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Stormy waters: Leading in a downturn

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Leadership in stormy watersLeadership in turbulent times is not only a challenge but a real test of mental toughness. Annie Hayes looks at HR’s role in equipping its leaders with the skills to beat the downturn.


Jackie Orme, the new chief executive of the Chartered Institute of Personnel and Development (CIPD), believes that leadership is as much about process and manner as it is about what is done. Speaking at the CIPD’s annual conference this autumn, she told delegates: “In my experience, leadership is becoming more values driven. It isn’t just about what you do – how you do it is becoming more important in today’s environment.”

Those values need to move towards emotional intelligence and resonance, according to Annie McKee, author and co-founder of the Teleos Leadership Institute. Yet McKee adds that leadership is already facing problems, because whilst it is shifting in the right direction – towards values and emotional intelligence – resonance is still “common sense but not common practice”, she explains, laying the blame at the door of operating on false assumptions about what it means to be a great leader.

Cognitive science professor Richard Boyatzis agrees and says that part of the problem is that 70-80% of people in management jobs are just not adding value. So what does it mean to add value and which leadership traits are required in hard times?

Courageous leadership

Simon Mitchell, director for DDI, the business leadership consultancy, says that leaders are confronted with a paradox: “On the one hand they’re being required to be innovative to compete on a global basis, and on the other hand they need to keep costs down.” It’s a dilemma that is leaving many managers feeling not only confused but bewildered.

“It’s easy to respond in a knee-jerk fashion but you’ve got to keep the long-term view too with the ability to think flexibly.”

Professor Sharon Turnbull, Centre for Applied Leadership Research

It’s the battle between a focus on short-term survival and long-term planning and, according to Mitchell, leaders need to react on a ‘real-time basis’: “They have to realise that the reality of business six months ago is very different to today. All leaders are in a transitional period at the moment.”

Yet Professor Sharon Turnbull, director of the Centre for Applied Leadership Research at The Leadership Trust, says it’s more complex than just focusing on the month ahead: “It’s easy to respond in a knee-jerk fashion but you’ve got to keep the long-term view too with the ability to think flexibly.”

Turnbull admits it can be difficult: “At times it may feel counter-intuitive but if we look at examples from across the globe we can see that in Asian businesses they are very good at keeping the longer-term outlook whilst being flexible and agile in the short-term.”

It’s the type of courageous leadership that Octavius Black, founder of the Mind Gym, refers to with his seven key heads of courageous leadership. Black points to some key examples. The first illustrates authenticity, an attribute that can be attractive, he says: “I’m thinking of Ryanair boss Michael O’Leary, who, responding to claims about poor customer service at the airline replied, ‘what do you expect for a £10 ticket?’

Humility also plays its part, he adds: “Those who tend to be more humble tend to be more successful.” Hope is in third position, something of which McKee and Boyatzis lay their faith in too. Next on the list is persistence, followed by bravery, vitality and, last but not least, curiosity, the essence of generating original and ingenious solutions.

“Turbulent times call for a different kind of leadership: courageous leadership. Most of our leaders were graduate trainees the last time the economic clouds looked this dark. The skills that have worked for growth are very different from those needed to steer our organisations through the storm ahead,” says Black.

Mitchell adds integrity to the list and says that leaders must be equipped to make tough choices. Yet, according to Turnbull, all these requirements shouldn’t just emanate from the chief – she says that leaders should be present at all levels: “The important things is that leadership is spread across a number of people – a single leader is not going to work. We need to build a leadership culture across organisations.”

The best functioning teams, according to Turnbull, are the ones where everyone considers themselves to be a leader whilst at the same time appreciating what their best contribution can be.

So how can HR equip not only those at the top but those integral to decision-making with the skills to react appropriately and lead from the front?

HR’s role

“HR needs to help leaders build new networks whilst at the same time looking at the gaps that exist in the company.”

Simon Mitchell, DDI

According to Mitchell, HR is being presented with the “best chance to show its worth” for a long time. HR’s role begins with an understanding of what causes leadership to fail, he says, adding that the function should focus on steering leaders through the transition: “HR needs to help leaders build new networks whilst at the same time looking at the gaps that exist in the company. Many organisations are facing a recruitment freeze – some roles are going unfilled – HR is in a perfect position to look at the strengths of people within the company and take that knowledge to the board to give their insight on where spending should be made.”

It’s the perfect opportunity for HR to be truly aligned with the business as a strategic partner, says Mitchell.

For Turnbull, HR is the agent of change. “They can help leaders to build flexibility and instil a sense of leadership so that they can connect up the organisation. HR also needs to look at the long-term vision,” she says. So which companies are weathering the storm well?

What companies are doing

Turnbull is seeing a number of big, global companies that are investing more than ever in their leaders: “They’ve realised from previous recessions that you can’t stop investing and thinking about your people.”

Where companies are failing, according to Turnbull, it’s often the result of too much ‘passivity’ lower down the scale and where fewer opportunities are presented for everyone to be creative.

Mitchell says it’s a mixed picture with some financial services companies bucking the trend and doing really well and some creative industries, where the structures are flatter, having to let people go: “What is critical is understanding where the company is going and needs to go. Some are not reacting quickly enough.”

Leadership in troubled times presents incredible challenges. Whilst one in three leaders fails in a buoyant market, the stakes are now much higher and a daily struggle exists between short-term fire-fighting and survival and planning for organisational success on the other side of the downturn. Experts point to different solutions but what is certain is that these times call for courage, fortitude and creativity – those that can adapt to the changing circumstances stand a better chance.

One Response

  1. Meaning and Opportunity
    I liked the thoughts in this article. A couple of additional thoughts…..Some people rely on their organisation to help them create meaning from the world around them. When an organisation hits bad times – either Financially in the private sector or for other causes – e.g. Haringay LA, the leaders need to continue to help staff – and other stakeholders – understand what is going on, and how the organisation perceives the changes in its environment, and what it is going to do about it. Ideally, they would also articulate how each individual member of staff can help.
    Also, even in the most dire of economic and other circumstances, leaders need to remember that for those that survive in the organisation, that sense of future opportunity, that sense of possibilities for the future, needs to be nurtured. A mature HR contribution should help with these 2 issues – whilst dealing with all the “soot” that will need to be handled!!

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