When an organization runs into bad times, its leader is the worst hit because all eyes rivet on him to right what is wrong. The investors demand returns on their investments, not excuses; employees expect regular salary, not apologies; suppliers want their payment, not explanations. So, the message to the leader is clear “get the situation changed or get changed.” This either overwhelms a leader and throws him into a reflexive mode or challenges him and makes him reflective.
When leaders switch to the reflexive mode, they go into self-preservation; they are not as bothered about saving their organizations as they are about saving themselves. They are unable to think properly, hence many who fall into this mode act like an undertaker who scavenges what he can and scrams, leaving the critical stakeholders to count their losses. Reflexive leaders are sub-optimal because they do not optimize their potential and neither do they lead their organizations or the people to do same.
But leaders who are reflective in bad times have their eyes on taking the organization out of the storm and make it a better entity. They shift their focus away from self to the organization; they galvanize the people, mobilize resources and initiate strategies that eventually turn the tide in favour of the organization. They do not relent until they achieve their desired end.
Why great leaders thrive in bad times
The edge that great leaders have over sub-optimal ones is that they have an understanding that bad times are a consequence of actions taken in good times just as good times are a result of activities in bad times. The import of this is that bad times do not last. If properly managed, the end result of every bad time is the return of good times. While sub-optimal leaders throw up their hands in surrender because they do not understand this age-long principle, great leaders stay on course and deploy their ingenuity to bear on the situation.
Great leaders are encouraged to toe this line because they know that leaders are change agents. They also know that the effect of change is magnified more in bad times than in good times. Therefore, they know that the little efforts they apply in bad times have maximum effect. So, they do not relent until they achieve their mission.
Outstanding leaders equate themselves with salt in their organization. One of the basic functions of salt is to arrest decay. Hence, they are determined to see the end of the bad time. This motivates them to tweak the system, juggle the operations or alter the strategies until they are able to stop the drift.
Great leaders’ mentality
What drives leaders to accomplish what is seemingly impossible is their firm belief that there is always a way out of every difficult situation. Having settled that, they know that their responsibility as the leader is either to find the way or provide the enabling environment that would facilitate their colleagues to do so. As a result of this, neither the difficulty of the situation nor its complexity perplexes them. They are resolute in their mind that they will find a way out of it and they do eventually.
On the contrary, sub-optimal leaders’ belief is that the difficult situation has run a ring around them and it is impossible to get out of it. So, rather than get down to work with a view to finding a solution to the problem, they resort to blame-game; they blame the people, the government, the technology, the market, the economy, the banks, the creditors and the competition. But none of that gets the problem solved. What move away the mountain are well thought-out actions, not blame, anger or hope. Newton’s first law of motion states that a body at rest will remain in that state until an outside force acts on it. The implication of this is that without a change of action or strategy, there can’t be a change in experience. Great leaders understand this and deploy it to their advantage.
What leaders do in bad times
To change the tide when the times are rough, leaders take some steps.
How leaders behave in bad times goes a long way to determine the bad times’ span because their behaviour has a great impact on their people and what they do as well as believe. Difficult times can be a time of confusion or panic for others but certainly not the leader. If he stays calm in spite of the pressure on him, he sends a message to everyone that the situation is under control. And they are able to concentrate on collectively salvaging the situation rather than running helter-skelter.
Another effect of the leader being calm in difficult times is that he is able to take rational decisions instead of trying to get quick-fixes. When a leader allows himself to sink into confusion in the time of crises, even the most ludicrous counsel has a ring of ingenuity. That was the case with the management of Coca Cola in 1985.
The New Coke misadventure
Pepsi was fast eating into Coca Cola market share when Roger Enrico held sway as PepsiCo Chairman. Enrico deployed a marketing strategy that made Pepsi attractive to youths and almost turned the product into a pop-culture through sponsorship deals with mega stars like Michael Jackson and Madonna. So much was the popularity of Pepsi among critical market sectors that by 1985 its share of the cola market had reached an unprecedented 30 per cent, according to the Wall Street Journal. Pepsi’s success threw Coca Cola leadership into panic. They thought of ways of countering Pepsi’s rise and on April 25, 1985, came up with a sweeter version of the iconic Coke which was called the New Coke. But consumers spurned the product because it was not “their Coke” as the new product tasted more like Pepsi. Despite the huge fortune that had been sunk into the development and marketing of the product, it did not make any headway in the market. The management of Coca Cola had to reintroduce the Classic Coke to regain its market share. The New Coke was renamed Coke II but that didn’t work either. New Coke and Coke II eventually petered out.
When leaders switch to panic mode, they slide from the sublime to the ridiculous.
Motivate the people
During tough times, it is not unlikely for the morale of workers to go down. What would be paramount in the minds of many is what would happen to them should the situation get worse. They worry about whether they would be laid off or not. If laid off, how soon would they be able to get another job? How would their joblessness affect the fortune of their dependants? So, many employees would be in the fight or flight mode which would negatively impact on their productivity and consequently lengthen the company’s stay in the murky waters. To avert such situation, the leader must step out to inspire the workforce and save them from despair. The leader has to be truthful about the situation but should also instill optimism in them by telling them the steps being taken to redress the situation. When employees are left to their imagination during crisis, they imagine the worst and are petrified into low productivity. But when a workforce is inspired, even the most difficult tasks are turned into a piece of cake.
Focus on what you can control
Bad times are precipitated by different factors some of which can be controlled by the leader while he is unable to do anything about others. What to do to exit bad times is to focus on the factors that he can control. The business leader does not have any control over government policies, the economy, natural disasters or the operations of the competition. If he makes any of these his focus, he will be frustrated and land in the throes of incapacitation. Consequently, he would be unable to do what is required to turn the tide in his favour. So, rather than worry about what is beyond your control, focus on what you are able to control such as your operation, marketing, pricing and customer relations.
In difficult times, it is best for an organization to do more of what gives it the highest returns. A bad time is not the time to try everything, instead it is time to apply the Pareto Principle and concentrate on activities with far-reaching effects. According to Vilfredo Pareto, proponent of the principle, 80 per cent of the effects come from 20 per cent of the causes. When applied to business, 80 per cent of sales come from 20 per cent of the products. In the same vein, 80 per cent of sales come from 20 per cent of clients. So, to get great value in trying times, it is best to concentrate on those activities and those clients that give the highest value so as to accelerate the rate of recovery.
Look for new opportunities
Every difficult time throws up new opportunities but only those who have not allowed themselves to be sucked in by the difficult times see these. So, one of the critical things that leaders do is to deliberately look for new opportunities and seize them. They do this by looking at the advantages in the changing situations and new developments and consider how they can turn these around for the good of their organizations.
While adversity is the nemesis of sub-optimal leaders, great leaders convert same to a ladder to get higher.