essential management knowledge for today’s leaders
Inside this issue –
Leadership behaviours critical
to coping in times of crisis
An interview with:
Welcome to Management Focus
… and welcome to the September/October issue.
The suddenness and severity of the current economic downturn has inevitably generated a shared sense of shock and
foreboding, and the media’s relentless reporting of the latest bad news fuels this mood.
Business leaders face huge challenges during an economic recession. Qualities such as courage, self-confidence and
the ability to make tough commercial decisions under pressure all come to the fore. However, less widely appreciated
and understood is the crucial psychological and emotional role that leaders must play during periods of acute
uncertainty. Read our featured article to discover which leadership behaviours are critical to coping in times of crisis
and how HR professionals can play a central role.
Dr Ram Charan is a highly sought-after business adviser and speaker, famous among senior executives for his
uncanny ability to solve their toughest business problems.
For more than 35 years, Dr Charan has worked behind the scenes with top executives at some of the world’s most
successful companies, including GE, Verizon, Novartis, DuPont, Thomson Corporation, Honeywell, KLM, Bank of
America, and MeadWestvaco. He has shared his insights with many others through teaching and writing. In this
interview, find out what Dr Charan has to say about his book, Leadership in the Era of Economic Uncertainty, searching
for singles, doubles and home runs, and how to cope during the economic crisis.
Once upon a time, collaboration was looked upon as a nicety. Increasingly, it is now being viewed as a competitive
necessity. There is plenty of literature available on the benefits of collaborative projects between companies, but what
about collaboration within the walls of your organization? Discover more in this latest issue of Management Matters.
To expand on the topics highlighted in Management Focus, log on to our website at http://first.emeraldinsight.com,
where you will find an extensive collection of articles, interviews and executive summaries.
Editors: Alistair Craven
Tel: +44 (0) 1274 777700
Fax: +44 (0) 1274 785201
Address: Emerald Management First
Emerald Group Publishing Limited
Bingley BD16 1WA
http://first.emeraldinsight.com 1 management focus September/October 2009
critical to coping in times
usiness leaders face huge compounded by destructive internal influenced by a prevailing mood of
challenges during economic dynamics and underperformance. anxiety, which gradually dominates the
recession. Qualities such as organizational “system”. Negative
courage, self-confidence and the While leaders may have had setbacks thoughts and feelings predominate,
ability to make tough commercial during their career, most will not have while more positive views become
decisions under pressure all come to experienced a global downturn. They subtly excluded or difficult to express.
the fore. Less widely appreciated face a steep learning curve if they are
and understood is the crucial to succeed in the new business This negative dynamic is exacerbated
psychological and emotional role environment. The support and guidance by pressure on staff to work longer and
that leaders must play during of HR professionals can be a critical harder. Many organizations control
periods of acute uncertainty, if they success factor. costs by cutting resources and jobs but
are to optimize the long-term aim to maintain output. Extra demands
performance of their business. Organizations in a recession are placed on the remaining
employees, who generally feel unable
Leaders must understand the dynamics The suddenness and severity of the to refuse. Frequently they are also
that lie below the surface of their current economic downturn have expected to demonstrate new levels of
organizations and skilfully address the inevitably generated a shared sense of flexibility, covering the work of former
unspoken needs of their staff. This shock and foreboding, and the media’s colleagues or adapting to new working
takes maturity and skill but will relentless reporting of the latest bad methods. This fuels longer working
maximize the chances of weathering news fuels this mood. hours and associated problems.
the economic storm and emerging
strengthened when times improve. Within organizations, negative feelings During a recession, workers are also
Those businesses that do not achieve are compounded as colleagues interact. likely to undergo repeated experiences
this will find their commercial problems In the workplace, all employees can be of loss. This is an inevitable
http://first.emeraldinsight.com 2 management focus September/October 2009
consequence of the cutbacks, project
cancellations, job freezes, redundancies
and retrenchment in which businesses “There are four key behaviours that leaders must
engage to survive.
master in order to provide the workforce with the
A “toxic cocktail” best possible sense of psychological ‘containment’”
Combined, the powerful dynamics
described above form a “toxic cocktail”
that threatens morale and performance. impulse or panic. Leaders should burdened and exposed. HR partners
It generates damaging behavioural and immediately announce that they are who enjoy their leaders’ trust can play a
attitudinal changes within organizations. making the problems their absolute central role here.
Among other things, this leads to more: priority, while explaining that they need
time to finalize the best course of Specific ways in which HR
• short-term thinking; action. professionals can help include:
• presenteeism; Behaviour 2: Honest and consistent • presenting leaders with an analysis of
communication the psychological, emotional and
• absenteeism through sickness, stress behavioural impact of the downturn
and depression; Though reassured by seeing their on their organization;
leaders “in action,” employees will
• addictive behaviours; inevitably be preoccupied with what the • emphasizing the leaders’ role in
downturn means for them. In the helping staff feel contained in the
• rumours; midst of the toxic cocktail of negative
absence of reliable information,
rumours and speculation flourish. To dynamics;
• politics; and
reduce these and build trust, leaders
• identifying, coaching and supporting
• defection of valuable employees. should provide honest and timely
those leaders best able to
information (within appropriate
There is likely to be a decrease in: demonstrate the four key behaviours;
constraints) about the challenges facing
their business and the measures that • identifying those who are struggling
may need to be taken as a result. and, where possible, coaching them
• motivation; People suffer most from uncertainty and to gain insight and behave more
would prefer to know the worst than effectively; and
• clarity around task priorities; imagine it.
• providing an emotional outlet for
• work-life balance; Behaviour 3: Emotional connection leaders to offload their own negative
emotions, whether distress, anxiety,
• productivity; A speedy response and honest
anger or guilt.
communication are not enough to
• innovation and risk-taking; and maximize “containment”. Leaders must
also maintain an emotional connection Looking to the future
• long-term and reflective thinking.
with their workforce. They must:
Together, the leadership behaviours
The psychological role of leaders • acknowledge the painful impact of described will provide a sense of
bad news on their workforce and psychological safety and emotional
This toxic cocktail means that in times resist moving on too quickly to containment in organizations
of great uncertainty it is not enough for something more positive out of undergoing great uncertainty, instability
leaders to address strategic and discomfort, guilt or insensitivity; and often painful change. Leaders
operational tasks. They must also cannot avoid or prevent painful events
address the emotional needs of their • find an authentic way of disclosing affecting their people. However, with the
workforce if they are to improve morale some of their own sadness, concern support of HR, they can take charge of
and productivity. or disappointment so that employees threatening situations with alacrity and
know they genuinely care; and resolve. They can deal honestly with
There are four key behaviours that their people, convey genuine empathy
leaders must master in order to provide • let staff vent their feelings, listen and and create a powerful sense of hope.
the workforce with the best possible empathize.
sense of psychological “containment”. Leaders who achieve this will help staff
This set of behaviours takes Behaviour 4: Inspiration deal more effectively with difficult
considerable insight, resourcefulness The most impressive leaders go one experiences and inspire tremendous
and maturity on the leaders’ part but the step further. While remaining realistic loyalty and trust. They will also succeed
stakes are high. If achieved, they will: about tough conditions, they find a way in focusing the energy of the workforce
to motivate and inspire their followers to on the job in hand, helping their
• reduce anxiety, fear and anger; organizations to emerge successfully
perform. To achieve this, they must
draw on deep reservoirs of leadership from recession when the conditions for
• build trust, loyalty and commitment;
energy, fuelled by a powerful economic growth return.
combination of self-confidence, This is a shortened version of “The
• generate resilience and optimism. personal humility, passion and belief in psychological role of the leader in
the future. turbulent times”, which originally
Behaviour 1: Prompt and considered
action appeared in Strategic HR Review,
The role of HR Volume 8 Number 3, 2009.
When an organization enters turbulent
times, the first behaviour its leaders Few leaders find that these four The author is Catherine Sandler,
must demonstrate is a prompt and behaviours come naturally. For most, Managing director of the Sandler
energetic response to the difficulties they must be learned and practised. Lanz Ltd, London, UK executive
facing it. The workforce needs to know This can be particularly challenging coaching practice.
that its leaders recognize the during tough times, as leaders
seriousness of the situation and are themselves are not immune to the toxic
addressing it. However, the leaders’ cocktail of negative organizational
actions must not be the result of dynamics and many feel anxious,
http://first.emeraldinsight.com 3 management focus September/October 2009
in the Era of
Ram Charan is a highly
adviser and speaker, famous
among senior executives for
his uncanny ability to solve
their toughest business
For more than 35 years, Dr Charan
has worked behind the scenes with
top executives at some of the
world’s most successful
companies, including GE, Verizon,
Novartis, DuPont, Thomson
Corporation, Honeywell, KLM,
Bank of America, and
MeadWestvaco. He has shared his
insights with many others through
teaching and writing.
Identified by Fortune as the leading Ram Charan
expert in corporate governance,
Dr Charan is helping boards go Interview by Debbie Hepton
beyond the requirements of
Sarbanes-Oxley and the New York
Stock Exchange by providing organization. Growth has to be profitable Fyrwald figured this thing out early, got
practical ways to improve their and capital-efficient. Growth companies his team together, got them to see the
group dynamics. Boards, CEOs, always look from the outside in. They new reality and he went in “hands on”
and senior-most human resource search continuously for what the and “head in”.
executives often seek his advice customer wants or will want. These
expeditions help create ideas for growth. Erik helped ensure that the company was
on talent planning and key hires.
Some ideas are incremental or, as they safe from the credit crunch. His fast
say in American phraseology, “singles actions improved cash flow. He
and doubles”. And sometimes some refinanced his debt earlier than most. His
Debbie Hepton: You are the author of ideas are game changers … they are big. actions resulted contra to the prevailing
Leadership in the Era of Economic Unless you search continuously for environment of anxiety: Nalco’s ratings
Uncertainty. Can you tell us about the unserved or underserved needs, you are went up from single B to double B.
book? not likely to find big ideas or what
DH: In your opinion, when do you
America calls “home runs”. Waiting for
Ram Charan: In the last 18 months, the think that we will see a reversal of this
the big ideas alone will not get you
global financial crisis sneaked in. The decline?
world has changed. Leaders must adapt
Ram Charan: The deterioration of the
to this change. The change is deep; it is DH: You state that a leader’s guiding
financial system in America has slowed
volatile, it has caused anxiety. People principle must be “hands on, head in.”
Can you explain what you mean by now. The improvement in the economy is
have felt panicked.
this? lagging behind. The panic has subsided.
The worst is over, but leaders need to The economy is going to respond, but at
prepare for a very slow growth with a Ram Charan: In the dire situation where a low level. While unemployment will
bumpy road ahead and focus on coming there is panic, and the companies are continue to increase, the real US GDP in
out stronger from this recession. Look cash-short, they have to have intensity of the first quarter of 2010 will be flat or
into the eyes of the storm. Confront management to know the daily critical lower than in 2007.
reality. Protect your talent. Provide details of the business – that is “hands
inspiration and sharp focus to the on”. Getting intelligence from the ground DH: During these tough economic
organization and have the zest that you and using information to make timely times, what key piece of advice would
will come out better than anybody else. decisions is “head in”. you give to today’s leaders?
DH: To achieve profitable growth, you DH: Can you provide us with an Ram Charan: The most critical advice for
recommend “searching for singles example of a company that is coping today’s leaders is to master the skill to
and doubles, as well as home runs”. particularly well during this economic recognize what is the change, what is the
What do you mean by this? crisis, and why? What can other speed of that change, what is its nature
companies take from this example? and how to take advantage of it.
Ram Charan: Growth is a social process
and it is a team effort. No basketball Ram Charan: There are a number of This is a shortened version of the
team, no hockey or football team ever companies that have figured this thing interview with Ram Charan. To read a
wins without continuous practice. Growth out. One company is Nalco. They are in longer version of this interview visit
builds the mental muscle of the the water treatment business. CEO Erik http://first.emeraldinsight.com
http://first.emeraldinsight.com 4 management focus September/October 2009
successful strategy execution, yet,
while some collaborative efforts achieve business
spectacular synergies, many actually
backfire – wasting time, money and
resources along the way. In his recent
interview with us, Professor Morten
Hansen from the University of
California, Berkeley, emphasized a key Hansen’s research on 162 top
point that is often overlooked: the goal managers found that only about one in
of collaboration is not collaboration, but five had a collaborative leadership style.
better results. Failing to acknowledge Should we be surprised by this?
this can be fatal. “Without question, my Probably not. Charismatic, autonomous
greatest surprise is that bad leaders have been revered for years,
collaboration is worse than no and promotion is often won on
collaboration. Like everyone else, I demonstrated individual achievement.
started out believing that collaboration “Over the past 20 years we have lived
was a good thing, so more of it should in an era that has worshipped the
be better. But to my great shock I found managers as heroes that ride into town
that some project teams did worse and turn things great … now that one-
because they collaborated.” star model is becoming outdated”, adds
Even a track record of reputation and
Collaborating for success expertise cannot guarantee success. It seems clear that times have to
Hansen cites the paradigm example of change. Consider this extract from “Rx
In today’s bleak economic times, the for pharmaceutical companies: internal
the mp3 music player; a market which
word “collaboration” is making frequent collaboration is the key to improved
many still think should have been
appearances in business articles. innovation”, an article by the IBM
cornered by Sony after its Walkman
heyday. However, it was Apple that Institute for Business Value:
Once upon a time, collaboration was
looked upon as a nicety. Increasingly, it went on to dominate with the iconic
“Increased internal collaboration
is now being viewed as a competitive iPod. Despite having the independent
contributes to innovation at the early
necessity. There is plenty of literature components required for success
stage of discovery and bridges silos of
available on the benefits of collaborative (an established computer line, its own
knowledge, increasing the chances of
projects between companies, but what music division, and hard disk players),
serendipity in drug discovery and
about collaboration within the walls of Sony simply did not have a culture of
improving the skills and knowledge of
your organization? collaboration amongst its divisions.
employees. While these ‘softer’
Their iPod rival failed to topple Apple,
business objectives are difficult to
Most leaders believe that company- and “Sony Connect” – the rival to
measure against the bottom line,
wide collaboration is essential for iTunes – was killed off in 2007.
informed and enabled employees, as
well as serendipitous events, can result
in the type of innovative breakthroughs
that drive real value creation.”
Hansen believes that his vision for
collaboration can apply in any setting,
and will become a reality if companies –
and the individuals within them – treat
collaboration as a perennial issue, just
like “leadership” and “change.” Which
companies will heed the advice and
become masterful collaborators?
If you would like to know more about
what Professor Morten Hansen has
to say about successful
collaboration please visit
http://first.emeraldinsight.com 5 management focus September/October 2009
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Final thought ...
The best way to inspire people to superior
performance is to convince them by everything
you do and by your everyday attitude that you are
wholeheartedly supporting them.