On Leading in Uncertain Economic Times
December 30, 2008
You don’t need to hear yet again that we as a nation are in a state of economic turmoil. But you should be aware that moving forward, your employees are looking to your leadership to guide them through economically troubled waters and onto safe workplace ground. Tensions are high, pocketbooks are light, and morale is low. Now, more than ever, they need a leader who is strong, realistic, and able to create a sense of balance. It is not an easy task, but we have laid out some tips to help you reinforce confidence during these trying times.
How you choose to react to our current economic situation as an employer – and as a leader – will make a significant difference not only in your own life, but in the lives the employees who depend on you.
1. Absorb Uncertainty.
You likely have your own set of worries and uncertainties about the future. But as a leader, it’s essential to keep your own uncertainty in check. Leaders often tend to let their own feelings overwhelm them, and neglect to consider how their employees will receive negativity from those they look up to.
As leadership speaker and author Rita McGrath asserts in her Harvard Business Publishing article “Absorb Their Uncertainty – And Get Your People Unstuck,” leaders should ask themselves the following questions to more effectively measure the current environmental barometer. You can then create your communication plan based on this assessment.
- Am I providing a clear set of assumptions for people to operate on, with the understanding that they may change as more information becomes available?
- Have I made sure to reach out to people who are badly affected by the current turmoil?
- Am I moving quickly enough to help people get past the current situation to focus on the future and what is coming next?
- Have I made clear to the people who are deeply valued by the organization that they have a promising future?
- When a decision will affect someone negatively, have I personally delivered the bad news, dealt with the fallout in a fair and transparent way, and made it clear to observers why the decision was made?
2. Communicate and Encourage.
In his Human Resources Magazine article “Managing in Tough Economic Times,” Associate Publisher and Editor Craig Donaldson stresses the need to ensure everyone is on the same page during an economic crisis. He adds that performance suffers when alignment on key goals is absent, according to studies on strategy execution. This mentality applies to departments from the top down, and as a respected figure, it is important for you to lead by example by communicating your vision and goals for the company out to your employees.
Encouraging those who work for you to express their concerns – as well as their ideas about the future of your organization, however, will help restore lost faith and improve morale throughout the office. “Encourage questions and new ideas by making it safe for employees to raise them,” Donaldson advises.
By “encouragement,” however, I do not mean this:
3. Be Positive, Yet Realistic.
While things may fluctuate between better and worse, it is vital to be consistent – and authentic – in your communication. While your employees don’t expect you to paint a constant rosy picture of what the company may be going through, they also will tire of an endless stream of dire news. Strike a healthy balance between the two. Be honest in everything that you say, but realize that they are human, and that negative news can have a negative effect on morale.
4. Creativity. Innovation. Future.
Contrary to popular belief, recessions, and not peak economic times, are actually the best times for companies to invest in their competitive strategies.
“Studies have shown that companies have twice the opportunity to change their relative position in an industry during a recession compared to growth times,” according to Kevin P. Coyne and Shawn T. Coyne in their Harvard Business Publishing article “Recessions Call for More Creativity, Not Less.”
Begin by encouraging strategic brainstorming and original thought in your employees. Provide a forum for exchanging ideas, whether in the form of formal department-wide formal meetings or less structured gestures such as email feedback, small brainstorming sessions, and Q&A calls.
One Last Thought
Be human. Reach out. Everyone is affected in small and large ways by this economic downturn, but by being compassionate, realistic, empathetic, and innovative, and by making your employees a valued voice within your organization, you will come out of this a much more effective – and respected – leader.
- Categories: Economy, Employee Engagement, Employee Retention, Employer Advice, Leadership Development
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