Bad leadership got you in trouble and it is good leadership that will get you out of trouble.
Leadership is about the future, mobilizing people behind a vision, and inspiring them to achieve it. It’s about producing useful change and in the end, it’s about achieving results. Leaders are confident and their followers are confident in them; they follow willingly. If a leader lacked this duality of confidence before the business went south, it will be especially difficult to develop it now. Clearly you will need to make changes to the leadership team to turn the business around.
The core principles of leadership have stood the test of time and current circumstances will not change that. Leadership is leadership. But there are certain behaviors or practices that leaders will need to emphasize in a turnaround or they will later become fatal flaws.
Working with a number of leadership teams to weather a crisis, here are ten rules of the road for leading a turnaround:
- Don’t deny reality. In a period of crisis, leaders need to face reality harder, faster. The tendency to deny current realities and ‘wait for Christmas to come’ is strong. Leaders need to be even more in touch with markets, customers, employees, shareholders, and competitor moves and forced to confront the facts.
- Don’t cut across the board, cut with strategic intent. Under funding everything will not work. Cost cutting is always a necessary response to a downturn but it must be done with strategic intent. Be clear about what you need to preserve – and what you need to grow. And if you must cut, cut deep and fast.
- Seize opportunities. Leaders everywhere know that even in a crisis they need to ‘focused opportunism’. They all say it. But history has also showed us that few leaders do what they say when they are in trouble. Seizing opportunity isn’t about speed per se, but agility, the ability to read the competitive landscape, know the market signals, see them faster than the competition, and having the courage to take action.
- Reset priorities and then be ruthlessly focused. It is amazing the number of leadership teams that do not reset their priorities. Bets we were willing to make six months ago are off. It doesn’t mean we aren’t making bets – they have just changed. Now is the time to refocus. This means communicating and executing the “critical few” business priorities so the organization keeps on track.
- Act with a sense of urgency and discipline. More important in a crisis – to mobilize effort, to provide clarity and accountability, to monitor progress and to readjust, if necessary. There needs to be regular and consistent review of where you are. Daily 7 am calls with your leadership team will ensure a greater sense of urgency and accountability.
- Communicate and clarify. Leadership will need to be sensitive to the temper of the times. While agility and focus are important, they will not alone allay the fears and apprehensions of constituents and employees. Great leaders must be clear, confident, and open in a world where transparency is lacking.
- Ensure you have the right leaders, right now, focused on the right bets. Sub par leaders who could be tolerated when things were going well become a huge drain when things are going poorly. Now is the time to focus on leaders with consistent high performance and place them in the roles most crucial to the organization’s survival and recovery. At the same time, this is also a time to be more assertive about removing sub par leaders.
- Tighten up timeframes for accountability. As a sports fan, I am an astute observer of great coaches and many – during a game when their team is getting blown out – will calmly say “let’s focus on the next two minutes.” We think that is wise counsel for business leaders. Break the ‘game’ down into shorter cycles. Business and market cycles are shorter, faster, and demand that leaders review alternatives and take decisive action more quickly. Leaders will get to wins by shortening focus and timeframes.
- Leverage your brand. A crisis is a branding moment for all companies. People tend to develop stronger and longer lasting memories during a crisis more than during the good times. How a company handles layoffs, restructuring, and employee relations in general will be long remembered not only by employees, but by the public and the source of potential talent in years to come. How you handle the crisis can determine how you’re viewed five years from now by potential employees and the buying public.
- Pay attention to your top talent. It is startling to see the number of troubled organizations that fail to pay attention to their best people. They are the ones that will help you weather the storm and recover quickly. We seem to pretend as if they have no where to go. But they do. Savvy competitors will upgrade their own talent by poaching yours. And even if they don’t, your best employees will long remember how they were treated in bad times and will quickly jump ship when they can.