must challenge ourselves constantly…it is part of our culture to reinvent ourselves all the time.”