Leading in Uncertain Days:
What it Takes to Survive in Today's Turbulent Times
Heading into the fall of 2001, times were turbulent enough for most people - the economy was struggling and the daily flood of layoffs was enough to make anyone nervous. The terrorist attacks of September 11 - horrendous in their own right - seemed certain to give the economy yet another kick in the face. Not long after, the Enron collapse sent shock waves through the business world and the shock waves continue as more scandals come to light. Together these events are overwhelming proof that times have taken on a turbulence we blissfully managed to avoid in the last ten years.
Of course, turbulent times are nothing new historically and the business world has proved its resiliency in the past. But it's clear that today's climate calls for a different kind of leadership than the late 90s, when lofty visions and boundless energy seemed to top the list of key leadership traits. Whether they are dealing with the aftermath of a natural disaster, a terrorist attack, a recession, an accounting scandal or any number of other difficulties, executives today increasingly face new and different challenges than they did just a few years ago.
A calming influence
The biggest of those challenges may be in allaying the fears of employees to keep them focused and motivated. "Employees may have a strong emotional reaction," to a crisis, says James G. Clawson, a professor of business administration for the Darden Graduate School of Business Administration at the University of Virginia. "The first challenge of the leader in turbulent times is to help people manage these wild emotional oscillations," says Clawson. Unlike in calm times, when a leader may have been called upon to galvanize employees out of boredom or routine behavior, in turbulent times it's the leader's job to calm people down enough so that they can continue to function. To do that, the leader needs to appear face-to-face, offer comfort and compassion, and be able to explain what he or she is doing and how the company will go about recovering from the situation. "Leadership is nothing if it is not about managing energy," says Clawson.
For a how-to example, you don't have to look far. After September 11, New York Mayor Rudolph Giuliani emerged as the calming and uniting influence for the city and even the nation. In the same way, executives dealing with a crisis must step forward to calm and unite their employees, a move not everyone is prepared to make. "A lot of people in difficult times crawl under a rug, which is the worst thing you can do," says Paul A. Argenti, professor of management and corporate communication at Dartmouth's Tuck School of Business. "Being calm and visible is critical."
Even when there isn't an immediate crisis - say in the case of a recession, where the impact may be felt over a long period - executives must help employees deal with the feeling of uncertainty that difficult times bring, says Robert E. Mittelstaedt, Jr., vice dean and director of the Aresty Institute of Executive Education at The Wharton School, University of Pennsylvania. "It is very different than a few years ago, when people worried a little about future but on the whole felt pretty good about it," he says. Today uncertainty is everywhere.
A strong mission
Although having a clear understanding of the organization's mission is always important, it becomes critical in turbulent times. To respond in a crisis, then, leaders must have a clear set of principles that lead their decision making, says Clawson. Executives who are "fuzzy" on their organization's mission will find "that fuzziness is accelerated or exacerbated in turbulent times," he says.
To illustrate the importance of a strong mission, Argenti points to one of the most successful disaster recoveries of all time - the Tylenol scare in 1982. When seven people died after taking Tylenol, the company had to decide what was more important: profits or its commitment to the health and safety of consumers. With a strong mission statement that had always put consumers first, Johnson and Johnson advised the public to stop taking its products until the problem could be solved, recalled at least $100 million in products and opted to hold off on entering the European market with Tylenol, a decision that cost it $1 billion. Its course of action was costly in terms of lost revenue, but effectively managed to save the company's reputation.
The lesson is simple. If a company's core value system comes down to nothing more than making profits, it will find itself in deep trouble when a crisis emerges, say both Argenti and Clawson.
And just as the organization has principles, so do must the executive. "The real moral foundation of turbulent times leadership in particular is to be clear about what is right and wrong, what your core values are and what you will compromise and not compromise," says Clawson. When an executive strays from those principals, the moral foundation of his or her leadership begins to erode.
To be sure, honesty is critical, says Argenti. "I don't see how you can get through difficult times by being dishonest with people," he says, pointing to Enron as a prime example. "It just makes it that much worse the next time." Far better to admit how bad the problem is and follow it up with a reassuring and well-thought-out plan for how the company will respond and recover.
Of course, there are certain skills that make a leader more effective in difficult times. The ability to communicate compassion and empathy are critical skills for someone trying to lead others. Emotional intelligence plays a key role for leaders, too. "They have to have the ability to manage their own emotions, to not get too over-reactionary, but to be calm and analytic and think through what to do next," says Clawson. "That's a rare skill." Finally, executives in difficult times particularly need the capacity to organize disparate groups, he says. Again, Giuliani is a prime example of this, helping to coordinate the many agencies that had to be called into action to respond to the terrorist attacks.
Mittelstaedt agrees that working with and getting input from multiple groups is vital, but adds a few other skills to the mix: flexibility, a willingness to think broadly, and an ability to sense signals in the economy and the environment.
Ready or not
While most executives recognize that the business world is a different place than it was just two years ago, many weren't adequately prepared to handle the massive changes they encountered, the experts say. "It's a fundamental issue of human behavior," says Clawson. "They reflect on the things they've learned and they presume this is the way things are going to be." The challenge going forward is to take a historical perspective, to attempt to see the signals and to respond to them. Just as sober drivers do a better job of quickly interpreting data - like the data that tells them they are about to hit another car -- "executives need to be more sober in seeing and interpreting and responding to things in society, whether a strike, a terrorist attack, or an accounting anomaly," says Clawson.
Fortunately, while many executives weren't completely prepared when the economy began to sour, most have the perceptive, emotional and intellectual power to handle tough times, says Martin Wolff, CEO of Wolff Group Inc., a Clarks Summit, Penn.-based management consulting firm. "They have that emotional or intellectual power to adjust to these times and are now tackling the strategic issues to either stabilize their organization or to make it grow," he adds. "I'm pleased with the resiliency of individuals and leaders."
Fortunately, too, the difference between being a leader today as opposed to a few years ago is more a matter of degree than a difference in content, says Clawson. As it turns out, principles that guide leaders through difficult times are not so different from those in calm times.
According to Clawson, there are a few basic tenets that serve executives well. To succeed leaders must:
Wolff adds this advice: Never stop learning. "It's so critical that you learn new things," he says. "The assumptions of a month ago or 10 years ago should be evaluated, but your ability to learn fast is what really makes a difference." That's wise thinking in all times, but in today's business environment it seems truer than ever.
Ellen Stuhlmann is Managing Director of ExecuNet. ExecuNet is recognized as the Internet's most comprehensive resource for effective career management, exclusively for executives and senior-level managers with salaries above $100,000. Founded in 1988 and online since 1995, ExecuNet is the nation's first and most respected online executive career site. ExecuNet is a community of senior level executives, and has served more than 50,000 executives and 5,000 companies and executive recruiters by posting more than 30,000 executive positions annually.
Reproduced with permission of ExecuNet.
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