Friday, April 22, 2016

7 Leadership Tips When The Business Is Struggling

Richard-LindenmuthIt’s easy for an entrepreneur or a CEO to feel like a leader when things are going well, but the challenge is to keep that confidence and drive in the face of economic downturns, business turnarounds, and stressful personnel situations. Working twenty hours a day, losing your cool, and falling back to a no-risk strategy are not conducive to long-term success.

I saw some practical tips for business leaders under pressure a while back in the book “The Outside the Box Executive,” by Richard Lindenmuth, a seasoned interim CEO, who has stepped in and revitalized more than his share of struggling companies. I’m convinced that his advice is equally relevant to early startups, where the challenges are legion and the path is far from clear.

I agree with Lindenmuth that emotional intelligence and stability is a must in these environments. He calls it strategic empathy, which is sincerely focusing on the individual, but always with the big picture of the business as top of mind:

  1. Expect anxiety on the team and deal with it directly. When things are not going well, or when the future is clouded with unknowns, expect to find people on the team who are scared and angry. You have to act quickly to communicate strategy, be the role model for calm, and stand up to outliers before the whole team becomes dysfunctional.

  2. Let them say no, and actively listen to team input. Of course, no leader wants to hear negative views, but it’s important to show empathy and reach everyone on an emotional level, while containing your own emotions. People need to know that it’s safe to express their opinions. Once you get beyond the negatives, most people have real contributions.

  3. Focus on team members who will tell it like it is. In any organization you will find people who will tell you what you want to hear, or who are fighting for their own survival. Although you must listen at every level, the best leaders look carefully for that middle ground or middle manager that can see the big picture and effectively implement change.

  4. Don’t send a representative in lieu of direct contact. Lack of your physical presence is read as detachment, or lack of leadership. Direct contact, to people at every level, is the best way to generate trust, respect, support, and action. A recipe for failure is assuming that you can deliver a message once, and get it passed down by subordinates.

  5. If you see something broken, fix it now. Decisive action inspires confidence. People’s perception of your leadership and trustworthiness is directly related to your word-action alignment and behavioral integrity. Show them what you expect, and people will follow your example. If everyone is fixing problems with confidence, the business will prosper.

  6. Everyone has to pull their weight in the same boat. Create an environment that encourages and rewards participation and progress, with no penalties for missteps. Define a common goal, such as improving the customer experience, and eliminate any contention between the internal towers of development, marketing, and sales.

  7. Practice the eight out of ten rule. Generally, out of ten ideas, eight are not usable, but that’s the only way to get to those two good ones. So welcome all suggestions and praise every attempt, which will encourage more ideas. This may also be stated as the Pareto principle, where 80 percent of the results come from 20 percent of the efforts.

When the business is struggling, it also makes sense to bring in outside help for a fresh perspective. This could be a peer, or independent business advisor, ideally one who has been through a similar kind of struggle in their business. The best leaders put aside their pride and emotion, and listen carefully to guidance from outside the organization.

When real change is required in business, a unilateral top-down business leadership strategy is rarely effective. Successful CEOs and entrepreneurs instead listen, learn, empathize and include everyone in the challenge. With their leadership, and everyone invested in the company’s survival, the odds of success go up dramatically. Are you ready for that really tough challenge?

Marty Zwilling

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