management
                                  focus
essential management knowledge for today’s leaders




 Inside this iss...
Welcome to Management Focus
           … and welcome to the September/October issue.

           The suddenness and severi...
Leadership behaviours
           critical to coping in times
           of crisis
           B
                    usiness...
consequence of the cutbacks, project
           cancellations, job freezes, redundancies
           and retrenchment in wh...
Leadership
                                                       in the Era of
             Ram Charan is a highly
      ...
Management
         Matters                                                                                     Incisive
 ...
Emerald Management First is an award-winning online resource
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Management Focus Sept Oct 2009

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Management Focus Sept Oct 2009

  1. 1. management focus essential management knowledge for today’s leaders Inside this issue – September/October 2009 Featured article: Leadership behaviours critical to coping in times of crisis An interview with: Ram Charan
  2. 2. 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. Best wishes, Debbie Hepton http://first.emeraldinsight.com Contact us Editors: Alistair Craven acraven@emeraldinsight.com Debbie Hepton dhepton@emeraldinsight.com Customer service: emf@emeraldinsight.com Tel: +44 (0) 1274 777700 Fax: +44 (0) 1274 785201 Address: Emerald Management First Emerald Group Publishing Limited Howard House Wagon Lane Bingley BD16 1WA United Kingdom http://first.emeraldinsight.com 1 management focus September/October 2009
  3. 3. Leadership behaviours critical to coping in times of crisis B 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
  4. 4. 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 • morale; 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. and 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
  5. 5. Leadership in the Era of Ram Charan is a highly sought-after business adviser and speaker, famous Economic Uncertainty: among senior executives for his uncanny ability to solve their toughest business problems. For more than 35 years, Dr Charan an interview 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, with 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? continuous growth. 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
  6. 6. Management Matters Incisive commentary on topical successful strategy execution, yet, while some collaborative efforts achieve business issues 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 Hansen. 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”[1], 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/interviews /hansen.htm Note 1. www-935.ibm.com/services/uk/igs/pdf/ esr-rx-for-pharmaceutical-companies.pdf http://first.emeraldinsight.com 5 management focus September/October 2009
  7. 7. Emerald Management First is an award-winning online resource designed to help you circumvent the unnecessary and sharpen your focus on what really matters in management. We bring you the latest and best ideas from the world’s top companies and business schools and present them in a language that your organization will understand. Quality and topicality are guaranteed, as is our objectivity as an independent publisher. A balance of practical articles, case studies and thought-leader insight equips you with a powerful management tool-kit for the twenty-first century. For more information visit http://first.emeraldinsight.com/about “ 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. Harold Geneen http://first.emeraldinsight.com

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