Ireland

Many areas of the business world are in states of turmoil. At such times the need for leadership is paramount argues Nigel Nicholson, Professor of Organisational Behaviour (London Business School)

Many areas of the business world are in states of turmoil, with employees facing increasing pressures, cost cutting, threats to jobs and a climate of high anxiety.  This is amplified by the fact that it is shared – people see the whites of the eyes of uncomfortable bosses, or feel the emotions of others who share their position.  Some feel they are competing for survival.   At such times the need for leadership is paramount.  In fact this is not just a time of need, but a time of opportunity for people to reveal a new and perhaps unseen capability for leadership – people who can act with the wisdom and skill that today’s challenges require.

The history of leadership tells us  that leaders emerge to meet the challenges of their times. Over much of the last decade, we had been living in an era when key attributes need were for leaders with the mindset and skills needed to grow a business in a climate of abundance and opportunity. Of course, there are new growth opportunities in the present climate, but they are currently in small pockets. For many people, today’s economic landscape is bleaker; and, for all, it is uncertain. These times require a different kind of leadership from the expansionist ethos to which we had become accustomed. They call for a much more savvy and psychological style of leadership, one that is emotionally intelligent and visionary in order to lead people beyond their overwhelming immediate concerns.

It is in this spirit that I offer 10 rules for leaders who must step forward and excel in this business climate.

These depend upon a correct understanding of the psychology of threat and uncertainty. It is critical for leaders to comprehend the mindset of followers, especially in turbulent times.
Survival and success

Understand the psychology of pain, fear, threat and anxiety. This is both quite subtle and quite complex. The need is for leaders to understand correctly what people typically do and think in response to such feelings. Many of people’s reactions will not be what we are used to seeing from them.

Steady emotions. Buffer people, as far as possible, from short-term pressures, yet make sure that they have something meaningful to do. If a major part of their role has disappeared, create a project for them around something that needs doing.

Decentre. This means asking “smart” questions of individuals that help you gain deep insights into how they think and feel, so that you feel what it might be like  to see the world through their eyes. This can be extremely affirming. The process goes as follows:

Ask an individual how he or she feels about a specific event.
Listen and ask more questions to get closer to what the person is experiencing.
Paraphrase to them your understanding of their thoughts and feelings. Acknowledge the reality of what people are thinking and feeling, but help them to reframe, to see the situation from other perspectives. Although it feels as if there is no end to uncertainty, the world is changing and a new order will emerge. When it comes, we had better be in a state of readiness. An analogy might be that we have descended into a valley filled with fog. This does not mean we have no direction to go in, but it might mean we have to hold hands until we reach sunnier uplands. People need you to tell them that better times are coming that there cannot be a return to any previous state, and that our best hope is in staying close to each other and working together.
Develop a narrative that connects the past, present and future. This does not mean being a soothsayer  predicting the future. The future is not waiting to be discovered – it is something to be seized and claimed. It presents an opportunity. Knowing that  it will not be like the past doesn’t mean disconnect.  You need to be able to elucidate the golden thread that connects past, present and future; It is the identity of the firm and the people in it. Each company has a unique story, history and cultural DNA. Some of that is going to be reborn in the new order that will emerge.

Make the narrative personal. These tough times are  also part of your story. Leaders should be unafraid to tell people how they forge meaning, hope and belief out of such times. You have to do so with authenticity – speaking about your own feelings, learning, foibles, biases and so on, in a way that reveals enough of your own fallibility to bring you close to them but not so much as to shake their confidence. The formula is V-I-P: vision, identity and passion. You cannot have a personal vision and express it with passion if it does not connect genuinely with who you are, your identity.

Be close-up and immediate. People need to know the best thing for them to be doing right now. Show them how this connects with deeper and wider goals you continue to have as an organisation. Remember, in times of fear and crisis, people need much more communication than normal, and it has to be personal – face-to-face – not a barrage of emails.

Set mileposts. The future may be cloudy, but that doesn’t mean we don’t have medium-term goals. Tell people what these are, but don’t tell them how to reach them. It builds confidence for people to feel empowered to work together to solve problems about on how to achieve specific goals.

Sacrifice and celebrate. Show that you are just as much a stakeholder as they are. By doing without certain things, you can show symbolically that your life is not business-as-usual either. Spend much more time than usual telling people when they do something right and celebrating achievements collectively to reinforce the sense that you are a community with a common purpose.

Look after yourself. Don’t be a poor role model by letting yourself succumb to stress, overwork and loss of balance. Show people that it is healthy to go home at 5:30 occasionally in order to take your partner out for dinner or a movie. Indeed, tell them that some days you will work a half day from home to get some serious thinking or project work done, rather than appearing to be continually chasing work in ever-decreasing circles. Finally, here’s a little exercise you can do to accentuate the positive.  First write down all the negatives that you are witnessing during the downturn.  Then write down all the positives.  You will be surprised.  These times are like a forest fire – even as they destroy they create the conditions for new growth.  We can see for example how inflated discretionary payment systems were a poor one-club golfer’s solution to the challenge of staff motivation.  Now we are free to create the kinds of recognition and reward that will really unite and motivate people towards building tomorrow’s capabilities.   It is the leader’s job to connect with people to help them fulfil their goals and those of the business – the present climate offers great prizes to those who can do this.

First Published August 2009