A Perspective from Diamond's CEO:

On Leadership

These days it seems you can’t talk to a client, a friend, a member of your staff, or a member of your family without hearing concerns about the broad economic downturn, the ripple effect of the subprime mortgage mess, or the government’s attempts to right the financial system. That’s understandable. In times of stress, organizations don’t always operate like well-oiled machines. Emotions run the gamut, from courageous to fearful, rational to irrational, optimistic to pessimistic.

At times like this, when it feels like things will never be the same, many of the leaders I know find it useful to reexamine the wisdom of the past. It is a way of anchoring your thinking about current challenges to something larger, perhaps, than the news of the day. For me Peter Drucker is one of those anchors and I’m reminded of one of his most famous statements about leadership.

“Management is doing things right,” wrote Drucker. “Leadership is doing the right things.”

On a personal level, I have been moved by the fact that our people and our clients are acting with great courage and empathy during these challenging times. I take comfort in knowing that they are doing “the right things.”

Many of our clients recognize that, in fact, things won’t return to the way they were. Markets and customers will be forever changed, even if at the same time, they remain optimistic that times will improve, as they surely will.

To that end, compliance and risk management is even more important today than it was in the past. For example, wrestling with new TARP regulations and managing changes in how financial instruments are traded are all part of new base requirements of doing business for many financial services firms. But the best organizations take these challenges a step beyond and recognize that just keeping up is not enough. They are asking the right questions about what is the right thing to do. How do we improve our overall business architecture? How can we reduce our costs and improve our effectiveness? How can we best be positioned for growth when things turn?

Our people are working alongside clients to rethink their business design and improve their operating performance. Leveraging information-based strategies and new capabilities that allow for better and more decentralized decision-making and improved focus, even while retaining an appropriate degree of control, we are working with one of the nation’s largest insurers as they reinvigorate the performance of their agents. It is inspiring to see such leadership even in the face of the most significant downturn in nearly 70 years.

Even more interesting is to see where innovation is the rule and not the exception. Despite what some may think, there is still an extraordinary degree of innovation going on . . . yes, even in these times. We are engaged with an airline to use Web 2.0 technologies to enhance that carrier’s community. Hard to believe, but there are airlines in which current customers have a great deal of passion. The community will strengthen their current customer relationships and attract new members. This airline sees the downturn as an opportunity to capture additional market share while industry laggards struggle.

In this environment there is no margin of error in doing things right. Leaders need to mobilize the right resources for success and execute flawlessly if they hope to improve their competitive position. But the greatest hazard is losing sight of what’s required to survive in the present and thrive in the future. Particularly in stressful times, business leaders have a responsibility to guide their teams towards economically significant opportunities. They have an obligation to imagine new opportunities and chart a course to capitalize on them. They have a duty to acknowledge that cost structures and industry dynamics have changed forever and to chart a new course accordingly I hope you can find time, as you grapple with any immediate problems facing your business, to step above the fray and consider your larger mission as a leader. And if you’ve got a minute, I’d like to hear about the wisdom you draw upon as you lead in these uncertain times.

Regards,

Adam J. Gutstein
Chief Executive Officer