We all are aware of the old adage, “What goes up must come down”. The current economic downturn suggests that sometimes they come down faster than others. The magnitude and impact of the chaos in the global financial markets and its impact are still unknown. So too is the domino effect that will undoubtedly touch areas of the economy that had seemed “safe.” This crisis has the potential to shift power and wealth distribution across the globe.
What makes this downturn especially challenging is the fact that many of the people leading organizations today have not been at the helm during similar turbulent times. In fact, most leaders and employees in the workforce today have not directly experienced this type of economic crisis in their working lives.
The last significant recession in Canada occurred in the early 1990’s. This means that members of the workforce under age 40 have not lived directly through a recession in the workplace. Many who today are under 55 may not have been in leadership positions during the last recession. So for most of the workforce this is new territory.
The question everyone is asking is: how do we lead our organizations through this crisis? There are several ways to respond. The first is to overreact. The media is already full of “the sky is falling” stories. Although there might be some truth to the reaction, fear often immobilizes people and prevents them from moving forward.
The second response is to under-react. There is no shortage of leaders with their heads in the sand, just waiting for the crisis to pass. This approach denies or diminishes the potential severity of our economic times. This reaction creates a false sense of security and delays necessary actions that might need to be taken to mitigate risk during a crisis.
The final approach is to react productively—to roll up one’s sleeves and get to work. This approach recognizes that the current economic crisis actually presents us with a significant test to our individual and collective leadership. Crises create many opportunities to get ahead for the well organized and nimble organization. That is because many organizations can’t survive under the weight of their bureaucracy or can’t bring themselves to abandon strategies that served them well in good times. Those organizations will be losing market share—if not divesting of entire businesses. As a leader, find the strategies that will give you a competitive advantage in bad times. Have people in your organization develop plans for how to capitalize on opportunities created by the stresses in the system. Then strike while the iron is hot.
Do you have the courage to take on this challenge and help your organization successfully navigate through this downturn? If you are ready for the leadership challenge, then read on. We present below our top seven leadership strategies for leading decisively and positively through crisis.
Leading Through Crisis – The Top Seven Leadership Strategies
1) Maintain Perspective
It is important to stay calm, cool and collected. In crisis, people look to their leaders more than ever. Everyone is watching you and will take their cues from you. Are you acting with perspective and providing reassurance? Or are you feeding the frenzy of uncertainty and negativity? Your actions will set the tone.
Maintaining perspective isn’t always easy, especially during today’s climate. It’s important to remember that business is about cycles - ups and downs. So this too shall pass. Growth will come again. Many of the world’s great organizations (the list includes GE, HP, and Microsoft) were born during challenging times and then rose with the tide as conditions improved.
To maintain perspective, you will need to take care of yourself. Manage your energy and your mood. Get more exercise, eat better, and improve your sleep. Take time to reflect. Do all of these things even though they are in direct opposition to what you will feel compelled to do—don’t get sucked in to working non-stop.
2) Dial Up The Humility
We were recently working with a group of senior executives in the financial services industry. In the meeting, one leader said, “I’m not sure I know how to move forward. I don’t have the answer.” In fact, no one person will have all the answers needed to lead through crisis. As a result, there may be times when you fail or stumble. So it is helpful to approach your leadership role with a sense of humility. Demonstrate that you are willing to admit to and learn from mistakes and focus on moving forward. It also helps to surround yourself with people who have complementary skills and view points. This way you can leverage the collective intelligence of your team.
3) Be Visible And Accessible
Crisis can lead many people to retreat to safe havens. If you have been in your office too much, you are missing an opportunity. Although you might feel like isolating yourself to create time to think, it is not a good leadership strategy during crisis. As a leader, you need to be visible and accessible. Get out in front and communicate proactively with your colleagues, your team and your organization.
Acknowledge the emotional reactions that employees are feeling—especially the stress that comes from uncertainty. At the same time, communicate your confidence in their abilities to manage the challenges ahead.
4) Deal with Team Dynamics
When people are under extreme pressure, as many are today, it is common to see negative team dynamics surface. As a leader, you need to understand that people’s stress behaviour is often very different than the usual behaviour. Work with your team to help them understand what is in their control, what they can influence, and what they can’t control or influence. Help them focus on the actions that will make them effective. A leader needs to also pay attention to the dysfunctional team dynamics that can be created when there is a scarcity mentality. Now is not a time for finger pointing and blaming, rather it is a time for leveraging the strengths of the team.
5) Build a Community of Leaders
Sometimes the typical response in crisis is for leaders to “hunker down” and focus on their own part of the organization. Although this provides focus, it can reinforce silos and limit effective action. In times of crisis, leaders need to pull together. They need to become even more aligned and engaged in addressing their challenges. Leaders need to come together and work more collaboratively. Get out of your office. Connect with fellow leaders. Create regular forums for leaders to meet and discuss business challenges and opportunities. Work to build a strong community of leaders. If you’re successful, this esprit de corps built during tough times will be a tremendous asset when the good times return.
6) Create Focus
Leaders need to create focus for their teams and their organizations. Strive to eliminate distractions. Distractions immobilize employees and detract from meaningful action. Remind your people of what continues to make your organization successful. Systematically identify initiatives that must start or continue. Even in tough times exceptional customer service, efficient and effective work processes, and going the extra mile are all still important. You should also identify activities or initiatives that can be diminished or delayed. Bottom-line, give everyone on your team something they can focus on and control.
7) Act with Decisiveness
This is no time for slow decision making—the vacuum of uncertainty will be filled by doubt and panic. Instead, think your decisions through and then act decisively. In the majority of instances your information and instincts will lead you in the right direction and these decisive decisions will engender trust and confidence from your organization. When your initial decision doesn’t work, or when circumstances shift, correct your course quickly. During crisis is no time to stay stubbornly committed to a bad course of action.
Leading Through Crisis – Final Thoughts
Good leaders lead in the moment. Great leaders lead in the moment, and reflect on lessons to carry within them in the future. As you continue to lead through crisis, take the time to learn valuable lessons for the future. Remember how you are feeling today and build better risk management into your decisions in the future. Demonstrate your ability and willingness to evaluate the lessons of this chaos and identify new ways of doing things for the future. If business is about cycles, we will likely find ourselves in a similar situation in the future. Begin to take action today that will reduce the impact of future downturns and protect your organization from the next crisis.
In the end, leadership will be judged not by how a leader excels during the good times, but rather by their resilience during tough times. As a leader, what is your personal resolution during this crisis? Are you ready?
Reprinted with permission from Knightsbridge Human Capital Solutions. Written by Dr. Vince Molinaro, Knightsbridge's Managing Director of Organizational and Leadership Solutions, Dr. Liane Davey, Knightsbridge's Principal and the Central Region Leader for Organization Solutions Practice, and Gail Heney, Knightsbridge's Principal in the Organizational and Leadership Solutions. First in Canada to apply a holistic approach to human capital management, Knightsbridge delivers integrated, sustainable solutions to complex human capital challenges. For more information visit www.knightsbridge.ca.
