Are You the Right Person to Lead in a Bad Economy?
February 17, 2010
Do your people have their resumes ready? Are your people waiting for the economy to change so they can leave? Consider this email I recently received…
“This company needs your help so badly it is beyond your imagination. It wouldn’t happen because the faults come from the very top...One way you can help me is let me know if you hear of any needs for my experience in the market and I will be glad to send out my resume, which is ready. Thank you my friend for always being there for me every time I call on you.”
Even in good economic times, it’s challenging to be a boss, let alone a leader. During a difficult economy like the recession we are now experiencing my sense is there is much fear in many organizations. Fear of job loss, increasing taxes, loss of home equity, rising medical costs, etc., is pervasive in this economy. This type of fear translates into a loss of personal productivity.
When fear is prevalent in an organization, whether it is coming from the top or the environment, people will protect themselves from loss. Fear of loss is a more powerful motivator than the desire for gain. Research shows that most people put in just enough effort to keep from losing their jobs. Fear destroys productivity.
Research shows that people in positions of authority often become less sensitive to others’ feelings and needs. These leaders are so concerned about their company’s results they will tend to abuse people without realizing it. Their coworkers will then devote immense energies watching their environment and interpreting the actions of these leaders instead of focusing on increasing productivity. So what happens when the recession ends and a job-producing recovery really begins? Companies will suffer a tsunami-like wave of employee defection. Are your people preparing their resumes?
A recent Fortune magazine article stated the primary reason a leader fails is insensitivity to people. How sensitive are you? What would your people say? Yes, you have to make tough decisions in order for the business to survive. But every decision you make may affect the productivity of your people. As a boss, isn’t that how you are judged?
Another article, titled “How to Be a Good Boss in a Bad Economy,” by Stanford professor Robert Sutton in the Harvard Business Review, provides a useful framework to get bosses focused on what their constituents need from them most. According to the article, in situations where people feel threatened and fear is abundant, a good boss finds ways to provide more predictability, understanding, control and compassion. Let’s look closer at these terms.
Predictability: Information is critical. A significant reason people become dissatisfied with their jobs is not knowing what’s going on or being left in the dark. Some call that mushroom management. (How do you grow mushrooms? Keep them in the dark and feed them a bunch of horse manure.)
Give your people as much information as possible. Without substantial information, people will use their imaginations to create their interpretations of the future. Imaginations are used to create and innovate, but they can also make people worry. Worry is the misuse of the imagination.
Dictating to employees your anticipations about what will happen in the future will reduce their potential suffering. They will and can relax in the short-term. A key way to alleviate worry and get on with daily events is to accept the worst possible scenario. That acceptance helps with the stresses in the moment. Then, when perceived reality matches expectations, a sense of control is achieved and a form of equilibrium is generated.
Remember the expectations projected by Winston Churchill? “We are in the preliminary stage of one of the greatest battles in history…I have nothing to offer but blood, toil, tears and sweat.
“We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering... You ask, what is our aim? I can answer in one word: It is victory, victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival. …And I say, ‘Come then, let us go forward together with our united strength.’” Those articulated expectations allowed the British people to go forward when the air raid sirens were silent.
Understanding: Helping your employees understand why something needs to be done or how it will affect them empowers them. Knowing why we need to learn a skill is the first key to adult learning. Remember how frustrated you felt when your parents responded to your inquiry on why you needed to do something? “Because I said so” just doesn’t cut it. Make it a habit to tell people the why of their actions and those of the company.
Control: People have a strong psychological need for control. The most significant cause of stress is the feeling of being out of control. Don’t frame an obstacle as too big or too difficult to overcome. They will become overwhelmed and freeze like deer in the headlights. Show your constituents how to break large overwhelming tasks into small manageable actions. How do you eat an elephant? “One bite at a time.”
Compassion: Nothing connects more and softens suffering as much as understanding. It is the power of empathy. Empathy is the root of compassion, and the most powerful human relationship tool.
When you tend to the emotional needs of the people who lose their job, you help them preserve their dignity. It is easy to take dignity away from people, but difficult to give it to them. Dignity is essential for those facing the job market along with those that survive the cuts. Demeaning those who have left the workplace will demoralize those that stay and drive your best employees to jump ship. Give dignity to those who have left, for it will create dignity for those who stay.
Consider this story from years ago when I was traveling in Haiti: During a sightseeing excursion my tour bus stopped at a shopping area with entrepreneurs trying to sell their wares. I fell in love with a carved mahogany head. Being proud of my negotiating skills, I worked hard at extracting a very low price. Finally, in desperation, the Haitian entrepreneur looked at me and said, “Hey, mister, have a heart.”
Great companies and leaders have hearts. They tend to the emotional needs of their people. Would a company with heart discharge people two weeks before the holidays? Would a company with heart bad-mouth former employees? Would a company with heart take away the dignity of people who are suffering?
Capitalism can be heartless, but we don’t have to be. During overwhelming times, a good boss finds ways to build morale, build people up and alleviate fear. A good boss has heart.