Maintaining Strong Leadership Through Tough Times

By Michael Wilkinson, CMF

Managing Director, Leadership Strategies

How does the role of leaders change in a down economy?

I want to relate an experience I had a couple of decades ago that taught me a valuable lesson about leadership in trouble times.  I was a senior manager at one of the large consulting firms.  The year before, a new office managing partner was named and, boy, was I impressed!  This guy really understood our needs, or so it seemed.  He brought a number of new innovations to the office which helped get everyone on the same page and working in a common direction. 

Here are just a few examples.

  • For the first time in my tenure with the firm, the partners and senior managers would meet for a monthly, half-day off-site planning session.  Being a consulting firm where billable hours were king, these half-day sessions would happen on Saturdays, followed by a golf outing or some other social activity to build the team.
  • Monthly, he would put out a message to all employees about the state of the office and how he saw our priorities.  He would also recognize outstanding efforts.
  • He focused on the long-term plan and the training needs of staff to lay the foundation for fulfilling that long term plan.

Of course these actions are standard leadership fare today.  However, at the time, especially for a consulting environment, I felt I had died and gone to consulting heaven…until the economy turned.  When this occurred, slowly, but surely, each one of the “new innovations” went away – without announcement and without fanfare.  They just stopped happening.

It took me several months to see the pattern.  So, not being the “keep your mouth shut and do your job” follower that makes for a long-term consulting career, I went to the managing partner and asked him about it.  I’ll never forget what he told me.

“Michael, in times of trouble, no one wants to hear depressing news.  So it is better to say nothing.”

That’s leadership in a down economy?  When times are tough, it’s best to say nothing. I had a different opinion than the managing partner’s, and I said so.  (And notice, I don’t work for a big consulting firm anymore.  Coincidence?)
When an organization is suffering from a down economy, this is indeed the time that people need to hear from their leaders the most.  Remember:  in the absence of information, many people will assume the worst.  So no information is often worse than negative information, as people will often assume that the situation is far worse than it actually is.

To leaders, we recommend the following during troubling economic times.

Have a game plan in advance … and communicate it.

  • At Leadership Strategies, our leadership team created two envelopes labeled “recession response stage 1” and “recession response stage 2”. 
  • The stage 1 envelope is opened if we grow less than 20% in three out of four months.  We have been growing quite rapidly and under 20% growth would be considered an unacceptable anomaly if it occurred frequently.
  • The stage 2 envelope is opened if we lose money in three out of four months.
  • Each envelope has a series of actions that we will take as an organization should the envelope be opened.
  • Everyone in our organization knows about the two envelopes and the actions that will be taken should the envelopes be opened.

Monitor progress … and communicate it.

  • At the beginning of June 2008, it appeared that we would have to open the first envelop at the end of the month because our growth rate – even with projected sales – would be under 5% in June.  This would make three months in a row below our 20% target.
  • The leadership team reported the status and the staff brainstormed strategies to avoid stage 1.
  • The entire company rallied and in 30 days we were able to have June achieve 37% growth to avoid the stage 1 envelope.  I have never been more proud of the way our company came together to achieve an end.

Seek to benefit from the crisis…and communicate it.

  • I had a chance to have a conversation recently with Bob Wise, the former Governor of West Virginia, and current President of Alliance for Excellent Education.  A comment he made has stuck with me, “Never waste a good crisis.”
  • His point was that a crisis is an opportunity for you to address issues that have been allowed to linger (e.g., poor customer service, ineffective product development methods, wrong person in the wrong seat, wasteful practices) and become laser focused on what is most important.
  • Consider getting everyone involved in developing and implementing strategies that will help the organization survive the crisis and thrive in the aftermath.

In case you hadn’t notice, we highly recommend that, whatever steps you take, you make it a point to increase communication during time of crisis to ensure awareness of what is being done and to empower people to be part of the solution.

About the Author

Michael Wilkinson is the Managing Director of Leadership Strategies – The Facilitation Company, and a much sought after trainer, facilitator and speaker. He is a Certified Master Facilitator and a Certified Professional Facilitator. As a past president of the Southeast Association of Facilitators and a board member of the National Institute of Facilitation, Michael is a national leader in the facilitation industry. You can get more tips from either of Michael's books, The Secrets of Facilitation or The Secrets to Masterful Meetings. You can receive a signed copy through our website.

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