A Good Leader in Times of Economic Crisis
By Jose Ruiz
What a difference context makes in our perceptions of leadership. After 9/11 I once asked a group of friends from New York what they thought of Rudolph Giuliani. They unanimously replied that he was a great leader – decisive, assertive, and determined, with the ability to inspire a sense of security in a time of fear and crisis. When Mayor Giuliani later ran for President I asked the same group the same question. They then said, again unanimously, that he was a poor leader – stubborn, hard-headed, and prone to making unilateral decisions.
In a context of immediate crisis, Giuliani’s character and management style had made him appear to my friends to be an exemplary leader. But when the context changed from an immediate crisis to the challenge of leading a nation of many voices and political differences over the long term what they had once seen as decisiveness and assertiveness struck them as inflexibility.
Certainly, decisiveness, assertiveness, and determination are typically cited as key traits for a great leader. So are integrity, intelligence, self-confidence, and – in the world of commerce – general and industry-specific business acumen. But as the work of Heidrick & Struggles with boards and CEOs over many decades shows and as a series of recent conversations with leaders and others confirms, there are other, often overlooked traits of leadership that enable leaders to stand the test of time. It is these traits, coupled with the other more obvious leadership qualities like decisiveness, that are particularly valuable in times of deep and prolonged crisis like the current recession.
“The key is adaptability,” says Gilad Langer, Product Strategist and Technical Leader at Camstar Systems, a leading provider of enterprise manufacturing execution and quality systems. He explains that people who are continuously perceived as great leaders adapt to what is required at each moment to remain effective influences on the teams they lead. As business technology consultant Gary Clarke, puts it, “The qualities of leadership that are respected and admired by others shift with the demands of time and as the group’s needs and perceptions shift as well.” About the current economic situation he says, “Right now, someone who can demonstrate empathy, clarity and sacrifice would be nice to see as opposed to greed and aloofness.” George Dakos, Managing Director of Stedima Business Consultants, Athens agrees. “The great leader,” he says, “should be able to act as a beam of courage and optimism for others when they are hit by the crisis blues.”
However, that doesn’t mean that employees want to be shielded from the truth. Most people when asked what they expect from their leaders in times of economic crisis say they want honest communication and transparency. Avi Singer, Director of Organizational Development at Undertone Networks, an online advertising network, calls it “sincerity.” He points out that people would much rather hear bad news, prepare themselves, and act rather than live in anxiety. As an executive from a Fortune 100 company observed after she was laid off: “I’m concerned about my future, but I’m grateful to the organization for the way they went about doing things. The public announcement regarding cuts was made on Monday. They told us who was being laid off on Tuesday, and on Wednesday the CEO announced it was over.”
Many people agree that empathy, transparency, and other traits that provide comfort and stability are what employees want in their leaders now. However, a leader’s responsibility goes beyond what people want now. Leaders must also bear the burden of balancing current needs against the needs of the future, a balancing act that requires courage, especially in times of economic crisis. Says Kevin Kelly, CEO of Heidrick & Struggles, “Courage in leadership is about making decisions that are for the benefit of the organization over oneself.”
As these conversations indicate, these uncertain times call for leaders with a subtle mix of characteristics. They must provide comfort and stability, show empathy, exude optimism, proceed transparently and sincerely – all while making difficult decisions, taking courageous action, and decisively guiding their teams. That’s a tall order, but we’ve seen it fulfilled time and again by great leaders in times of crisis.
Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an Executive Recruiter / Executive Search Consultant he has served multinational clients in industrial sectors and consumer markets. He can be reached at +52 (811) 1771-4507 or jruiz@heidrick.com
About Heidrick & Struggles International, Inc.
Heidrick & Struggles International, Inc. is the world’s premier provider of senior-level executive search and leadership consulting services, including talent management, board building, executive on-boarding and M&A effectiveness. For more than 50 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com
Jose,
Here are my best thoughts about the actions of a successful leader right now (this is a little different from the question below of what makes a good leader – but making critical judgments and taking action is probably the key attribute of a good leader under fire):
Protect strategic investment expenditures – resist the pressure to kill the future.
Systematically pursue reductions of waste and process variation in a logical fashion the people can follow and connect the dots. Focus actions on quick hitting projects.
Identify and protect resources early on that have difficult to replace knowledge and external relationships (let them know they are key).
The other thing that is important for a leader during a time if crisis is to be “out in front”. Highly visible to the people in the organization, so that they believe the ship is well controlled and not drifting among a tide of uncertainty. They will naturally be distracted by what is going on around them from the media and personal lives. They need a leader that constantly reminds them of what we need to do “right now” and to bring them back on path regularly. Times of combat require decisive action and not consensus.
Jose,
I think you answered your own question.
Based on my research I don’t think that the style or components of good leadership should change during an economic crisis. In fact I think just the opposite is true.
During 9/11 people were scared and wanted to embrace any strong figure who could give them reassurance.
All people want three things; assurance that things are going to be okay, a hope for a getter tomorrow than today for themselves and their families and a roadmap on how to get there. Those are the things that authentic leaders provide both during good times and bad.
You’re going to love the new book…Hit The Ground Running – it’s all about the very question you asked.
—–
Jason Jennings; named one of the nation’s three most in-demand business speakers by USA TODAY. Read his latest bestseller Think Big Act Small from Penguin Putnam. In bookstores everywhere and available online at http://www.jason-jennings.com