Profits are down. Your top competitor just launched an exciting new product, to which your formerly loyal customers are now flocking. Your share price is spiraling downward. Everyone’s looking to you for answers. Now’s NOT the time to panic!
But do you? How well do leaders avoid overreacting to short-term downturns, and how do they make bold, decisive moves before the situation becomes dire?
Without a doubt, the past four years have been challenging ones across every industry and economy. We’ve seen historic collapses in key sectors of the economy, the automobile industry and banking merely the most prominent amongst them. Constant and increasingly rapid change, belt-tightening, hiring slowdowns…all of these have become staples of modern business.
It’s tough not to panic! And not surprisingly, most leaders profess success at avoiding this type of reaction. Yet, dipping employee morale and more subtle indicators of pressure and tension tell a different story.
When we think of panicked reactions, what types of behavior come to mind? The hyper-reactionary boss, quick with his temper and proclivity toward micromanagement in times of stress…the supervisor who increasingly shields herself from interactions with staff, afraid of the lack of answers she has for their perceptive and pointed questions…the manager who reverts to a “they should be happy to even have a job” style of personnel mismanagement.
As leaders, these examples are surely ones we’d like to avoid. And, quite honestly, most leaders DO sidestep these stereotypes, precisely because they are recognized as indicators of panic. Unfortunately, the more subtle indicators of panic are harder to recognize and avoid. These include:
Unwillingness to Challenge the Status Quo
Let’s face it, when things aren’t going well, it’s sometime tough to encourage innovation. The irony is that it’s usually only though innovative leaders and decision making that improvement is possible. Rather than attempting “out of the box” thinking, too often leaders under stress fall back on the “known” way of doing things. This is the opposite of what is needed!
Overreliance on Positive Data
In my coaching, I’ve noticed that one of the most difficult skills for many leaders is to truly understand and keep a critical nature toward data. Data is too frequently used to justify decisions, instead of being the basis for those decisions. And when results are lacking, many leader tend to grab onto only the positive data, or better put, the positively “spun” data. This behavior simply breeds more failure!
Tendency to Focus on “Quick Wins”
Within any project, celebrating early successes is important. But when leaders focus attention solely on “quick wins,” to the detriment of longer-term decision making and direction, they undermine an organization’s ability to remain proactive and strategic. Tackling “low-hanging fruit” is great, so long as it’s not to simply create the impression of larger success or to mask the organizational struggles altogether.
Mistaking Leadership Issues for Process Issues
Most modern organizations exist in a constant cycle of process improvement. That’s not a bad thing. But when the response to challenges is to immediately point to the need to change or examine processes (that were presumably developed with some sense of logic and purpose), it’s oftentimes merely smoke and mirrors hiding larger leadership issues. In reality, I’d say that more than half of all the “process interventions” I’ve been asked to make in the past decade have instead been leadership issues. In times of stress and economic struggle, this tendency to assume the problem is process is only enhanced.
The long and the short of it is this…if your organization is experiencing significant challenges, pay attention to the more subtle indicators of leadership panic in your ranks. Recognize where these reactions exist and proactively address them together as a leadership team. Only by doing that can you hope to provide the strong, innovative leadership needed to navigate your way to calmer financial waters.