In Rough Waters: Being an Effective Leader in Tough Times

REVENUE IS DOWN. Profits are under pressure. Expenses are being cut. Rumors of layoffs abound. Your company is in trouble! You’re worried about your own job. How can you possibly be an effective leader under these circumstances?

First, understand that you’re not alone. Many companies and their leaders are learning to deal with these stressful times. Be sure to tap into that experience. Second, smooth seas never made a good sailor?difficult times test a leader’s true mettle. View these rough waters as a chance to expand your leadership skills for an environment that may prevail for some time. Here are some guideposts to follow.

Wear Two Hats

Now more than ever it is necessary to wear two hats?your business leader hat and your personal hat. This will enable you to separate yourself and your own concerns from your role as leader. Clearly there will be actions, events and circumstances that will be upsetting to you personally. Discipline yourself to deal with them privately. Publicly showing your distress will spread that anxiety throughout your organization. Your role as leader is to provide a productive environment, as free from stress as possible, even under difficult conditions.

Be Visible

In this environment, confidentiality is difficult to maintain. Rumors will run rampant. Every action, word or look takes on meaning for someone. Interpretations will sometimes border on the bizarre. Yet it is especially vital that you be visible to the whole organization during this time. Maintain a calm exterior and communicate often. Walk the halls, talk to people in their offices, eat lunch in the company dining room. Consider using a “hotline” to respond to frequently asked questions.

Stick to the Facts

Be as honest as you can with your people. Don’t try to hide the business conditions. Tell it to them straight. Let them know about the plans for improving conditions. Employees need the information that will enable them to understand the potential impact on their lives. Without facts, people will speculate scenarios that are generally worse than the actual conditions. The effect on productivity can be devastating.

Know How to Let Go

Cutbacks, downsizing, rightsizing, restructuring. Lots of words are used to try to ease the sting of layoffs. It seems almost inevitable these days that you will be faced with having to implement a plan to reduce the size of your organization. This may be the most difficult action you will have to take. How you execute it will have a big impact not just on those who must leave the organization but also on those who stay. From experience I have culled a few lessons that may be helpful.

• Pick the time as carefully as you can. Avoid Fridays and holidays. For three years in a row, one company I worked for spent months on the analysis and organizational details of the layoffs and announced them to individuals just before the holidays in December. Bad move. The individual layoffs were devastating enough, but the erosion of employee loyalty and productivity that resulted was even more severe.
• Make skill the prime criterion. Keep as many of the critical skills as possible. When there are fewer people, everyone needs to be able to pull their own weight, and then some. Protecting your friends will not help get the work done.
• Be flexible. Be empathetic to individuals’ needs as often as you can. When faced with shutting down a business, I needed some key employees to stay long enough to fulfill the remaining contracts. We were able to negotiate a unique package for each person that addressed her needs specifically. They all stayed to the end, and we parted with good feelings. At our farewell party we awarded purple ribbons to everyone. Sometimes hokey is OK!

Reward Survivors

We used to have a saying in the oil business: “When things are going up, everyone looks up; when things are going down, everyone looks down.” This is probably a good description of morale in a company facing hard times. Work doggedly to improve morale. Those who remain will feel like survivors. They will be overworked as they meet the challenges of doing the work of their departed colleagues.

Make sure you communicate. Spend a disproportionate amount of time in the presence of your employees. Listen and respond to their ideas. Pay as well as you can. Find nonmonetary rewards to express your appreciation for their efforts.

Help them prepare for the future. By offering suggestions for the new opportunities that will arise when prosperity returns, you’ll help build the optimism they need to recover.

Focus on Essentials

Rally the organization around some doable business goals. Keep people focused on the here and now of your organization’s mission. Do the best job possible. This is your company. Survival depends on your efforts. Be creative to find ways to do more with less. Changes to business processes and the use of technology?IT’s expertise?are crucial now, so you have a real chance to make an impact.

Don’t Forget Yourself

Portraying a calm, positive outlook will take real effort some days. Take care of yourself physically and mentally. Find ways to have fun, on and off the job. This is exhausting work. Your job may be at risk. Think through the stay/leave scenario. If you stay, use this period to prepare for the future. Develop new skills, try new technologies, build new relationships.

Avoid Key Blunders

No matter how bad the news, some things are never a good idea.

• Do not panic! If you do, try not to show it.
• Keep your head. Avoid making decisions based on emotion rather than logic and facts.
• Tell it first. Never let your employees hear the news from outside sources if you can help it.
• Do not be bitter. Life is sometimes harder than we like it to be. Bitterness only makes it worse.
• Keep a thick skin. Resentment will be directed at you in your role as leader. Do not take it personally.
• Guilty as charged? You are not the perpetrator here. Do not allow yourself to fall into this guilt trap.
• Leave it at work. Try not to take the stress of the day into your family life.

Now one final word: Change, even negative change, brings opportunity. Scarcity of resources and talent allows new roles, new responsibilities and a chance to demonstrate more capability. Take advantage of it!