The following behaviors characterize a good leader in a downturn:

Honesty and credibility. This can prove difficult. Nobody can be certain about the business environment and its direction. How can you tell people what you believe when you lack full confidence? The only viable options are intellectual honesty and humility. Your authority depends on your ability to facilitate understanding and solutions – not from omniscience.

Ability to inspire. Many people are extremely anxious. The recession descended as suddenly as a tsunami, destroying hard-earned savings and putting jobs at risk. People don’t trust what they hear, see or read. You and your team must inspire employees by working with them to toughen their resolve. Help them develop one or two realistically optimistic pictures of what can lie ahead. People need a vision that sparks the creativity required to develop new ideas and solutions.

Real-time connection to reality. Reality is a moving target. You have to keep updating your picture of it, continuously monitoring change with ground-level intelligence. The same applies to your team, whose members must put all concrete information on the table, however bad it may be. Gather info from unconventional sources, and don’t get locked into one view. Allow the picture to change as you gather new intelligence.

Realism tempered with optimism. Unadulterated pessimism is no more realistic than unbridled optimism. The first order of realism is to understand and accept a problem’s magnitude. Then, focus your people on a vision of what’s possible. Energize them to search for actions that will help them realize their visions.  As Charan suggests, this kind of leadership becomes a performing art. When you introduce the right touch of optimism, your people will tap into their psychological reserves to deal with bad news and transform fear into action.

Managing with intensity. Dig into the right details more frequently than before. Hands-on participation is essential. Only through personal involvement can you acquire the ground-level intelligence needed to act with the required speed.
Boldness in building for the future. The need to conserve cash and survive may pressure you to shortchange the future. You must resist. It takes imagination and guts to place strategic bets with no guaranteed payoffs when there’s little money and great uncertainly; however, it’s critical to aim for long-term payoffs.

A note from Ram Charan:
“Hands on, head in, is the guiding principle.
“Adjust your mindset, gather your people, and tackle the problems squarely. I have been gratified to see that some leaders are already doing this by calling emergency meetings and asking their people to help generate ideas.
“The best of them are finding realistic solutions, communicating, and doing diligent, frequent follow-through.
“If you’re a capable leader, you will have a stronger business after the downturn than you did before.”

This entry was posted on Sunday, November 15th, 2009 at 9:27 pm and is filed under Newsletters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.