Many of you may assume that due to the current economic crisis business is going to be in the tank for a long time. Well, there may be some segments of business that take much longer to recover than most but I still believe in our free enterprise system. I also believe that the market itself will make the corrections necessary whether the government intervenes with massive spending or not.
Some of you may be taking the attitude that now is the time to hunker down, cut costs and go into a cautious no risk taking mode while putting duct tape on your wallets and purses. Although I believe caution is prudent and contingency planning may be essential I'd like to stress that you shouldn't make blind assumptions and react too quickly without doing a complete analysis of your independent customer base and markets.
Economic Crisis often Presents Opportunity
Personally I believe that this economic downturn presents many opportunities to those companies that have diligently followed best practice and built a team of employees that can excel regardless of economic conditions. There is nothing wrong with controlling costs and being prudent. However, don't cut revenue producing positions, functions or systems. It is a proven fact that it is easier to gain market share in a down economy. I also think that now is the perfect time to invest in leadership skills training and manager training to strengthen the leadership skills in your company. Consider this:
Many companies panic in times like these ----- training is the first thing they cut. The contrarian view is that when others aren't doing something--- that is the best time for you to do it. If your competition isn't training their leaders, this can be an opportunity for you to create competitive advantage by training yours. Think about it --- As your company leadership skills keep getting better --- your competition is in a holding pattern. Who do you think will be more successful in the short term and the long term?
Dedicate Yourself with Passion and Commitment ---- Position and title may give you power but power in itself does not make you an effective leader. To become an effective leader there are specific skill sets that you must understand and master. This does not come naturally. It takes dedication, passion and commitment to the process. That commitment, dedication and passion includes a tireless effort to improve on specific skills and the development of a personal leadership methodology. The successful leader is constantly building advantages into the organization at a much greater rate while they are eliminating disadvantages. This is especially important when economic conditions worsen.
Creating competitive advantage --- By the end of 2009 (sooner than the news media would lead us to believe), the economy is going to start getting much better. Success will come at a much greater pace if you have proactively built leadership skills into the organization. I realize the economic realities may be that you are in a contingency mode and you are forced to make serious cost reductions. Be careful not to throw the baby out with the bathwater. Remember.......... Companies that will thrive in this economic environment are companies that continuously develop leadership skills at every level in the organization. This includes sales management, territory management and even supervisory level employees.
Winning organizations seem to have a knack for leadership development throughout their organization. One key principle that I have found present in this type of organization is the fact that they hire well and they fire better. Generally their managers have been trained on the interviewing and hiring process. As a result, their success rate for finding and keeping good employees is above average. Recruitment and retention becomes part of their culture and the responsibility of everyone. Leadership is more than just a word in these companies and leadership potential is sought out, encouraged and developed.
Every successful leader I have ever known has taken direct responsibility for the development of leadership in others.
True Effective Leadership is a Scarce Commodity
"Rick, I've been with this company twenty years. What's the point in trying all this 21st century leadership mumbo jumbo when the economic sky is falling on us?"
It's never too late to accept the responsibility for your personal leadership development or the development of leadership skills in your subordinates. One of the biggest needs today in the majority of organizations is the unique leadership ability to transform the organization to win in a tough economic environment. This is not just the responsibility of the CEO. Leaders at all levels of the management hierarchy need to develop this type of leadership. Then and only then can an organization create and maintain competitive advantage in tough economic times...
So......Leadership in Tough Economic Times Requires That You
- Plan Carefully --- Planning carefully prevents knee jerk decisions. I don't care what you call your plan, strategic, contingency or just business planning. The point is this, if you haven't done any planning beyond what you are going to do for lunch -- Now is the time to start. 2009 will require utilization of all your leadership skills and planning is a key skill that is practiced by the most effective leaders.
- Anticipate Resistance--- Resistance is often a result of fear. Make sure you maintain a positive attitude. Your thoughts are powerful and they set the tone for the organization. Pull your tail from between your legs and look at this economic crisis as an opportunity to gain market share and exploit your competition.
- Communicate Openly & Honestly --- Most resistance is due to lack of information. Most companies under communicate. This can be especially crippling during an economic crisis. If you can't trust your management team enough to be totally open --- then you have the wrong team. Don't ignore the rest of the organization either. Keep everyone informed on a monthly if not a weekly basis. An employee's number one concern during an economic crisis is their security.
- Employee Buy In --- Get employees involved in the early stages of change. It's the employees that will get you through this crisis. Make no mistake, employees create profitably.
- Execution --- The golden grail ---- nothing happens unless you execute. Accountability must become a priority. This means follow-up coaching and guidance must be the mantra for all managers. Accountability must be all encompassing including holding the CEO accountable.
- Trust & Respect Employees --- Credibility based on your past relationships will play a key role in creating success. Employees won't start trusting you until you start trusting them. Employees won't start respecting you until you start respecting them. You must understand "Empowerment" and fight the urge to just delegate without allowing the employee to use their initiative and creativity.
- Invest in the development of your management team, executive team and your key employees that you depend on for leadership throughout the organization.
This should be your manner and approach to providing direction, implementing plans and motivating people during this economic challenge. If you can train and develop leadership in your employees, your personal leadership effectiveness will improve. But remember, there is no such thing as a "Born Leader" even though every human being has some level of innate leadership potential. Effective leaders go through a never ending development process. You never stop learning, you never stop growing and you should never stop training and developing leadership in others. That is a key ingredient to succeeding during tough economic times.