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Leadership in Challenging Economic Times
 

Leadership in Challenging Economic Times

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AchieveGlobal recently investigated how leaders are reacting to economic turmoil by conducting a research study with 250 managers in March 2009. The intriguing results of the survey are showcased in ...

AchieveGlobal recently investigated how leaders are reacting to economic turmoil by conducting a research study with 250 managers in March 2009. The intriguing results of the survey are showcased in our quick read.

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    Leadership in Challenging Economic Times Leadership in Challenging Economic Times Document Transcript

    • AchieveGlobal SurveyAnalysis: Leadershipin Challenging A BUSINESS ISSUE QUICK READEconomic TimesLeaders are employees, too. Like their teams, • 75.2 percent of companies have cut About AchieveGloballeaders also feel the sting of daily business discretionary spending. In the 21st century, the level of humanevents: shriveling market demand, budget cuts, skills will determine organization suc- • 65.2 percent have stopped hiring.office and plant closures, insolvency, and round cess. AchieveGlobal providesafter round of layoffs in nearly every sector. • 51.2 percent have frozen pay. exceptional development in inter- • 49.8 percent have laid off employees. personal business skills, givingY sad to say, leaders also suffer in other ways. et, • 20 percent have cut working hours. companies the workforce theyLeaders alone face the daunting task of keeping need for business results. Locatedother employees engaged and productive – in • 19.6 percent have reduced employee benefits. in over 40 countries, we offerspite of non-stop bad news and visceral threats • And 15.2 percent have closed locations. multi-language, learning-basedon every side. solutions—globally, regionally, Abandon All Hope?Just how challenging is their role? What are and locally. In several clear signs of flagging organizationalthey able – or unable – to do to keep employees hope for a quick economic recovery:engaged and productive? We understand the competition • 59.6 percent of leaders predict a hiring freeze you face. Your success depends onAchieveGlobal set out to answer these and through 2009 people who have the skills to han-related questions in a recent survey of 250 lead- • 43.6 percent expect downsizing or layoffs dle the challenges beyond theers, from shop floor to C-suite, in a range of in 2009. reach of technology. We’re expertsindustries. in developing these skills, and it’s Even more unsettling, of leaders whose companyOur findings underscore the ferocity of today’s revenue actually grew in 2008: these skills that turn your strate-economic firestorm as well as the practical gies into business success in the • 62 percent report cuts in discretionary spending. 21st century.ways that leaders attempt to deal with theaftermath. • 55 percent report a hiring freeze – little different from companies whose revenue These are things technology can’tLike a hundred-year forest fire, this global crisis shrank or remained flat in 2008. do. Think. Learn. Solveoffers a unique if unwelcome chance to see how problems. Listen. Motivate.leaders perform in the most menacing econo- Further, leaders report widespread spending Explain. People with these skillsmy in 75 years. cuts for employee recognition, training, new have a bright future in the 21st projects, R&D, and innovation. century. AchieveGlobal preparesLet’s Get This Straight: It’s Bad you for that world.No one needs to tell us the recession is wide Sudden Impactand deep – but how wide and how deep? Predictably these depressing trends have a depressing impact on productivity and morale:46.8 percent of leaders in our survey say theircompany’s revenue has declined – 22.6 percent • 21.1 percent of leaders say that productivity hassay the decline is “significant” – in the past 9-12 decreased in the past 6-12 months.months. In response: Developing the !"st century workforce TM
    • • 54 percent say that stress is a problem or severe problem for What Leaders Do – And Apparently Can’t Do their employees. Leaders identify several ways that they try to boost morale • 48.4 percent of leaders say that stress is a problem or severe and productivity – whether by talent, by training, by hook, or problem for them. by crook: With similar frequency, leaders report problems or severe prob- • 70.4 percent say they “motivate employees through ongoing, lems with employee conflict, turnover, and morale. positive communication.” Further, in companies with declining revenue, 1 in 4 leaders say • 49.2 percent say they “offer special recognition for employees who that disengagement is a problem – twice the rate of organizations perform well.” with increasing or stable revenue. • 40 percent say they “hold fun events at or away from work.” When we look at responses by level, we find major deltas between • 38 percent say they “offer non-monetary incentives or rewards managers and directors on one hand, and executives on the other. such as time off.” For example, 14 percent of managers and directors report “poor • 24 percent say they “offer monetary incentives.” employee morale.” Only 5.5 percent of executives report this • 5.6 percent say “my employees don’t need more motivation and problem. their morale is good.” How should we interpret such differences? Several forces may be • And, thank heavens, only 5.2 percent say they “do nothing.” at play, including: • Managers and directors are closer to the front line and more likely Still – given serious issues with employee stress, conflict, turnover, to see the symptoms of poor morale and other employee problems. morale, and disengagement – we point out that our survey meas- ured the frequency, not the effectiveness, of the leadership skills • For a range of reasons, managers and directors may and tools listed above. be reluctant to share this news with executives. In particular, we identified at least three areas in which leaders Some Positive Signs would clearly benefit from new knowledge and skills: Not quite offsetting our gloomier findings, the survey finds a few • While leaders cite positive communication as the top way to positive trends: motivate employees, low scores on the impact of communication indicate that leaders could be doing a much better job. • 51.6 percent of leaders report increased company communication about the local impact of the flailing larger economies. • 46 percent of leaders say that recognition has actually declined in their company – a sad fact when verbal recognition requires no • 52 percent say that company communication emphasizes money, just a few skills and the will to use them. opportunities over challenges. • With productivity declining in 21.1 percent of the companies • 66.4 percent say that top leadership is honest with employees surveyed, leaders clearly need to rethink priorities, re-assess about challenges and plans. employee workloads, and retool systems and policies for a More good news: Only about 20 percent say that leadership is less smaller workforce. open about the company impact of the recession. The Strategic Take-Away But in part due to the severity of the recession, it makes sense Our survey clearly spotlights the value of continued coaching that only 20.4 percent of leaders say that company communica- and development of leaders at all levels, executives no less tion succeeds in answering questions or easing fears. than supervisors. In addition, this disconnect between the amount and the impact of Today’s slow-motion global catastrophe in fact drives up the value communication points to weakness in the content, methods, or of skilled leaders, engaged themselves and able to engage other skills of communication. employees in immediately vital work. While they can’t halt or reverse the course of global events, skilled leaders at all levels can rally employees to protect the organization until this economic firestorm finally burns itself out. World Headquarters 8875 Hidden River Parkway, !"st400 Developing the Suite Tampa, Floridacentury workforce TM 33637 USA Toll Free: 800.456.9390 www.achieveglobal.com© 2008 AchieveGlobal, Inc. No. M01253 v. 1.0 (4/2009)