Written by
Changeboard Team

Published
18 Jan 2010

What leadership lessons have we learned from the recession?

18 Jan 2010 • by Changeboard Team

Leadership as a whole - smart leadership

Organisational life has become more complex, diverse and uncertain. It's likely to become a lot more complex, diverse and uncertain. Consider how global our economy has become. More players from around the world will be entering markets and competing successfully. Well see new technological breakthroughs which could alter everything. Were running out of valuable natural resources. We could go on

When the economy does recover, there are other critical areas which may take a bit longer to get back to normal. One key area is trust in organisations will employees, customers and other stakeholders ever trust again?

Uncertain times call for whole leadership. Whole leaders use their head to set strategy, their heart to connect with the world and their guts to make instinctive and intuitive decisions based on clear values. The smart leaders who successfully combine these skills are well placed to take advantage of the opportunities the new, volatile climate presents.

The head, heart and guts model of whole leadership was first defined by Peter Cairo, David Dotlich and Stephen Rhinesmith in their 2006 book: Head, Heart and Guts: How the World's Best Companies Develop Complete Leaders. In 2009, the authors followed this up with Leading in Times of Crisis: Navigating Through Complexity, Diversity and Uncertainty to Save Your Business. The authors draw on research and interviews with leading global CEOs and academics to explore leadership Challenges in an increasingly complex, diverse and uncertain world.

Cairo, Dotlich and Rhinesmith observe that the economic crisis has caused leaders everywhere to rethink their business models, and to reconsider what creates value in the mind of the customer. The authors also highlight the importance of engaging employees so that others are inspired to take ownership of new business models and to create new customer experiences.

Authentic leadership

From a whole leadership perspective, leaders need to line up their head for strategy, use their hearts to understand their people and then have the guts to tell the truth, even when it is inconvenient. The more uncertain the world becomes, the more we want our leaders to be straightforward and real. Employees today want authentic leaders who are open and honest, who mean what they say and live what they believe. These leaders can engage employees and inspire them to take ownership of organisational change and to build a successful future.

Authenticity will be a prized leadership quality in the year ahead. The current climate has caused many leaders to make decisions and to behave in ways which have caused an enormous erosion of trust among employees. Many people are now afraid to speak up in their organisations. They fear for their jobs and their future. How can we as leaders create climates of trust? How can we motivate employees again?

Maybe youve had to cut back operations or make people redundant. How did you handle it? Did you feel you dealt with it positively and communicated difficult decisions effectively so that others understood, even if they werent happy about the decisions? Or do you feel there were things you could have done differently? Either way, you can learn from your experiences. The chances are that youve been forced to step outside your comfort zone. This has probably taught you quite a lot about yourself.

You may have learned to trust your gut feelings more to make instinctive and intuitive decisions. Perhaps youve learned how to inspire others to follow your vision, even when following that vision has been difficult. You may have learned how to hold on to talent in your organisation through building trust in adversity and to develop that talent even when resources are tight.

Employee engagement - how to engage employees

The ability to engage, inspire and motivate employees is more important than ever. For organisations to survive in uncertain times, leaders need to make brave and bold decisions. Enthusing others to follow and to make strategy a reality is key to success. There are some practical steps you can take to make this happen.

  • Leaders need to relearn how to create a climate of trust and involvement. Employees are typically more sceptical and more wary than they were before the crisis. To increase trust, engagement and commitment to new strategic priorities, leaders need to engage with employees and other stakeholders.
  • From a whole leadership perspective, you need to use your head to define a clear vision. Communicate your vision clearly and focus on the Benefits that following this vision will bring. 
  • Use your heart to connect with people. Build relationships with others and develop a network of change agents to build engagement across your organisation. 
  • Finally, use your guts to help others believe. Tell the truth, even when it is inconvenient. Create a cause which people can believe in, and encourage a climate where individuals feel free to speak up without fear in pursuit of that cause.

Leadership Lessons learnt

So as we look ahead at our uncertain future, lets reflect on some of the leadership Lessons weve learned. I suggest that one very important lesson, and one that is key to engaging employees, is that work is not all about money. Most people seek purpose in their working lives beyond financial security. During a recession, many people dont see salary increases or bonuses. However, people can feel rewarded in other ways, such as feeling that they are an important part of their organisations future. So by communicating and discussing your future goals, and giving others responsibility for achieving these goals, you will develop an engaged and motivated workforce. 

Trust in yourself, and trust in others. Be brave and bold, and explain why. Encourage others to Challenge you and build a climate of trust and respect. For most of us, the year ahead wont be easy but what we can hope for is that we truly learn from the Challenges that we faced in 2009 and actually apply the learnings in 2010, to create a sustainable and rewarding working environment.