Leadership in the current economy – CEO’s perspective

From Max’s Desk:

The economic crisis that has hit the world in the last two years will leave consequences in the way of doing business in the next ten years. It is a global crisis that has worsen the expectations in all the countries. Leaders are living difficult times no matter which industry they belong to. Before August 2007, CEOs were managing growth. They forgot the obstacles of what it means to manage a crisis. Leaders were not prepared because the world was meant to grow “forever”, artificially doped by finance. Not all has been bad though. Industries got back their importance and role and banks have learnt a lesson for the future. Those who will overcome the crisis will get stronger than they were before.

Leading in turbulent times is difficult for many reasons. Results are worse than expected (and in many cases abruptly negative) and tension is high throughout all kind of organizations. People work under stress. Tensions come from inside and outside also. All the stockholders of the companies are under the same pressure. Suppliers are afraid to lose clients who are approached by many substitutes and must give a better service for less money; banks are hit by the crisis and don’t give access to credit as they did before, clients are demanding better service with lower costs. As a result, competition is higher and margins much lower.

A leader has to give strong signals to the organization. First of all, the leader must get the big picture and has to read a complex situation inside and outside the company. The leader has to intervene inside the company with great motivation, always giving the impression of having the pulse of the situation and giving the directions to get out of the crisis. It’s important to be calm and not panic and, at the same time, motivate people to get out fast from this situation. It’s important to follow all the momentum with great attention and give stimulus to the people. Inside the company, nobody must think that the leader is not aware of the problems. The leader must provide the solutions and always indicate the roadmap to follow. Send positive signals and do not give importance to negative signals (that must always be foreseen).

In difficult times a leader must transmit awareness and assure the workers. People are crucial inside all organizations and they must be motivated and encouraged. A leader who is psychologically strong, impacts the result and work of the people. Show good results and don’t emphasize mistakes. Bring tranquility inside the company. A leader must adapt the strategy to the current situation but always keep it on the track for the long term strategy. Changing strategy with no reason would create confusion inside the organization and it’s the last thing needed in a company when things are going wrong. Consistency and positive moves are crucial in the way of success.