LTFocus
Winter 2008/9
Leading in Recession
Jack Perry
Chief Executive of Scottish Enterprise:
Right from the first
Leadership during turbulent times:
Collaboration or
cheerleader-in-chief?
Crisis, what crisis:
Effective leadership traits
in recession
Latest in Leadership
Cycles and phases of
trouble
Every generation looks back to what
they thought were less turbulent and
troubled times. The 1980s look to many
to have been a quiet, stable time
marked certainly by a little, but not a lot
of change, division and strife. During
that period people even looked back to
the 1960s, remembering only hippies
and flower power and not Vietnam; the
marches and the sit-ins. Even people in
the peaceful 1950s looked back while
their world was threatened by the
Korean war, the Suez Crisis and decolonialisation, to what they
remembered as a golden, peaceful
period of stability.
and, if they have it, R & D. Making an error on easy cuts that turn out to be
essential here has cost many organisations dearly. Cost cutting leads not to
recovery but demise.
The past is always portrayed as more
orderly, stable and predictable than the
present. This is as true in business as
elsewhere. We seem very conscious of
instability and changes in our current
situation believing that we, now, live in
especially turbulent times. The wish, “May
you live in interesting times”, can easily be
read as, “Oh dear, we seem to be living in
turbulent and troubled times”.
Vicious and virtuous cycles
budgets on things they think less essential.
Favourite targets are recruitment and
training, then advertising and marketing,
However, the concept of vicious and virtuous cycles is well known. The idea is
that in bad times people get worried. Managers take their eye off the ball or
retreat into crisis group meetings. Workers too worry and may be ill, bad
When the chips are down senior executives fear ‘mean’ early retirement
packages and communication, of all sorts, changes. Some senior managers hide
or go silent. The PR machine either goes into overdrive or itself is cut. The
organisation may suddenly become the focus of press interest which may not be
welcome. There are soon announcements of general ‘belt tightening’ policies.
Pension schemes are closed, budgets slashed, people are not replaced.
Ordinary people, indeed those at all levels, begin to get worried even frightened.
Many are concerned they will be made redundant and whether the organisation
will have a LIFO or FIFO policy (Last/First in, First out). Many get concerned about
wage freezes co-occurring with mortgage payment increases as well as the
sudden and difficult-to-manage increase in the cost of living. Those working on a
hourly basis see a reduction in their hours.
Those made redundant or even moved to a new position often experience a well
known shock cycle. There are many versions of this cycle or stage theory based
on death and dying literature. There are different, but related concepts or stages
such as:
• Shock stage: initial paralysis at hearing the bad news
• Denial stage: trying to avoid the inevitable
• Anger stage: frustrated outpouring of bottled-up emotion
• Bargaining stage: seeking in vain for a way out
Assuming that the speed of change is
• Depression stage: final realisation of the inevitable
indeed increasing, and the world is
• Testing stage: seeking realistic solutions
becoming more difficult and complex, what
does this mean for people at work? Does it
• Acceptance stage: finally finding the way forward.
mean a Darwinian shake-up with the fittest
Others have opted for a simpler three point construction:
surviving? Does it mean a massive increase
• Numbness: mechanical functioning and social isolation
in work and life stress and all the
associated problems that go with that?
• Disorganisation: intensely painful feelings of loss
Does it provide powerful and important
• Reorganisation: re-entry into a more ‘normal’ social life.
lessons for companies and their managers
to manage better?
There are a number of caveats with the cycle or stage theory approach. It is not
Economic and organisational crises can lead clear if people go through all the stages in a set order or whether they may skip
to dramatic changes at work. Many activities some or get stuck in others. It is not certain what makes people ‘move on’ from
cease. Some organisations freeze, then cut one stage to the next.
2 LTFocus
tempered, and pick fights with others. The ambiguity and the
uncertainty is experienced almost exclusively as a threat.
Threats lead to poor job focus and distraction that reduces
productivity, which brings in worsening results at a bad time.
This leads people to become anxious and possibly angry and to
increase both of those negative emotions in those around them.
Managers need to constantly ‘steady the ship’. They can give
confidence and energy to staff and seek to explore their fears
and doubts. They should explain what has to be done and why,
and model the appropriate behaviours.
The management essentials
The management of people is about five things. First, the
recruiting of talented, productive, motivated people. Having
done that, one needs, secondly, to select the best and reject
the less able, motivated or dedicated. Third, engage their head
and heart so that they are optimally happy and productive.
Fourth, there is the necessity of developing staff to enable
individuals to reach their full potential. Finally, managers need
to know how, when and why to let go people (to exit them) so
that they leave with dignity and positive feelings about the
organisation.
People stay productive and loyal because of many things; their
personality, values and life situation, their available opportunities
but most frequently because of the way they are managed.
There are clearly things to do if trying to manage in turbulent
times:
• Re-engage through frequent, consistent, honest
communication
• Lead from the front: strong, bold, adventurous; giving
confidence to others
• Learn from previous recessions: beware cutting that which
adds customer value, not going for big gestures, getting
the little things right
• Fix the leaks that soon appear when people leave or
things are cut
• Innovate: get creative with all the stakeholders
• Change: sharpen your focus, streamline processes
• Try to attract talent badly managed elsewhere: see this as
an opportunity
• Prepare for economic recovery which will (eventually) come.
Confidence and
compassion
A “Happy New Year” to you all. In the midst of the recent
doom and recessionary clamour, I attended an event at
which Sir Stuart Rose was interviewed live in front of an
invited audience. Amongst all the things that he said, in
particular about the year ahead and ‘leading’ through the
perceived turmoil, one thing stood out, the fact that he had
told all of his managers to, “smile rather than look gloomy,
as it could only get better”.
This edition of LT Focus shares thoughts, ideas and
experiences of leadership in these clearly challenging times.
Now perhaps more than ever, strong and effective
leadership is needed and will be where the proverbial
spotlight settles. Therefore, it is important for all leaders to
look at how they conduct themselves and how they project
the smile advocated by Sir Stuart Rose. As Professor
Roger Gill suggests, we do this “......... by displaying
confidence, calm and compassion”.
I am grateful to all those friends of The Trust who have
contributed to this edition. For myself, I look forward to the
challenges of 2009 knowing that we have a tremendous
team of dedicated
people ready to ensure
that they deliver the right
environment, the right
atmosphere and the
right leadership solution
to meet your needs.
I very much look
forward to working with
you in 2009.
Paul K Winter
Chief Executive
Just as the pessimist sees the glass half empty so they see
turbulent times predominantly as a threat; a threat to their
stability, livelihood and continued practices. Indeed their
perceptions may well be self-fulfilling with all those potential
vicious cycles already discussed.
Contents
Optimists believe that changes mean opportunities. Complacent,
monopolistic organisations that have not moved with the times
often go under. Bad times can be Darwinian in the sense that
they are periods when only the fittest survive.
Top 10 Tutor tips
Turbulent times test leaders. They can reveal hidden or
obscured insights like what really motivates people at work.
They demand creativity, new thinking and courage.
Professor Adrian Furnham
Professor of Psychology, University College London
Shaping up for recession:
Interview with Edward Naylor
4-5
5
Right from the first:
Interview with Jack Perry
6-7
Leadership during turbulent times Collaboration or cheerleader-in-chief?
8-9
Leadership Research:
10-11
Crisis, what crisis; effective leadership in recession
Winter 2008/9 3
Leadership Interview
An interview with
Edward Naylor:
Shaping up for recession
One of the first industries to feel the effects of the current recession has
been construction, and Naylor Industries is no exception. A fourth
generation family business, dating back to 1890, today Naylor Industries
manufactures drainage and concrete products for all areas of the
construction sector, over several UK sites, employing some 250 people
with a turnover of £30m. We caught up with Edward Naylor, Chief
Executive of Naylor Industries to garner his views on the current situation
and his own experiences of leading in a recession.
Edward Naylor, Chief
Executive, Naylor Industries
won’t have been in a leadership role during
recession. We asked Edward what his
recommendations would be for a leader
facing these challenges. “I think the worst
thing that you can do is become invisible,
which is a perfectly normal human reaction
when times are tough. When times are
great, it’s marvellous to be out there
leading from the front, pacing around the
factory, walking around with your head
Edward has faced recession before, not least during the last major construction
high. When times are tough, you probably
downturn in the early 1990s. He strongly believes that communication is key in
just want to hide in the office, lock the door
challenging times, even though, as a leader, you might not have full knowledge of
and not take visitors. You’ve really got to
what you will need to face in the future. “All you can be is honest, share the
do just the opposite, however unpleasant it
information you have available, and communicate all the more. But, obviously,
feels. Paradoxically you need to be more
when you’ve got a situation where the market is down and you have to reduce
your costs, people are saying: ‘Well, is this it? Is this as much belt tightening as we visible when times are tough than when
will need to do?’ It’s very difficult, because you aren’t sure yourself and can’t wholly times are good.”
put people at their ease.”
It’s not only leaders who are feeling
stressed, but, as no communities ever
Adverse times put leaders under the greatest pressure. I asked Edward what he
operate in isolation, a whole organisation
thought. “Pressure on an organisation has two possible responses. One is that
and its supply chains will be reacting to
team-working evaporates in mutual recrimination; the sales people blame the
what they hear and see, with a change in
manufacturing people and the manufacturing people blame the sales people and
behaviours and attitudes. “It is so important
so on. At Naylor, we are currently finding just the opposite - adversity has brought
to tell everyone what the state of play is”,
us much closer together as a team. I think the work that we have done with The
says Edward, “the worst thing you can do is
Leadership Trust has been very important; 20 to 25 of our top team have been
through the Leadership in Management programme, and you do feel like there is a to hide from people and not take their calls;
shared set of experiences and values. The saying, ‘grip self, grip team, grip task’ is suppliers as well as customers, are worried
in the current climate as to how secure their
very much at the front of our minds at the minute!” Edward describes the current
supply lines are.”
situation as, “a real team effort, we are all trying to pull together and keep very
close lines of communication, so that everybody knows exactly where we are up
One of the things leaders may face is losing
to and what we are doing throughout the organisation”.
personnel during a recession, which can
lead to a lot of emotional turmoil. “You have
Many of today’s leaders have never experienced a recession before, either
because they were working in a sector that wasn’t affected previously, or maybe almost got to re-recruit the people that
remain, motivate and re-energise them;
in another country that was not in the grip of recession. Many leaders simply
“As the building materials we manufacture are supplied to the construction
industry, we are feeling the credit crunch throughout our business. At the
purchasers’ end, many potential house-buyers can’t get mortgages and even if
they can, they are nervous about what is happening to house prices. Construction
companies have obviously got less work, and builders’ merchants are squeezed
because their customers aren’t buying as much, and there is more competition for
the work that is out there. Naylor is at the end of the chain, making products for
which there is less overall demand.”
4 LTFocus
really show why you believe the organisation in its leaner shape
is going to make it through,” says Edward. “There may even be
some positives: recession may provide a prompt to have a
closer look at the internal workings of the business and improve
working practices.”
A lot of energy is needed to be a leader in difficult times,
Edward has his own way of coping; “we have a non-executive
chairman who is an experienced businessman, he has been
through several recessions, and is a very useful sounding
board to me. I think at times like this, being a leader of a
business is quite a lonely place; you are under pressure from
various quarters, financially and operationally and above all
what you are not allowed to do, however much you’ve got
doubts and uncertainties, is allow them to filter into the
organisation, you’ve got to have a positivity. The role of leader
is all about showing people the way forward, but at the same
time you soak up a lot of pressure; on the one hand you try to
energise your troops, on the other hand you might be being
battered by suppliers, financiers, and whatever else. So, if
you’re feeling that you are stuck in the middle, you need
somebody you can share your experiences with, whether
that’s a non-executive, a friend who’s got business experience,
or your spouse, or partner.” And, it’s not only handling your
emotional fitness, it’s also about keeping yourself physically
tuned. “I’m not a fitness junkie but I think you need to keep
reasonably fit and you need to do things outside of work;
there’s a sort of pressure cooker effect at work, when times
are tough, you need to have a release valve.”
The gloom and doom is everywhere in the media and it’s clearly
affecting the way many people think and behave. Edward
agrees, “it’s very easy when you’re in ‘heads down, put out
fires’ mode, to imagine the fun has gone out of life; there are
boom and bust cycles, but clearly some elements of normality
will return at some point in the not too distant future. Clearly
though you’ve got to react to the current realities and make
sure you make it to the better times, and that’s really the
challenge to management teams going through a downturn.”
Jennifer Buttery
Marketing Manager
Top 10 Tutor tips
From all walks of life, our tutors are experienced
executives, working in many different arenas, who
give up time each year to tutor on The Leadership
Trust’s programmes. They bring a freshness, great
personal integrity and a wealth of knowledge on
leadership to our programmes.
Gathering them together at the end of 2008, we harnessed
their experience and asked them which 10 behaviours and
attributes leaders should exhibit facing the current
recession. This is what they said:
1. Vision – don’t loose it, keep clarity of objectives and
revisit them regularly.
2. Visibility – listen to your people, give them feedback
and be available for them.
3. Consistency – keep mindful of your focus, respond
to rumours, and deal only in the facts that you know.
4. Positive outlook – keep the right tone in all
communications, and don’t forget to support your own
needs by allowing yourself time to keep your emotional
and physical well-being topped up, to be able to stay
positive.
5. Empathy – during this time many people are under
stress, some may show it more than others; this
includes your team, peer group, those above you and
people in your families and communities. They will be
experiencing fear, apprehension, insecurity and feeling
hostile, maybe even looking for someone to blame.
Accept the behavioural changes that come with the
stress and empathise with others; no-one will be left
without a mark from this recession.
6. Lead by example – this speaks for itself, but it is
probably a good time to review your actions and how
others may view them.
7. Involvement – everyone has a role to play and can
contribute. Look for the strengths in those around you;
you may be surprised what contributions they are able
to make.
8. Creativity and innovation – it’s more essential than
ever to be creative and innovative with your thoughts
and actions; especially as those organisations showing
the greatest creativity and innovation are more likely to
survive the recession and come out of the other side
with growth potential.
9. Embrace change – recession provides an
opportunity to re-think; this may be as much for yourself
personally as others.
10. Look beyond the crisis – it will pass and new
opportunities will present themselves.
If you have any views on your own experiences of
leading in recession, please send them to us, email
jenniferbuttery@leadership.org.uk
Winter 2008/9 5
Leadership Interview
An interview with
Jack Perry:
Right from the first
Right from the first, Jack Perry has lived a whirlwind life. The son of
American ‘corporate gypsies’, he travelled the world and saw leadership
in action first hand from a very early age. Without doubt, this stood him
in good stead for his career at Ernst & Young and, more recently as
Chief Executive of Scottish Enterprise where he candidly says it, “can
sometimes feel like operating in a fishbowl”.
If anyone has experienced the mighty challenges of change, it’s Jack Perry. We
talked to him about his life, career, personal experiences and what he believes is
in store for leaders through this current recession.
With a father in some very senior roles in the behemoth General Motors (GE)
during its heyday in the 1950s and 60s, whilst holding a variety of civic and
public offices, Jack was in an ideal place to learn about the duties, challenges
and excitement of leadership. His father’s job meant a childhood where
schooling was split between the contrasting cultures of Scotland and
Cleveland, Ohio, summers spent in France, where he learnt to speak French,
and a spell in Argentina. Small wonder then, that Jack sought a career in
international business.
A pure science degree at Glasgow University was swiftly followed by a
Postgraduate Diploma in Accountancy at Strathclyde University before Jack
joined Ernst & Young; one of the largest professional services organisations in
the world, and, today, one of the big four auditors. Initially based in Glasgow, he
also worked in Dallas, Texas for a spell. In 1995, Jack became Managing Partner
of Ernst & Young Glasgow. “I was fortunate in getting promoted into leadership
roles at a very early age and quickly found myself thrown in the deep end
leading a corps of partners, many of whom were my bosses when I was a boy,”
says Jack, “now that was a challenge!”
trust your judgement. In Leadership Trust
parlance, you have to ‘grip self’,” he says.
“Being a leader implies that you are
leading people, so there is an element of
seeing the vision and being inspirational
about it; getting people behind you and
on-side. Great leaders do this and usually
combine it with personal warmth; people
follow because they really want to, they
want to do their best.”
The ability to have a range of leadership
styles is important to Jack. “There will be
times, typically during an emergency, and a
recession could be considered as such,
when there is a need for even greater
urgency. If you’re wanting an organisation
Many people in significant leadership roles have influenced Jack throughout his
to change, building concensus is ideal; get
career, but none he admires more than Jack Welch who he believes has
your followers and then take it out to the
exercised great leadership as well as good management. “He remains for me
organisation, however, in a case of real
the archetypal great corporate leader; stunningly effective over a long period,”
emergency or organisational distress, you
enthused Jack. “Welch reinvented GE over the 20-odd years in the hot seat, on might have to short-circuit this process and
three or four occasions; when you have been in post a long time, to be able to
display your leadership by saying, ‘here’s
say, ‘what we did was great, and now we need to do something different’
what you now need to do, and this is what
requires absolutely crystal clear vision, as it’s easy to just carry on with the things you must do now’. Sometimes when times
you yourself have already implemented.”
get really rough, you also need to toughen
up too, and not go through some of the
In a completely different context, Warren Buffet, a self-made billionaire,
routine things that you would normally want
investor, businessman and philanthropist, rated by Forbes as the richest man
to do, for the sake of the organisation;
in the world, is another leader that Jack admires, “he has been consistently
sometimes you are just looking at survival.”
right, and has never been swayed by fads, again, exercising great leadership
and management”.
Jack is no stranger to significant change
programmes, and he cites his greatest
Clarity of vision is a key leadership trait for Jack, “I think you start out with
leadership challenge as his recent work
clarity of vision, then you need to be decisive. When you are faced with big
with Scottish Enterprise; “the biggest and
challenges, no-one has absolute certainty, there is no crystal ball; you have to
6 LTFocus
says, “we reckoned that was the way we could
effectively stimulate more economic growth”. After
navigating through the political process, in 2007 the
board at Scottish Enterprise got the green light from
the new Scottish government and set to work. 1,200
people were transferred out of the organisation, and a
further 250 left through a voluntary severence
programme leaving around 1,000 people with, “an
absolutely clear remit and focus, having rid ourselves
of a lot of internal barriers and fragmentation all with
the objective of improving customer service”.
most complex change programme that I have personally
been involved in; initiating, leading and executing”, he says of
the 2,500 strong organisation he became Chief Executive of
in 2004. There had been concern that this massive public
sector organisation had lost sight of its clear economic
development rationale; “it had become a home for a variety of
government initiatives, so we did everything from major
regeneration projects to providing careers advice to school
children.”
It’s no surprise then, that to begin with, Jack found it difficult
to explain succinctly what Scottish Enterprise did, and he
found a lot of general dissatisfaction inside and outside the
organisation, so was keen to create real clarity. “We wanted
to focus on our core role of providing support to business,
which included improving the business environment in a way
that was driven by the demands of key industries; those
where Scotland was going to make its living in the future,” he
A project involving changing from 13 separate
operating companies, all statutory limited companies,
into a single organisation; retaining less than half of
the workforce; and instilling common working
practices where there had previously been many
disparate ones across the 13 organisations, was
bound to be a huge task not without its issues. “Oh,
there were some exciting behind-the-scenes times,”
admits Jack. “We operate in a very public
environment so we did experience a few tricky
moments; both political and press related. I couldn’t
have done it without an outstanding leadership team
who shared the same vision. They were absolutely
aligned and did an outstanding job; didn’t waver,
stuck to the timetable and applied great rigor and
execution.” Not that the communication was one-way,
as Jack puts it; “there were times, particularly during
the design phase, when we would have meetings
and, often as you are thinking out loud; as you try to
float ideas, the most valuable feedback you can get is
from the people who are confident enough to
contradict you. People who have the clarity and the
confidence to be able to say, ‘Stop, look, here’s what I think’;
that’s incredibly valuable”.
Right now, Jack is keen to make sure that the changes he
has made are embedded and wants to get even better at
demonstrating the value Scottish Enterprise delivers to the
Scottish economy, which he says is, “always a challenge,
particularly in a volatile overall economy”. With this to focus
on and his other responsibilities including Chairmanship of the
Translational Medicine Research Institute, he has plenty of
challenges ahead.
“You know, I still sometimes take a deep breath and say ‘grip
self’; lets get on with it!” laughs Jack.
Jennifer Buttery
Marketing Manager
Leading change
If you find yourself leading significant change and
would like some support, you might like to consider
our masters degree, MA Leading Change.
Students bring their change projects to the programme and
work on them with the support of experienced tutors and
other leaders facing similar challenges.
Our 2009 programme begins in October, and more details
are available on leadership.org.uk/leadingchange
Winter 2008/9 7
Latest in Leadership
Leadership during
turbulent times collaboration or cheerleaderin-chief?
There has always been a compelling argument that
we are living in times of unprecedented turbulence.
When did you last hear that the rate of change is
declining, things are not moving as fast as last year,
dramatic events in the world are not what they used
to be? We are told to expect the unexpected, and
beware of the known unknowns. What is clear, in
times of turbulence when an unexpected event can
have a dramatic longer term effect, effective
leadership is critical in order to create a way forward
that offers confidence in the future.
Bring on the cheer-leader?
But what does this leadership look like? Is it about having
a strong charismatic cheerleader-in-chief who people look
up to and seek reassurance from that individual that
everything will be alright? Alternatively, is it a form of
leadership that is more collaborative and collective, that is
focussed more on a group or groups of people at different
levels than on the traditional individual who is remembered
for saving the day? Events in the financial sector continue
to reverberate across every continent creating one of the
biggest global leadership challenges in recent times. Has
a single individual emerged who will be remembered in the
same way as Churchill was as a wartime Prime Minister or
Rudolf Giuliani was in the aftermath of 9/11? Who will be
remembered for leading us out of the crisis or has the
leadership challenge been met with more of a
collaborative approach?
Turbulence is just intense change
So how do we react to turbulence and what sort of
leadership do we expect or seek? One of the significant
factors is that what is going on around us is happening now
and we can only draw comparisons from either our own
personal experiences, what we have read, what we have
been told, or what we see and hear through the media.
Thus, depending on how we see the world we respond
differently to turbulence in our lives. But is not turbulence in
8 LTFocus
our lives effectively the same as dealing
with any form of change but in a more
intense manner? Perhaps we could
learn from how organisations deal with
change in order to take us forward –
after all, the financial sector comprises
organisations albeit not as many as this
time last year!
Change is emotional
Many of the principles that hold firm
in dealing with change are the
same whether we are dealing with
change linked with a global crises or change in our
own lives. The former may seem more important in the
wider sense, but change is often a catalyst for strong
emotions and we look for direction in the same way as
our political leaders seek advice in a crisis – after all they
are just individuals themselves, the difference being that
their leadership is under public scrutiny all the time.
Turbulence and transformation
In driving organisational change the work of John Kotter
remains influential and there are lessons to be gained in
the current crisis from his work on transforming
organisations. Kotter offers Eight Steps to Transform Your
Organisation through establishing a sense of urgency,
forming a powerful guiding coalition; creating and
communicating a vision; empowering others to act;
planning and creating short-term wins; consolidating
change and institutionalising new approaches.
Circumstances often create a sense of urgency through
necessity and a real crisis can force leaders down a route
where there is no room for personal interest and the
pathway for change is driven by the nature of the crisis
itself – in essence it is the situation that is driving the
leadership response. In extreme turbulence the sense of
urgency is driven by the prevailing circumstances that
include dealing with the complacency and mis-
management that caused the problem in the first place
and ensuring it doesn’t happen again.
Uniting the competition
The requirement for a guiding coalition is interesting. No
single individual has emerged from the crisis as national
leaders balance resolving the global issues and how they
effect their individual economies, with their own political
challenges and popularity at home. The crisis has created
a common global challenge that has transcended
individual national agendas and has created
unprecedented coalitions across the globe. Examples
include alliances of traditional competitors such as Korea,
China and Japan and US car manufacturers, and greater
financial unity within Europe. But have they provided the
confidence and vision required for recovery or is there still
a role for the individual? Individuals often inspire through
charisma - groups or coalitions seldom if ever inspire –
when did you last hear of a charismatic collaboration?
Defining a vision can be messy and
ambiguous
If these global coalitions are to be effective then creating
a clear vision for recovery is crucial if there is to be
sufficient confidence generated to ensure long-term
recovery. Leading by example is essential to
communicating a vision. However, leading by example
becomes far more challenging as the number of people in
the decision making process increases and where
consistency of the message can become blurred. But
how do you actually build a vision? Because it relates to
the future, people assume that vision building should
resemble the long-term planning process: design,
organise, implement. But does it work that way? Defining
a vision of the future does not happen according to a
timetable or flowchart. It is more emotional than rational.
It demands a tolerance for messiness, ambiguity, and
setbacks, an acceptance of the half-step back that
usually accompanies every step forward. This sort of
vision does not lend itself easily to a coalition that needs
to move fast. Circumstances have forced individuals to let
go and empower others to act by getting rid of obstacles
to change, changing old systems or structures that
seriously undermine the vision and encouraging risk
taking and non-traditional ideas, activities, and actions.
Linked with providing market confidence is planning for
and creating short-term wins, planning for visible
performance improvements, creating those improvements
and recognising those involved in the improvements.
Develop leaders not managers
It has yet to be seen what the long-term impact of the
current crisis will have but there is no doubt that
improvements and change will emerge and new
approaches adopted. So what lessons are to be learned?
Producing change is about 80 percent leadership establishing direction, aligning, motivating, and inspiring
people - and about 20 percent management - planning,
budgeting, organising, and problem solving. Unfortunately,
in most of the change efforts those percentages are
reversed and it has taken a crisis to create the situation
for genuine collaborative leadership to emerge.
Passion, inspiration, vision and courage
So is it leadership vested in the individual during turbulent
times or is more collaborative leadership required? As
turbulence is seen as intense change then the leadership
qualities required to drive change are needed in equal
measures in times of crises. There are two ways of
approaching a crisis: you either carry on in a state of denial,
or hope the worst won’t happen; or you take the proactive
route, accepting there will be some pain, but making sure
there’s a positive return on the experience. Difficult times
provide a wonderful opportunity to implement changes, to
make decisions that have perhaps been on hold for rather
too long. Passion, inspiration, vision and courage are
required to create the confidence and atmosphere required
to deliver the change required – these are more often found
in the individual rather than the group. Our business
schools and work organisations continue to produce great
managers; we need to do as well at developing great
leaders. On balance, during turbulent times, bring on the
‘cheerleader-in-chief’.
Dan Archer
Leadership Development Consultant, Dubai
Shape up to the future
The next few months may be the most
challenging of your career. Managing a
downturn in the economy which impacts
on you, your people and your
organisation calls for the best
leadership skills.
Take some time out now to hone your skills
and shape up to the future.
Our Executive Leadership Programme
will question your preconceptions of
leadership and stretch your capability,
leaving you enlightened, confident and ready
for the demands of 2009 and beyond. Join
executives from other arenas to confront,
debate, explore and enhance your
leadership capability on this 3-day
residential programme.
For more information call +44 (0) 1989 767667 or visit leadership.org.uk/executiveleadershipprogramme
Winter 2008/9 9
Leadership Research
Crisis, what crisis; effective
leadership in recession
What characteristics and behaviour are required of leaders in crisis and
emergency situations? Is a different kind of leadership required in
comparison with ‘normal’ conditions? The answers to these questions are
particularly germane today in the seriously debilitating recession that is
spreading worldwide, the frequent terrorist attacks on civilised society and
the natural disasters that befall us from time to time.
“When the going gets tough, the tough get going”, according to a well-known
saying. The going certainly gets tough during a crisis. But what kind of leaders are
the ‘tough’ ones? And how do they get going? A crisis is an event, or a series of
events, that brings virtually all normal business to a halt and commands the full
attention of those in leadership positions for days, weeks, months, or even years,
as is likely to be the case in relation to current world economic conditions and
terrorism. According to Ian Mitroff, such crises violate commonly-held assumptions
– the bedrock on which we construct and manage our world. This creates a loss of
meaning and purpose and a feeling of betrayal. A spiritual leadership challenge is to
restore people’s belief, confidence and faith in themselves and the world.
Keith Grint tells a cautionary tale of leadership during a crisis – about how a crisis is
perceived, how the situation is ‘constructed’. The crisis is Saddam Hussein’s
weapons of mass destruction are about to be deployed – within 45 minutes. The
response is, ‘decisive and strong leadership’, in starting a war against Iraq. The
situation is constructed by those in control of the information – leaders with power
– who then mobilise support and action. The point is that things are not always
what they appear to be: intelligence dossiers can be ‘sexed up’. A situation may
not necessarily be critical but may be made so, or apparently so, by those with the
power to do so – for example politicians and journalists. They may make a crisis
out of a drama. And a leader’s actions or inaction may either cause things to
deteriorate further or make a bad situation better: compare and contrast the
responses to Hurricane Katrina and 9/11. As Bernard Bass says:
“Both demagogues and statesmen can be influential but not necessarily
effective in times of crisis, as can transactional and transformational leaders.
The transactional demagogue can assure inactive followers that warnings are
unimportant and persuade impulsive followers that simple solutions are
acceptable.”
values that are shared), scenario thinking
(about possibilities) and response plans,
including crisis management teams.
The best leaders are both transformational
and transactional, argues Bernard Bass as a
result of his 30 years of research into
leadership. Good crisis leadership entails
several specific actions. The three ‘grips’
that are well known to delegates of The
Leadership Trust’s Leadership in
Management programme, play a particularly
important part in crisis leadership:
• Grip oneself: to enable one to make
decisions and take action under stress
• Grip the team: empower the crisis
management team to be able to do
what needs to be done
• Grip the task: clarify and communicate
the objective and the purpose of the
decisions and action and form
strategies to pursue them.
Effective crisis leaders also inspire people to
want to do what needs to be done –
unpalatable though the necessary actions
may sometimes be – by, for example,
transforming the crisis into a challenge.
And they set an example in virtuous
personal behaviour: “...a crisis does not
make character – it reveals character”, says
Sean Murphy.
My review of the research literature on
leadership during a crisis suggests there are
Transformational statesmen on the other hand, he says, shake people out of their key elements to its effectiveness:
torpor and motivate them to pursue seemingly unattainable goals. They show
• Networking and collaboration across
people the inadequacies of simple solutions and defensive avoidance. They unite
boundaries, which may call for
the efforts of people as a team and reinforce their cohesiveness around a
personal power rather than position
common purpose.
power or authority (which may not exist)
A crisis also requires managing effectively: analysis, evaluation, planning,
• Scenario planning: what are the likely
organisation, communication, and monitoring and controlling are key requirements.
and most important possible
Good crisis management also entails preparedness: making and testing
outcomes?
assumptions (for example about the world, our fellow citizens or colleagues, and
10 LTFocus
• Supporting and protecting the people affected by
displaying confidence, calm and compassion
• Safeguarding the organisation’s (or industry’s or nation’s)
reputation and reassuring stakeholders
• Fulfilling legal, moral and professional obligations –
displaying integrity and accountability
• Drawing on collective leadership resources within the
organisation or nation
• Personal qualities and skills that constitute resilience
under stress.
The Cranfield Resilience Attribute Model defines several such
qualities and skills:
Knowledge – the wisdom to apply knowledge gained from
training and experience correctly in context and to
understand the full implications of the action to be taken.
Robustness – the ability to maintain commitment to
achieving the desired outcome and not be easily deflected
by obstacles or setbacks; to show cognitive, emotional and
physical strength in adversity.
Ability to change – the ability to think laterally, use different
leadership styles according to situational needs, be
adaptable to varying situations, work in different ways, and
involve others in planning and shaping decisions that affect
them.
Perseverance – the ability to display endurance and
tenacity, continue steadfastly and persist in pursuing the
mission and goal.
Decision making – the ability to handle complexity,
uncertainty and ambiguity, evaluate information, and
display clarity of thought, judgement and decisiveness
under severe pressure.
Integrity – the ability to demonstrate consistency between
The Leadership
Trustand actual behaviour, moral
espoused
beliefs and values
courage,
appropriate Beijing
values and
ethical standards,
congratulates
athletes
openness, honesty and trustworthiness.
Communication – the ability to demonstrate skill in
negotiation, influencing and persuading, questioning, active
listening, giving and receiving feedback – orally and in
writing, face-to-face and electronically – and in recognising
and using body language.
Emotional intelligence – displaying a high level of selfawareness, self-confidence and self-control and the ability to
perceive and understand the needs, feelings, limitations and
talents of others and to respond appropriately.
Each of us, very personally, may have to face our own crisis
or emergency from time to time. Each of us has what
Amanda Ripley calls our, ‘disaster personality’, which takes
over in a crisis. We are programmed, she says, with basic
survival skills, the most basic need in Maslow’s hierarchy of
human needs. In this respect Fleet Admiral W. F. ‘Bull’
Halsey of the US Navy had some comforting words for us:
“There are no great men. There are only great
challenges which ordinary men are forced by
circumstances to meet.”
We all can rise to the challenge of a crisis if we display the
personal qualities and learn the skills and principles of effective
crisis leadership.
Professor Roger Gill
Visiting Professor of Leadership Studies at the University of
Strathclyde Business School
A version of this article with references and suggestions for
further reading is available at leadership.org.uk/articles
Conference 2009:
Leadership Through Recession
Because we understand the issues facing leaders
during an economic downturn, our conference this
year focuses on ‘Leadership Through Recession’.
Held on 22 and 23 September at The Leadership Trust, it’s
an opportunity to hear from specialists on leadership issues,
and discuss, debate and learn with other leaders.
Put these dates in your diary and look out for more
information in the spring.
All the articles in this issue are available at leadership.org.uk/articles
Volume 14, Issue 3
LT Focus is published quarterly by The Leadership Trust (Training) Limited, Weston-under-Penyard, Ross-on-Wye, Herefordshire HR9 7YH United Kingdom
Telephone: +44 (0)1989 767667 Fax: +44 (0)1989 760706 Email: enquiries@leadership.org.uk
LT Focus is distributed free of charge to clients and LT Alumni of The Leadership Trust (Training) Limited.
Contributions are welcome. Please send to Fiona Harding, Editor at fionaharding@leadership.org.uk
© The Leadership Trust (Training) Limited 2009.
LT Focus is printed on recycled paper using mineral oil free inks. Biodegradable. Please recycle this publication.
Winter 2008/9 11
NOW IS THE TIME
TO INVEST IN SKILLS
An Open Letter to UK Employers
As leaders of major businesses, business organisations and trades unions
in the United Kingdom, we are absolutely committed to investing in training.
In an economic downturn, there is always a temptation for businesses - large and small - to cut spending
on staff training. When times are tough, it looks a simple way to cut costs.
But it’s a false economy. Research in 2007 confirms that firms that don’t train are 2.5 times more likely to
fail than those who do! Now is precisely the time to keep investing in the skills and talents of our people. It
is the people we employ who will get us through. When markets are shrinking and order books falling, it is
their commitment, productivity and ability to add value that will keep us competitive.
Investing now in building new skills will put us in the strongest position as the economy recovers. Skills to
support the development of new products and services will shape whether we are ready to gain
competitive advantage when growth resumes. From our experience in previous downturns, it was the
businesses that did invest in their staff which saw the most dynamic recovery.
Even in these difficult times, there are real opportunities we should seize. In many businesses, it will be
easier to find the time to release staff for training. Larger businesses could strengthen their supply chains
by developing training in partnership with suppliers. For individuals, committing to training is the best way
to maximise future employment opportunity. And there is a wide range of training available now for
businesses to use from colleges, universities and training providers, many of them publicly funded. Through
the work of the UK Commission for Employment and Skills, employers are making sure that this training is
simple to access, clear and easy to use, and adds real economic value.
The skills of our people are our best guarantee of future prosperity - and the best investment a business
can make in challenging times. We must not pay the price of failing to invest in the talent on which our
future will be built.