Leading Through Tough Times

In 2008, few would have predicted that the worldwide economic malaise would last so long or that it would be so resistant to remedies.

The Eurozone looks like it could come apart at the seams; the economy of China and India are slowing; the unemployment rate in the United States is stubbornly refusing to rise; and the Canadian housing market bubble is threatening to burst.

Add to that a threat of rising interest rates and you have all the ingredients for another round of volatility in world markets.

World politics aren’t much rosier.

Syria, Egypt and Yemen are combusting; Iran, Pakistan, Afghanistan, Somalia, Georgia and Iraq are powder kegs. France has new leadership. So does Greece. As many as 70 other countries will hold national elections this year alone!

Canada is not immune to political upheaval either. In my old stomping grounds, the province of Quebec, student protestors are undoing Premier Jean Charest and the Liberal government over tuition hikes. Charest (pictured below eagle-eyeing the room for pesky protesters) looks about ready to make a dash to the exit.

Shared Consequences

In a global economy, no one is immune from the negative effects of sovereign debt loads, monetary policy problems, banking irregularities, unemployment and lack of consumer confidence.

Recently, a Nanos Research poll suggested that the Canadian national psyche has turned decidedly pessimistic about the future. Only 25 per cent of respondents believed that the next generation will fare better than their parents economically.

With the private and public sector in flux, leaders are facing difficult conditions and difficult choices. This month’s Transformational Leader examines five resources that leaders can rely on in difficult times.

The FIVE C’s

Creativity

“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic."–Peter Drucker

There is never a better time for creative thinking than when conditions turn volatile. A right-brain approach to problem solving opens up possibilities that allow us to move past “yesterday’s logic” and into new paradigms.

Turbulence is actually quite useful because it provides conditions that support change rather than impede it. Needs grow more obvious in transitions, especially if turbulence produces breakdown. When our policies, strategies and actions no longer produce reliable results, new solutions are demanded rather than dismissed or delayed by bureaucracy and debate.

The Great Depression was a hotbed of invention. Insulin, the jet engine, the electron microscope, analog computers, automatic copiers, radar, the lie detector and scotch tape were all invented in the 1930’s.

Last months newsletter Are You Future Friendly? provided ten ways to stimulate creative thinking in your organization.

Courage

"It takes a great deal of bravery to stand up to your enemies, but a great deal more to stand up to your friends." –Albus Dumbledore

To break with conventional thinking requires courage. Leaders must be willing to do the right thing, even when the right thing rubs people the wrong way.

New directions may become obvious over time but are seldom easy to follow when conditions are volatile. Such turbulence often provokes fear. Unbridled fear feeds volatility like gasoline does fire.

The ability to set a course based on vision, values and principles is the mark of leadership. Leaders must be willing to follow the right road especially when it is unpopular.

The real leadership question in Europe is how will the pain of paying off debt be distributed? That answer will require courage, determination and the willingness to make sacrifices that are in regional interests rather than local interests.

Collaboration

"It is the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed." - Charles Darwin

Nothing undermines working together like volatility and fear. Difficult times call for greater collaboration, rather than less. Thinking and acting as one may be the only answer to overcoming adversity and is a natural evolutionary response for survival.

Collaboration is a balance of generosity and receptivity. The ability to share ideas, resources, and support generates reciprocity. However, when fear enters the equation, generosity is quickly overtaken by scarcity. Fear impacts the flow of collaboration and undermines the performance of social systems and markets.

The current dynamic in the Eurozone is a case in point. Austerity measures are being resisted in some countries. Stimulus spending is being withheld in others. Clearly, getting the fiscal house in order is a requirement for regional and global stabilization.

The challenge will be for European leaders to stay together to weather the current storm. At the same time, they must convince their domestic constituencies that there is far more to gain from a common currency and sharing the pain of economic reform than there is to abandon, or expel others from the Eurozone.

Communication

"The less people know, the more they yell." – Seth Godin

Transformational leaders recognize the importance of communication in good times. In difficulty, it’s even more important. Generally, people want to know three things navigating change:

• Where are we headed?
• How will we get there?
• What can we do to succeed?

Leaders must answer all three questions on a regular, reliable basis when there is turbulence.

Imagine yourself on an airplane that suddenly begins to drop in altitude. The pilot and flight attendants do not address the plane’s descent. Without warning the aircraft rolls and then stabilizes. Again nothing is said. By now the passengers are angry and panic has taken over the cabin.

The plane lands and finally, the captain appears from the cockpit. Aloof, he dismisses the passenger’s reaction as hysterical, an over-reaction. He is immediately attacked by all aboard, even the pacifists.

A leader’s legitimacy is earned when he or she is visible, shows concern and encourages people to continue towards their goals despite hardships. A leader who shares the challenges and hardships of a difficult journey earns the respect and trust of their followers. Respect and trust are two invaluable assets in a crisis.

Compassion

“One love, one heart, one destiny.” –Bob Marley

Finally, leaders must recognize the impact of volatility on people. Even in good times, the velocity of life, workloads and stress can wear anyone down. Stress is amplified in turbulence.

Long-term change goes down better when leaders consider the impact of the measures they are imposing. Buy-in is far easier to achieve when people are consulted about change rather than simply being told to change.

Sensitivity and compassion might take a little longer at the front end of the change process. It ultimately saves time and money, and wear and tear, in the end.