LEADERSHIP DURING THE RECESSION

Our media appear to delight in debating the issues surrounding our economic downturn; but for business organisations in 2009 times are tough. Are your business leaders equipped with the right skills, behaviours and leadership style to ensure your organisation succeeds during the recession?

The economic downturn will present business organisations with huge challenges. We are operating in uncertain times. Trading conditions are at best difficult and potentially very uncertain. Global exchange rates are varying dramatically, and no-one is sure how long or how deep the recession will be.

Yet companies wish to remain competitive and profitable to ensure they deliver on shareholder and customer expectations. To do so will undoubtedly require change.

Throughout Boardrooms across the country discussions are taking place on the revision of business plans and corporate objectives. For many organisations restructure, cost cutting, consolidation and/or downsizing will be on the agenda.

Against this background of uncertainty and economic downturn one question should be asked amongst all the debate and discussion. Will your business leaders, who steered your organisation through the growth years, be equally successful leading the company through markedly different conditions?

Many of today’s business leaders do not possess senior management experience of leading a business through a recessionary environment. The last fifteen years or so have seen very different economic and market conditions to those we are now facing and are expected for some years to come.

We believe that at differing phases of the corporate lifecycle, organisations will require a different blend of skills, attitudes and leadership styles in their key business leaders. Imagine you were responsible for organising a sea voyage throughout the polar region to explore potential new sources of energy. Would you select a Captain for the ship who had previously succeeded in such difficult maritime conditions, or would you choose a Captain who normally steered cruise ships through the tranquil Caribbean waters? It is self evident that different leadership skills are required for different trading conditions.

The graphic below suggests some of the varying skill sets and attitudes required for differing phases of corporate growth and development:

The principle leadership skill set and attitudes that will best suit an organisation undertaking a high growth programme of corporate expansion will differ markedly from those required to lead an organisation through a downsizing and cost reduction exercise.

Yet how many organisations take this into account when recruiting or promoting their business leaders? In fact, often the opposite takes place. Because a senior manager has performed well during recent years, is often the very reason that individual is promoted to take on increased responsibilities. Rarely do business organisations consider the external environment and the likely future trading conditions when they are recruiting at senior levels.

It is our contention that business organisations should take account of these external trading conditions and particularly, their phase of the corporate life cycle before setting our to recruit or promote senior business leaders. The business pages are littered with examples and evidence to support this view. How often have you heard about a previously successful corporate leader being ditched by the Board because current results were disappointing? Has the individual changed? Has that corporate leader lost his/her touch? Perhaps. However, more often than not, it is the external trading conditions that have changed, which in turn, require a different set of skills and leadership styles.

The message is clear. When recruiting senior business leaders, it will always be vital to consider the candidate’s background, experience and track record. However, a significant additional consideration is to align the principle leadership skill set and personal attitudes with the current phase of the company’s strategic development.

Mr Guy Newton

The Corpex Group Ltd

consult@thecorpexgroup.com