Why is the impact on leadership of the current economic crisis so different from the typical cyclical nature of business that most organizations experience? After all, now-bankrupt former corporate giants like GM and Chrysler have been through ups and downs in the past, yet they managed to stay intact, sell products and services, generate customer loyalty, and deliver a return to shareholders. Why are such icons of American business and other corporations like them struggling to survive? And what do their management teams need to understand about the forces shaping this new economy and how those forces have redefined the requirements for outstanding leadership?
Never before have leaders experienced the scale and complexity of change that they face now. Consider for example, the competition businesses face in a flatter world; the impact of global issues like terrorism, pirating, climate change, and pandemic disease; social forces shaping the work environment, including changing employee expectations, an aging workforce, and changes in how individuals communicate; and the influence of inexorable, rapid technological advancements. All of these are being played out at the same time as an economic disaster that has spanned the globe.
In this high-stakes game of survival, the most successful leaders will demonstrate the ability to simultaneously monitor these forces, measure their impact, and create new opportunities rather than wait for them to appear. The rules of business have indeed changed—in a way that demands leadership at the speed of thought and the capacity to build measured, decisive, and inventive teams.
Some of the relevant operating tenets of which leaders should be mindful while facing the punishing winds of this perfect storm of economic, global, political and social change are:
1. The need to expand the number of radar screens:
Information and change are coming at leaders at a maddening pace. Where it was once sufficient to have a few screens to monitor the organization, a wall full of them operating in real-time is now essential. Leaders should be asking, "Do we have our fingers on the pulse of everything that's critical to our business and are we rapidly sending useful data to those closest to the customer?" Organizations will need to quickly build the capacity for discerning what to ignore and what is critical to address because it affects success.
2. 100% Certainty is a luxury purchase:
In the past, companies worked toward the goal of certainty before making crucial decisions, but that degree of accuracy requires far more time than today's dynamic markets may allow. Working to achieve absolute certainty could render a business in last place behind its competitors; successful organizations in this new economy will be comprised of leaders who are decisive, measured risk-takers.
3. There is no time to solve the wrong problems really well:
In this rapid-fire new leadership environment, it's critical to clearly and accurately identify the challenges on which the organization must focus so that precious time, energy, and resources aren't wasted exploring issues that won't advance the business. Opportunities have long since evaporated for developing elaborate plans and strategies that aren't applicable to the organization's most pressing issues.
4. Redistribute the authority to say 'Yes':
With the myriad choices available to customers and access to information about what competitors can offer, empowering those at the front lines of your business is key to survival. Customer service is not optional; it's imperative. In this economy, more than one company has gone under in part because they failed to deliver on customer care (think Circuit City).
5. Speed breeds mistakes that aren't necessarily fatal:
There is no doubt that by ramping up the speed with which business is done, leaders can expect their teams to experience more mistakes. At the same time, mistakes are the midwife of innovation, so the objective is not to restrict progress by slowing things down, but instead assume errors will be made and plan for them when allocating project time and budgets.
Mistakes are inevitable, so be prepared to fix them quickly, focus on what has been learned by them, and move on. Finger-pointing and searching for places to lay blame are time-leeches.
6. Trust and transparency are your allies:
There is no room for micro-management in this business environment, so a healthy level of trust must exist between leaders and their teams. That means being transparent about the realities of the business, so that everyone is working from the same platform of information.
7. You can't win without smart, passionate people:
Imparting trust is a lot easier when the organization is staffed with bright, passionate individuals. Everyone in this business environment needs to bring an A game, making it essential for leaders to identify the very best talent and then support their ongoing development. This is not the time to dial back on employee-development programs; it is the time to insure that your development dollars are being spent where the return will be greatest.
8. Verify that you've communicated effectively:
Many leaders diligently conduct face-to-face or town hall meetings only to later discover that their messages have either not been understood or have not been acted upon. If leadership messages and crucial information about the state of the business are not penetrating all levels of the organization, the business will function with a handicap that may derail its success. While it's important for leaders to be accessible and consistently on-point, the managers who direct teams must also translate the leader's message at the divisional, departmental, and group level. Don't assume that because you've spoken, you have been understood. Verify that your message as well as its intent have saturated every layer of the organization; spend as much time focusing on the internal messages as you do the external ones. Be sure they do not conflict.
In these dynamic times, employees must understand the unique impact of their role on the business. That requires frequent, real-time communication at all levels of leadership across the wide variety of platforms available today, including internal communications platforms and external social networking sites like Twitter, Facebook, and LinkedIn.
As my friend, Chris Johns, editor in chief of National Geographic magazine said in our recent interview, "This is not a time for wimps in management." It has never been more important for leaders to boldly operate at the intersection of their skills, values, and passions, because the impact on employees and results is significant.
Highly skilled leaders are able to impart a sense of confidence about the future; by demonstrating robust values (and the behaviors aligned with them) they engender trust in the workforce; and leaders who operate from a base of passion generate excitement and energy throughout the organization. The future success of all organizations requires nothing short of this winning combination.