The leader will have to be abreast of the ground level situation and have a close connect with employees & customers for an informed assessment
On an ongoing basis, the leader would need to reset priorities basis progress & manage resources very judiciously
Tough times are seen as instances of adversity, change, uncertainty & volatility–certainly the perfect recipe to test mettle of organizations and their leaders! Interestingly enough, if we were to look up the word ‘tough’ as explained in the dictionary, it means strong and durable, capable of great endurance; sturdy; hardy! If judiciously managed, this change could be the lever to greater efficiency, productivity and ultimately success. What we choose to make of ‘tough’ times then, could well be a matter of perspective!
Steering an organization in tough times, however, requires an approach that is different to managing growth. Tough times are best managed through Connect, Creativity, Communication & Execution.
Connect: At the outset, it is crucial for the leader to be conscious of the situation and what it presents. This is possible by developing a keen awareness of the external political, social, economic environment and its interlinkages locally as well as globally. The world has become much more integrated and the impact of situations in one part of the world is felt across the globe albeit in different ways. The downturn seen over the last six years has been testimony to the fact that the financial sector is certainly amongst the most sensitive to these global interlinkages.
Tough times are, of course, not only presented through the external environment. They could be limited to the organization itself, stemming from internal strategy and operations or most often, a combination of both. Grasping the nature, extent and possible short- and long-term impact of the situation in its entirety before actually being in the midst of the crisis thus makes all the difference!
The leader would need to consider the overall marketplace and all key players, followed by critically evaluating their own organization and the sources of its core challenges. Being abreast of the ground level situation and a close connect with employees and customers allows for an informed assessment. This also enables broader recognition of the extent to which the situation will impact their firm.
In concert with the top management, re-visiting the organization’s strategy would then be the imperative. Detailed ground level information would be necessary to do this. The management team would need to tap into sources such as employee, customer, stakeholder feedback and market perception. By being open and forthcoming about their intent of seeking information, the leader would be able to elicit genuine feedback. This will, of course, need to be coupled with the willingness to listen and accept difficult feedback as well! Tough situations thus present the opportunity for honest introspection!
Firms that have had the benefit of a rich legacy also build significant collective wisdom through shared experiences, which could be an invaluable source of perspective - especially if the challenges stem from situations such as business cycles. Leaders of organizations with global presence should also make the most of learning from their counterparts across the globe. While the shape or form of circumstances may change; the likelihood that some part of the organization would have gone through a similar situation or challenge over time would be high!
Creativity: The nature of the crisis will determine whether short-term adjustments or deeper structural changes would be required. As the top management plans for these, it would be important to keep in mind the overall vision and mission of the company. Any changes in operating strategy should continue to protect the firm’s core value proposition, while balancing the need of the hour with the long-term plan. The management team must also be cognizant that while the crisis could permanently alter the landscape they operate in, the symptoms themselves could change. Hence, the focus would have to be on addressing the causes rather than symptoms. In an ever-evolving world, the management would do well to build requisite agility into their strategy.
Also, while speed of decision-making would be crucial, the plan would need to be well thought through, detailed, holistic and credible; knee jerk reactions could do the firm and its stakeholders more harm than good.
In hindsight, some of the best techniques to optimize, restructure processes and reduce wastages have their origin in adverse business environments! While cutting back on costs and resources tends to be a natural reaction, there will be areas that will need continued investments in order to remain competitive when the growth phase returns. Leaders should certainly not lose sight of business opportunities that offer long-term strategic advantages.
Evaluating the organization structure in light of the realigned strategy and assessing if the right people are at the right jobs is a key step. It is well known that good times require good people and tough times require great people! Tough times may thus require making the right strategic hires to plug skill gaps that may exist in the organization, especially in light of realigned priorities.
Training and equipping people to deal with new expectations and requirements would be an important investment. Performance measures and reward mechanisms will also have to be reset, with significant focus on the right behaviors and collaboration.
Tough times can thus be leveraged through innovation!
Communication: While rolling out the strategy, the leader has to be honest, transparent & reflect reality. This would include acknowledging to employees that certain uncertainty exists. Large organizations tend to build history of how they manage tough times and employees are bound to rely upon their collective experiences, thus leaders will need to be cognizant of this to manage impact on employee morale.
The entire top management should be communicating with consistency and be viewed as united in their thoughts and actions. They should encourage two-way communication. Employees should be allowed to express their views and be part of the plan, thus building ownership. True transformation cannot be driven by a few people alone, making it essential to inspire broader buy-in. The leader’s role is to build confidence and motivate the organization by demonstrating a credible plan. If given the opportunity, employees most often will rise to the occasion & deliver their best to drive success.
Through this phase, leaders would also need to go out of their way to retain exceptional employees. At the same time, they must respect the choices of employees who are not able to align to changed circumstances & vision, choosing to move on. If handled well, these employees may even continue to be external ambassadors.
Through the course of transformation, sharing information with external stakeholders such as shareholders, customers and regulators would also be critical. They would appreciate candor and most often be willing to support organizations that involve them in tough times. Ensuring that employees and stakeholders are kept abreast of important developments will remain amongst the leader’s foremost priorities. They would not take kindly to finding out important information second-hand or from external sources!
Execution: Once the plan has been communicated and understood, it needs to be implemented with the requisite speed and sense of urgency. Also, some tough decisions would be inevitable; leaders will need to remain undeterred bringing single minded focus to executing the plan once decided. In order to ensure effective execution, a clear action plan with short-term goals is needed. Frequent reviews of progress will be required with mechanisms to ensure seamless information flow. The leader will also need to be a role model, demonstrating personal commitment to the actions required- being viewed as involved in the nitty-gritties would be just as important as creating the vision.
The leader wears multiple hats in tough times- those of critic, visionary, doer, follower, motivator, conscience keeper and many others! Ultimately, it will rest on their ability to find the path, instill confidence and mobilize people to make the most of what the situation presents.