Inspirational Leadership in Difficult Times
With daily news of foreclosures, soaring gas prices, stock plunges, write-downs and the credit crunch, most business leaders have seen, if not felt, the signs of recession. Not only have questions been raised about the extent of a downturn, but how to best weather the storm should we again find ourselves in rocky economic waters.
As Albert Einstein once said, “In the middle of every difficulty lies opportunity.” But how do leaders keep themselves and their employees focused on opportunity when the challenges — budget cuts, redundancies, earnings disappointment — are often so palpable in tough times? How does a leader provide the steady course when the opportunity to take shortcuts can seem the easiest route?
The answer comes not by bracing for the downturn but by embracing the new, 21st century world in which we find ourselves. When we understand its conditions, we see opportunities to focus on at the very core of why we are in business in the first place. Further, by getting clear on that foundation, we are inspired by a long-term view of business and can avoid taking action that is counter to that. Finally, by enlisting others in that vision and inspiring them to act according to shared values, we have the power to not only survive but thrive and endure.
First, understand it is a new 21st century world
A 2003 study conducted by Accenture found most executives viewed the last recession as an opportunity to improve business performance. However, many found it difficult to convert downturn into advantage.
In the Accenture study, the leaders that did succeed set priorities based on how they created value, leveraged information systems, priced for profitability and collaborated with customers to improve value proposition.
Today, we find ourselves in a vastly different world, where leading companies have already done all of these things. As a result, the old thinking offers no new advantages. More, tried and true notions of finding advantage and success are obsolete in a world where everything — our products, services and processes — is a commodity, available for reverse-engineering and duplication.
Today’s world is flat, connected and transparent. It connects us — and reveals us — in ways we have only just begun to comprehend. Customers, competitors and the public now have unprecedented visibility into organizations and their operations. We have entered into an era in which creating value begins with embracing values, where the consistency of our conduct is the new currency of commerce.
The importance of living your values
You may think, Business is a rough-and-tumble world. Competition is fierce, the pressure to make the numbers intense and the environment slippery — and that’s in the good times. It’s great to think in these ideal terms where everyone is driven by values and inspired by common goals, but that’s just not the way it is.
What leaders need to remember in an up- or a downturn is that quarterly results are not the only barometer of success in a world in which people can also judge how you achieve those results. Critical questions of how a company achieved those results have to be answered, especially when markets are weak, skepticism is high and cynicism can prevail.
Allaying those concerns requires building customer and market confidence that the results were achieved properly, in line with both the company’s and society’s values. Of course, everyone asserts great values. In fact, in the past decade, business has gotten good at reassessing and rewriting our values statements. We have moved away from pragmatic values — customer service, innovation, performance — to purer, moralistic values — trust, integrity, accountability. But values statements, like any other business claim, do little if you don’t live up to them. In fact, the words that make up value statements may even be turned against you in an environment in which customers are empowered to share their stories with the world.
In a hyperconnected and transparent world, it’s not what a company says it does or stands for — it’s how they do what they what they do, how they live their values — that will set them apart. The sum of a company’s hows — how it communicates, how it works, how it treats others, how it makes decisions, how it interacts in the marketplace and how consistently it acts — is the source of its lasting competitive advantage.
The era of inspiration
But how do you get ideals to jump off the written page into action?
There are three potential ways to get people to do things — coercion, motivation and inspiration. As a modern leader, coercion is a poor choice. You can’t browbeat people to get them engaged in cooperative behavior. Employees that fear unpleasant circumstances quickly become unhappy, unproductive and vote with their feet. Motivation has its place, but it also has its limits, particularly in a down market, where money and other incentives do not flow as freely.
Today, we are in an era of inspiration, where great results come from employees that are bought into not just the company’s potential for success but also its underlying mission. They work not just for the pay but also for their ability to achieve something they find inspiring.
In this environment, power is found no longer in control over something or someone. Rather, it’s power through something — a power that connects, not one that commands. The founder of Southwest Airlines, Herb Kelleher, understood this new mode of using power. When a financial analyst once asked him if he was afraid of losing control of the organization, he replied “I’ve never had control and I never wanted it. If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need. Were looking for people who on their own initiative want to be doing what they’re doing because they consider it to be a worthy objective.”
The essential question for winning in the new economic era is not how will you squeeze more out of your people and operations but, Why do you and your people get up every morning and go to work? Is it to merely make money, outperform your competitors and deliver greater shareholder value? Or is it something more? Is it, as Google describes, “to organize the world’s information and make it universally accessible and useful,” or Bayer, “to benefit people and improve their quality of life”?
During challenging economic times it is far better to create an environment committed to a higher goal than a financial one. For one, dollar-based targets are much more difficult to achieve during a downturn. Second, and more dangerously, if a leader with a dollar-based vision says to his or her subordinates, “Make the numbers,” “Just do it” or “Your bonus depends on this,” the likely outcome is a registering of these statements by employees as “by any means necessary” or “no questions asked.”
This, of course, is a prescription for disaster. Even in less dire scenarios, a numbers-only focus leads to considering what can be done instead of what should be done, a focus on what might be legal, not what is right.
It is interesting to note that Nike has realized that its “Just Do It” slogan that was so popular in the last decade was too command-and-control. “We are shifting from telling you to run better to helping you run better,” Nike’s marketing chief was quoted as saying recently.
When you are focused on the long-term view — a mission and purpose of greater significance — you both avoid potential problems and enjoy an advantage. You can make decisions in a greater context; you have the compass to make the tough choices without losing your way. Newport News Ship Building, now Northrop Grumman Newport News, founder Collis P. Huntington understood this when he said, “We shall build good ships here. At a profit - if we can. At a loss - if we must. But always good ships.”
Leadership in the modern world is about turning values into inspirations for others by reaching out to those around you, sharing your vision with them and getting them to buy into a common purpose. Dwight D. Eisenhower once said leadership is “the art of getting someone else to do something you want done because he wants to do it.”
Consider what happens when a few people in a baseball stadium start “the wave” by standing up and throwing their arms in the air. Then in section after section, people stand up and raise their arms. Before long, the wave sweeps the stadium, as tens of thousands of people of all ages, backgrounds and incomes participate. The wave — which at its core is an expression of unbridled passion for winning — as a metaphor works in business because it is about what a diverse group of people can accomplish when united by a common vision. A single wave is good, but companies need to build waves over the long term.
As Aristotle said, “We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” When we practice and get good at inspiring through and living our values, we build important muscles that will give us strength and support during the tough times. Just as a wide receiver doesn’t have to think, plan and research to respond and catch the ball when it is thrown in his direction because he has practiced the action time and time again, a leader, or a rank-and-file employee, who has practiced making decisions aligned with mission and values responds appropriately when hit with a difficult situation.
And when the entire team understands those values, and communicates and collaborates around them, a culture begins to develop. Historically, a values-based culture has been a rather exotic concept, one mainly of interest to certain companies and senior executives. In our new world, culture has taken on greater significance. Today, it is the measure by which companies are judged. Prospective employees go online to determine what the culture is like inside the companies. Customers have unprecedented insight into how your representatives act. Leaders are, therefore, enlisting new energy to inspire everyone, from the factory floor to the boardroom, to embrace values and mission as an essential responsibility to how business gets done and establish a culture that is strong and healthy. They are reframing what success looks like within this construct.
This is a great challenge for business. But it also provides opportunity, and there is precedent for it. Quality and safety at one time seemed just as amorphous as culture, as subjective and intangible. Workplace injury and death were viewed as a cost of doing business. Quality control meant removing defective products from the end of an assembly line. People didn’t believe that quality could be defined, measured or even talked about. It wasn’t until Joseph Janner, who just recently passed away, and his counterparts began to talk about efficiency and productivity did a movement begin to take root in business. And when business realized safety wasn’t just a goal but a discipline, accident and injury rates declined.
So, too, today we have the opportunity, provided ironically by a lack of economic opportunity, to look at the importance of culture and values, not just as a thoughtful exercise, but as a means to create value during hard times and in good.
Last 5 posts by Dov Seidman
• Why We Can't 'Motivate' Engagement - August 19th, 2010
• The Economy: Don't Hit the Reset Button - May 19th, 2010
• Is There 'Honest Tea' on Wall Street? - May 14th, 2010
• Inspirational Shame in the Era of Behavior - April 14th, 2010
• Philosophy Is Back in Business - January 13th, 2010
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