Leadership Qualities Required in A Recession

Written by Laletha nithiyanandan
VP-Asia Pacific Kelly Outsourcing and Consulting Group

Leadership has always been the determining factor for an organization’s continuity and growth in the business world. During different stages of development, an organization has various leadership requirements: a leader qualified to manage a fast-growing organization may not be suitable for an organization in recession. It is therefore imperative for a leader to possess the following qualities that will help an organization break out of the recession.

Positively Communicative

The first reaction a CEO might have in hard times is to drown himself in work and shut himself off from employees, clients and the competitors alike. This alienation not only distances him from the organization but also opportunities to see ways to elevate from situations. This is also the moment where clear and focused directions are needed to drive productivity. Only that, coupled with equally communicative managers, can he then ensure that his directives will be carried out throughout the organization.

Unconditional Ethics

When pressure mounts during bad times, it is easy to seek the self-perceived “faster” way out of trouble. As with the Enron case, leaders that fall into this trap lead their organizations into a downward spiral that may cause its downfall. The ethical and m oral righteousness of the CEO invariably influences that of the organization. While not all ethical moves may be profitable, leaders need to see beyond that to sustain the longer term benefits of reputation and relationships to pull the organization through any crisis. 

Inspiring

Everyone is required to do more with less. "It is even more important for the CEO to understand how to treat his employees with the extra work pressure coupled with the fear of retrenchment that they are now facing. Bruce Barnes, president of consulting firm Bold sums it up best saying, "In times where fear and instability raise their heads, people need someone they can rally around and feel confident in." 

Steadfast

It is always easy to succumb to shareholder pressure and launch ambitious cost cutting plans during bad times. How ever, a CEO needs to really understand the essence of the business; be open to looking at what is needed versus what is not, and what else adds value to the organization before initiating these measures. In an economic cycle, a recession typically lasts 11 months out of 68 months. A myopic short term talent cut, for example, may result in a long-term lost of the organization’s competitive edge, especially when these talents are employed by rival companies.

Open, Creative, Flexible

Finally, Joan Caruso, Managing Director of Organizational Effectiveness Consulting in the Ayers Group believes that, “To an effective leader, a recession is not the coming of an nightmare but is an opportunity to Regroup, Rethink, Replan, Repair, Rework, Renew , and Recommit on a personal and an organizational level.” It is imperative for CEO s to be open to opinions and seek creative solutions to be effective with fewer resources; enabling the company to emerge stronger than before. He must be flexibility enough to look beyond current market needs and at how to grow demand in other areas that are congruent to the business. He will need to be open to alternatives, like downsizing and lead confidently through that, or even to move on if he knows he is not the best fit for the organization. Leaders should see these times as an opportunity to take stock and consolidate internally, and develop talent. Looking and thinking out of the box will allow CEOs to cope with the now and into the future.

The above are just some critical qualities that a leader is required to have; even more so in times of recession. This being said, the list does not make an organization or leader “recession proof”. Having reached the top of the corporate food chain, CEOs should possess the necessary skills to identify what works best for their organisation. However, being in the position of power, many tend to forget what made them successful in the first place. CEO should be even more conscious of the environment and use the recession as a time to reflect on both the organization as well as themselves. As Country General Manager of BTI Consultant, Bernadette Them as comments, “How a leader is, often dictates how he will react in a crisis; it is important for him to constantly improve for the better of the organisation.”