The Hindu Business Line : What leaders need to do

A couple of months ago, I was invited by an organisation that had been in existence for close to 54 years to help them examine their past and recognise the good they have done over the years. The CEO mentioned that the organisation was going through a slowdown, yet he did not want to view it as terminal or insurmountable. He felt that if we explored the organisation’s past, we would discover success stories that we could revisit in the current scenario and thereby recreate past health.

The CEO of another organisation desired that I pick from a pack of 20 potential leaders, all ‘fast-trackers’ he said, and identify five leaders who can foment future growth. Both these organisations are experiencing the throes of the present economic downturn.

Though it is believed that people understand a downturn, most people have really never experienced a true downturn, especially as it is being played out just now, as a crisis. Since no one has a headstart in understanding how to respond, the advantage will go to those who work hardest now to see what is really happening in their business and industry and come up with bold, innovative responses to an unprecedented environment.

Times of crisis are actually great opportunities for leaders to develop new abilities and leadership styles. This is the time for leaders to recognise patterns; patterns which may help learning for the future. Leaders need to develop certain new abilities. When limbs are lost in an accident, the body compensates; so also, high abilities could be developed during times of crisis even though they may not occur naturally. The challenge for leaders is to get specific in their minds about exactly which abilities they want to improve and how these will turbo-charge the results.

How to respond?

Leaders can never promise their people that the world won’t jump and bite them unexpectedly. But they can show them that as people and an organisation, they are not entirely at the mercy of events. Leaders need to explain — probably in much more detail than during normal times — what the company must achieve in order to survive and thrive and see that each person understands his/her role in making it happen. A crucial distinction is that people don’t need to be promised success; they know such a promise is unrealistic. They just need to know what they can do, within their own authority and ability, that will best help the company succeed and thereby protect their job.

A few months ago, while many organisations were facing the challenge of recession, the CEO of an organisation invited me to work with his senior team. He explained that there was panic among employees, across the organisation, that they might be given pink slips anytime; though the organisation did not sack any employee and the CEO was clear that there was no such intention. The organisation was dealing with customers who were increasingly demanding. There was pressure inside in terms of (de)motivation and from the outside in terms of additional services without additional costs.

We formed a core group consisting of senior members of the organisation, who were leaders of their respective businesses and departments. To begin with, I facilitated processes for the first few weeks to integrate the core group and helped them arrive at a common understanding and mutual trust. Then, each core group member was encouraged to communicate their intentions clearly to their respective businesses and departments.

Apart from communicating the organisation’s intention to support them during this time of recession, they also listened to the employees’ plight and invited each member to offer support. This built trust among the employees and there was a visible, positive change in behaviour at collective levels.

The best and clearest explanation comes from the military. One of the best-established precepts of military life is that no solider goes into combat for his country; he goes in for the guys on either side of him. The analogy in business is that people don’t go to work in the morning to make share prices go up. They do it because they believe that they and their team are doing something good.

Therefore, this is the time for leaders to build group cohesion by communicating within the organisation the need for mutual support. Leaders who emphasise mutual encouragement, optimism and hope among team members maintain inner wellbeing during these adverse times. Nothing gets people to bond like shared adversity. When people share adversity, they are preparing themselves to conquer together.

No organisation is perfect, but every organisation has victories that all employees should know about. Especially in a serious downturn, the value of publicising success within a company is tremendous. The opportunity for leaders and companies is greater now to tell their employees about the organisation’s successes.

It is amazing how companies cut training and development in a recession. Employees who lack training feel more stressed and uncertain and will make bad decisions. Giving them extra training during a recession prepares them, for when the economy turns these employees are probably far better prepared than employees of any competitor.

A checklist for Leaders

Leaders should also be aware of some of the truths of a downturn:

Layoffs are expensive. Severance payments are sometimes heavy and the cost of its impact lasts long. Thus, by the time we have settled hefty payments, it is time to hire again and this time at an additional cost. Hiring and training of new employees when the economy turns is more expensive than doing ‘maintenance training’ for existing staff.

In a knowledge-based economy, the contents of an employee’s brain is worth more than anything else in the organisation. Thus, when you lay off employees, valuable knowledge sometimes walks out of the door.

Productivity suffers as morale is deeply affected by layoffs. Most employees feel unsettled and experience grief when they see their colleagues leave and begin to work to protect their jobs, thus not working to their fullest.

The brand, as an employer, also suffers during layoffs as image falters.

The leadership pipeline suffers as layoffs increase the chances of firing future leaders.

What is important therefore is for leaders in organisations to recognise that the current crisis is an opportunity to demonstrate leadership. Leaders have five roles to play in this time of crisis:

Stand up and be seen: People want to be led. We want the leader to be a repository for our fears. When people are desperately worried, they want to know that someone is thinking of them and is willing to speak for them.

Be calm and in control: People assume that leaders know more about a crisis and they look up to leaders.

Be decisive: Irrespective of the consequences of a decision leaders have to be decisive. All business decisions are not necessarily made with complete information, so leaders must learn to act with perspicacity.

Show fearlessness: Leaders are not expected to be fearless. They are expected, however, to show fearlessness.

Explain the crisis in a larger context: People need to understand the context in which they are acting and the leader must explain the background.

One of the examples we can quote is Mahatma Gandhi. He communicated clearly, in a larger context ‘freedom for India’. Though he held no political title, he demonstrated fearlessness by refusing to comply with laws that were unjust.

He was decisive irrespective of the consequences and his decisions were in tune with his values of non-violence, love and truthfulness. He identified himself with the poor masses of India and people believed that there was someone who was thinking of them and willing to speak for them. People simply looked up to him and followed him with faith.

Thus the current recession is, perhaps, the turning point for a new economic world, perhaps of a new order, especially for leaders. It is likely that if we are prepared, we will face the future with greater aplomb; for in the future, there may be industries we can’t imagine and jobs which we lack the vocabulary to describe. What is now required is a leap of faith.

(The writer is an organisational and behavioural consultant. He can be contacted at ttsrinath@vsnl.net)