Developing Leaders and Organizations for Breakthrough Results
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"Setting himself apart from so many in his field, Doug is skilled at moving senior leaders to action with a sense of urgency and clarity. He is able to understand and shift business and cultural dynamics with the immediacy of delivering results 'now'. He guided a collection of disparate yet talented senior executives to a breakthrough in embracing our responsibilities to leverage our talents as a team... "

Eileen Sweeney
HR VP Global Operations

The Challenge of Leading in Times of Uncertainty and Change: Balancing Leadership and Management Priorities

The challenges of leading effectively during the past year have been well documented in articles, books and the business media. What we’ve heard is that very few leaders are prepared to lead in the context of significant, unrelenting change. Far too often, these circumstances set up in leaders a struggle between managing the business and addressing the needs of employees. Often, it is the needs of the employees and the senior team that suffers. Leaders are seriously distracted. Caught between demanding customers, hoarding cash, cutting costs and vaporizing value, senior leaders understandably find it hard to focus on the needs of their staff. I’ve observed this dichotomy between managing and leading many times over the years, but never so frequently or clearly as I have during the difficult year that we’ve just experienced. A CEO I’m working with as I write this recently admitted that most of his traditional people management and leadership practices had been sacrificed during 2009 while he almost frenetically travelled around the world meeting with customers, cutting costs and initiating down sizing projects. He failed to set aside time to connect with his staff in a personal and authentic way, failed to do the annual performance review and had very few team meetings. He now regrets his choices and has asked me to help him regain the trust, commitment and collaboration that existed prior to the frenzy of 2009.

If leaders don’t establish an effective balance between the management and business priorities and the people-related priorities, they can destabilize the organizational culture and erode trust, commitment and loyalty. This can only lead to fear, anxiety and frustration among employees at a time when a committed, productive and engaged workforce is the most important ingredient for success. This situation is made even more important when we consider the findings of the cutting-edge research done by the people at the Center for Work Life Policy’s Hidden Brain Drain Task Force (which comprises fifty of the world’s most powerful corporations including GE, Goldman Sachs, J&J and Unilever) reveals the danger in conventional assumptions about sustaining high performance in tough times. One of this group’s recent studies found that in the wake of a layoff, voluntary attrition can be deeper than the layoff itself. A recent University of Wisconsin study found that 31 percent of survivors walk out the door in the wake of a layoff and 24 percent of those left spend most of their time actively looking for another job. The layoff survivors report feeling disengaged and in the Hidden Brain Drain study 74 percent felt paralyzed, 73 percent demoralized and 64 percent demotivated. A pretty dreadful scene for a leader who is putting aside many of the fundamental people management and leadership practices in order to dedicate his/her complete time and energy to the management tasks like cost cutting, customer retention and sales. Unfortunately, it’s the standout performers who always have options, even in tough times. These stars departure leaves a dark void. Leaders simply cannot afford to ignore the psychological and professional needs of the employees . . . especially the key contributors.

There is no doubt that the pressure is on leaders to rise above the pull to focus exclusively on business imperatives. How do leaders address the people and talent priorities in these uncertain times without jeopardizing the business imperatives? First of all they must realize that they are the most important factor in rallying the troops to help execute the very business priorities that are needed to keep the business on track. As Jay Conger, the Kravitz Professor of Leadership at Claremont McKenna College and author of The Practice of Leadership: Developing the Next Generation of Leaders, points out , “The largest predictor of whether someone will stay with a company is their satisfaction with their immediate boss.” This relationship is confirmed by a recent study conducted by the Corporate Leadership Council in which they found that the quality of the relationship that “high values employees” have with the immediate manager is the single most important factor in whether they will stay with a company or leave. This relationship was found to be more important than base salary or incentive compensation or any other of ten retention variables.

Employees are looking for inspiration, guidance, support and direction during these times. Most understand that their manager cannot offer advancement, merit increases or other forms of compensation. But what so many managers fail to realize is that they have many other levers available to them that can motivate employees and keep them calm, focused and engaged. Relying on those other levers will cost the company nothing, but may have huge value to the employees.

Leaders must figure out which of the tools, benefits and actions matter most to their people. Boris Groysberg who is an Associate Professor of Organizational Behavior at Harvard Business School suggests that leaders “find levers where the value to the individual is greater than the cost to the company.” Some of the tools that fall into that category are the following:

  1. Praise for good work: This is one of the most inexpensive and dramatically underused motivational levers available to leaders. Jay Conger writes that, “There is a praise deficit in almost all companies.” Most leaders know that praise and positive feedback can go a long way in demonstrating to top performers that you care for them and value their work and contribution, yet is vastly underutilized.
  2. Non-monetary perks: There are a number of perks that cost very little to provide such as flexibility, better work/life balance or more autonomy. Conger says that, “companies tend to become more controlling in tough times and it’s important to counter that tendency.” Ask your employees what matters most to them and then provide it. Make sure that the perk is tailored to each employee because what works for one person may not be motivating to the next.
  3. Over-communicate: Open communication with employees is crucial. In tough, challenging, or uncertain times, leaders should over-communicate to help alleviate fear and anxiety. Transparency about the company’s situation and outlook for the future is critical. The more you share information the more buy-in you have. Describing how the company is going to get to a future state in a realistic manner and candor about the challenges can help overcome this fear and concern. Communicate relentlessly and listen to what your people are saying, thinking and feeling.
  4. Be authentic and build trust: Build on the findings of research done at the Center for Creative leadership in which they found that leaders who focus on establishing trust are better able to deal with both structural and financial changes as well as the human and emotional side of change, crisis and uncertainty.
  5. Show optimism: See the positive potential of any challenge or change and convey that optimism to others. Having a sense of history and realizing that the sun will shine tomorrow and helping staff believe in themselves is extremely important.
  6. Be empathetic: Focus on taking others’ perspectives into account and put time and energy into understanding the impact that your actions, behaviors and decisions have on others. Leaders must be tough enough to make difficult decisions that serve crucial business needs, but need to make these decisions with sensitivity to their impact on others. Letting their “soft side” show is not an act of weakness, but can create a human connection with employees and contribute to a sense of trust and commitment.
  7. As a leader, you often cannot control the corporate culture, especially at a large company. However, your actions and interactions with your employees contribute to the larger culture and more importantly, you create authentic relationships that have the potential of being far more important to them than the larger culture. Leaders must not lose sight of the fact that satisfaction with their immediate boss is the most important reason that employees stay with a company and that trumps the negative impact of the larger culture every time.