Most CEOs are revising downward their forecasts for business, though they remain reluctant for the moment to declare a recession is at hand. Within the current administration, and in congress, there is broad disagreement about what to do to head it off. This uncertainty is wreaking havoc on business planning. Chief Executive reported in June that 300 CEOs downgraded business forecasts for the next 12 months to 5.6 out of 10. CEOs are telling their people to prepare recession plans.
At the start of the 2020 pandemic, we also lacked foresight to imagine the dramatic swings in the fortunes of companies. There were big winners like technology, retail, financial services, and home entertainment; there were big losers like travel and tourism, hospitality, and energy. The massive shifts in the global business landscape rendered strategic plans out of date and useless.
So, what now? How do we navigate the next big, bad thing?
In 20 years of advising CEOs and senior executives on strategy execution, we’ve learned that during crisis, some teams rise to the occasion, while others are less resilient and more susceptible to doubt, which prompts reaction in the moment and can foster a chaotic sense of doom. While there are winners and losers in industry sectors, it is also true that some defy the odds, look around corners, seize opportunities, and keep steady hands at the wheel.
What kind of leaders weather tough times?
Through a review of our data on leaders and teams, we’ve discovered that inevitably there are qualities of both that drive growth and innovation, even in the most challenging times. These qualities are not always intuitive. In fact, in shorter supply your team is stretched thin, exhausted, and too busy to stop the whack-a-mole game to think clearly and provide direction to others. What do these leaders and their teams do right?
They tap into the stabilizing power of composure and restraint
Leaders who demonstrate a high level of composure and restraint in challenging times create an environment where it is safe to make mistakes, and to tell others when things are not working. Leaders are then able to foster discussion in a calm environment and resolve small issues before they become bigger ones. These leaders get a read on the fast-changing environment and quickly problem-solve with colleagues.
They dial up their antennae of awareness and concern
Awareness and concern are two additional qualities that go hand-in-hand in times of change and uncertainty. As people struggle to navigate the pressures and volatility, it’s more important than ever to know what your team is thinking and feeling, and to be aware of the pulse of the organization. If a downturn is ahead, you may be glad that not every position post-Pandemic is filled. However, the reality for most companies is that their best talent is most at risk and likely to leave. Staying aware helps you shore up your best defense against threats to growth.
They ramp up their curiosity and interactivity
These are two leadership qualities that work together beautifully when you need to solve problems. During challenging times, many leaders turn inward to try to shoulder the burden of solving problems with a ready-fire-aim approach. They hear about an issue and move immediately into action. They may ask for input, but not in group settings. Thus, they put spokes in wheels and their best people are talking only to them; not to one another.
It may feel counterintuitive, but when you can be intentionally curious and convene smart people, you learn that they can solve the problem better and faster than you can. Because they’ve authored the solution, they claim ownership of it and put all their energy behind it. As you move through uncertainty, they begin to feel more confident of their own agency in managing turbulence. As Ken Blanchard once said, “All of us are smarter than any of us.”
They focus on unleashing the capabilities of their interdependent, interconnected teams
Virtual and hybrid work have already laid bare the hidden, destructive issues that can derail relationships and teams. Teams that had less face time and more conflict found the challenge of misunderstanding and unresolved conflict even greater. It isn’t only each team but your network of teams, and how they operate together, that makes your organization resilient.
The performance of teams is vastly more important to the future of work than individual performance. Teams are really the new heroes of organizations. When you see unresolved conflict between teams, you can diagnose, with absolute certainty, the role that the friction is playing in creating drag. As you try to pivot in a recession, it’s time to prioritize how teams in your organization are actively engaging with one another, aligning on the goals, and working with enterprise focus.
Our research on teams has found that in challenging times, trust, support, candor, and curiosity lay the foundation of team culture. Make it a priority to bring people together and resolve trust issues by encouraging candor and looking for solutions. Do this by first being curious yourself, and then encouraging others on your team to seek to understand. Take the time now to ensure that your teams are performing at their best, and you’ll reap the rewards today and well beyond any recession or downturn.
I remember a CEO that I know telling the story of the commitment he made to retain all of his employees during a downturn, even though he predicted a 20% revenue loss in the first year. That decision, while risky, turned out to be fortuitous, as the economy pivoted and demand soared long before expected. Competitors who had let go of employees struggled, while this company recovered quickly and remains above capacity today.
The decision he made was informed by the values and qualities of leadership that defined this company’s culture. The CEO led by example, demonstrating composure and restraint that others modeled. They spent time talking with their employees about the decisions that they were making and why. They demonstrated concern for their well-being when demand picked up and they were under pressure to deliver.
Take a lesson from this CEO and what we’ve learned about leadership and teams. Keep these three approaches in mind as you move forward:
- Stay focused on what works – good leadership will get you through.
- Double down on your people and your teams – listen, learn, respond, and invest to make sure they have the knowledge, support, and tools to do their best.
- Bring your leaders and teams together to navigate the uncertainty together – forget being a hero and instead draw in your organization to collaborate, cooperate, and invent the future – you will all be stronger as a result.
As the next months unfold, we can all prepare to be better leaders by reflecting on what we already know about leading in uncertain times. Think about what worked and didn’t work over the last two years. Ask yourself: what is the lesson and how can we apply it now?