Five Action Steps to Help You Lead in Times of Economic Crisis
The economic crisis is presenting leaders with unforeseen challenges. Many of those leaders are not prepared to respond effectively. They have either never been trained to do so, or they have no real-life experience on which to draw to help them navigate their way through this crisis. Unfortunately, this is exactly the time when these leaders need to lead.
A former boss used to tell me that "every crisis is an opportunity." I've had a lot of opportunities since my entire career has been spent in healthcare, an industry that has been in crisis mode for the past 20 years. In that time, I've learned how to turn a crisis into an opportunity. Here are five actions that enable leaders to do the same:
1. Focus on the problem at hand. An organization can only have ONE No. 1 priority. Today's economic crisis is clearly that priority, which means we have to temporarily stop focusing on less-important things. We can't afford distractions. Look at your organization's strategic plan, objectives and timeframes and decide what the organization will stop doing. Look at your calendar and decide what you will stop doing. Time is a leader's most precious asset. During a crisis, many leaders will keep their normal schedule and just add more hours to their day. This is a short-term strategy that is not sustainable over the long haul. Once you have narrowed the priorities for you and your organization, share this information with your organization.
Don't hide from a crisis and hope it will go away. No matter the strength of your organization's balance sheet, the economic climate can quickly turn assets into liabilities. Every day you do not focus on this crisis and its impact on your organization is another day further behind you'll be in responding.
Employees and key partners are waiting for decisive action, both from the organization and from you. They will welcome and respect your decisions. Success will take your undivided attention.
2. Stick to your guns. Never compromise on values. In a crisis, you may be tempted to do things that are not consistent with your values. Your honesty, integrity, courage, and commitment to excellence are critical values that can guide you through uncertain times. One reason we are in this economic crisis is because many leaders focused on achieving quarterly earning projections or their own incentive compensation goals and they bent the rules to achieve the desired results.
Studies confirm that employees do not trust or think highly of their leaders. That doesn't mean employees and key partners still don't look for someone they can believe in.
I have witnessed the power of leadership integrity in my own career. Years ago I was a new CEO of a hospital that had to lay off 120 people. I called a town hall meeting to announce the job cuts. Keep in mind that the employees had a reputation for being very "anti-administration." During the meeting I shared the current financial situation and the impact the layoffs would have on the future performance of the hospital. At the end of my presentation there was silence, then a question or two. Finally, an employee said to me that "this was the first time someone has told us the truth so we can understand our situation." What followed was a complete surprise – applause! From that moment on my executive team enjoyed a great working relationship with the employees because they felt we could be trusted.
3. Stop digging. It's an old saying–"When you are in a deep hole, stop digging." During an economic crisis you need to learn which products or services are profitable and which are not. For the money losers, find out what's causing the problem (don't guess!) and address the issues. Make the hard decisions to correct what can be corrected quickly. The longer you delay the more cash you will burn through.
Most organizations have kept certain products or services around too long. Eliminate these first. Those that have recently turned unprofitable and whose potential for future profitability is low should also be quickly eliminated. Do it at once so the organization can grieve the loss of the employees associated with those services and move on. Incremental elimination of programs or services will confuse employees and create unsettling conditions.