Personnel(ly) Speaking
Personnel Management Systems, Inc.
When Times are Tough, the Tough Become Better Leaders -
Four Lessons for Tough Times
Icarus, of Greek mythology, with his glued-on feathered wings, flew too close to the sun and plunged to earth. He forgot he was human. Many business people, like Icarus, flew too high during the real estate bubble of 2007 unaware that they were suffering a delusion of invincibility and have since plunged back to earth. Now, those same business people and investors are stunned by this collective fall to earth and are understandably afraid to take perhaps 50% of the risks they eagerly took two years ago. The pendulum of risk taking has swung over to the side of fear to what seems to be the same degree it had previously swung to the side of no-fear. Below are four lessons learned from this economic rise and plunge to earth that business people can use to recover from the impact and get back to business.
Human psychology will always influence the economy and cause economic cycles
– due to our natural inability to remain in a steady state of normalcy. We’re
a creative species. We are not complacent. We’ll recover from this plunge,
discover something else that will rev up our psyches and the economy and there
will be another “bubble” somewhere down the line…it’s inevitable. The upward
swing creates innovations and wealth and we are lucky for it. The plunge sobers
us and can help us be more realistic about what can and should be produced,
etc.
Lesson 1: Since this is a cyclical thing we are
experiencing, those who take risks now will be able to “buy low” and hopefully,
”sell high” as the economy improves. Look at what Warren Buffet is doing.
Leaders lead. Now is the time that you’ll see who is
really made of the “right stuff.” Hunkering down, the new buzz word is what
followers do because they are strapped to the pendulum on its swing to the
other side. There is a difference between belt tightening and hunkering down.
Yes, now is the time to be prudent but not to hunker down.
Lesson 2: Those of you who take prudent risks now – who
lead – will be ahead of the pack as the economy builds up again.
We got lazy and complacent about developing people during the upward swing.
It seemed that many people thought that they had the Midas touch for picking
leaders. All you had to do was hire bright people and let them loose and they
would figure things out. Wrong! Just look at the banking and mortgage industry
and what happened. (You might enjoy reading a related article, The Talent
Myth, Are Smart People Overrated? by Malcolm Gladwell in The New Yorker,
7/22/02) Research shows that managing people well is a learned skill, not
something that most of us are born with. Trained managers will lead more
effectively, achieve better results, and have lower turnover of their best
employees. Remember the number one reason for people quitting a job still is,
“I hate my boss.” The very best people will not tolerate a bad boss for long
because they know they can find a new job and a better boss somewhere else -
even when times are tough. Unfortunately, those who stay behind with bad bosses
are usually the least skilled and least productive people or those who are the
most afraid…not a recipe for building a successful company.
Lesson 3: Put time and money into developing your people…it
will pay off.
The very best leaders respond with clearer heads under pressure. They
have higher EQs (emotional intelligence) than less effective leaders. Emotional
intelligence is the capacity to "manage" ourselves and our
relationships effectively and consists of four fundamental capabilities:
self-awareness, self-management, social awareness and social skill. Effective
leaders use, for example, varying leadership styles depending on the business
situation and the people they manage. They are not prisoners to a
one-size-fits-all approach to leadership. David McClelland of Harvard University found that executives who were rated high in “emotional intelligence” competencies
by their peers and subordinates outperformed those rated lower in emotional
intelligence by 15 – 20 % on yearly revenue targets. During difficult and stressful
times, “emotional intelligent” people manage their emotions better, react with more
clear and more rational minds, and make better decisions.
Lesson 4: Improving your “emotional intelligence” (EQ) can
help you achieve better bottom line results and be a better leader.
Republication permission: Carl Robinson, Ph.D., Advanced Leadership Consulting. “Executive Briefing: When Times are Tough, the Tough Become Better Leaders - Four Lessons for Tough Times”. www.leadershipconsulting.com carl@leadershipconsulting.com
Personnel(ly) Speaking is a monthly comment on HR issues of importance. It is intended to provide general information and must not be construed as legal advice. Reproductions are allowed as long as credit for this information is given to PMSI. We welcome your comments, questions, and concerns. © PERSONNEL MANAGEMENT SYSTEMS, INC., Corporate Office (425) 576-1900, Colorado Office (720) 497-0200, www.hrpmsi.com.