Ten commandments for leaders in tough times

Report provides insight from top CEOs about communicating during downturn.

During September and October 2008, The Company Agency Leadership Council spoke to 14 leaders in business and public life about leadership in tough times (see the box, below, for a list of contributors).

Respondents were asked simple questions about the skills required by leaders in a downturn, and according to the report's authors "the answers provided fresh proof to the classic definition of good advice: common sense, backed by the authority of experience."

martin newman Observations from the results
"Our first observation is that there’s never been a better time to, in the words of one of the CEOs we interviewed, talk to other people. And that’s what this report is all about: sharing perspectives at a time when perspective is the most valuable commodity in circulation," says Martin Newman (pictured, right), Partner at The Company Agency.

Analyzing the results, The Company Agency was able to identify a set of "10 Commandments for Leaders in Tough Times":

Be honest with yourself
Be visible
Tell it like it is
Be clear
Stick to Plan A wherever possible
Be tough
Use confidence to create confidence
Balance enthusiasm and experience
Seize the opportunities
Learn to cultivate peripheral vision

"Combining the predictable with the provocative, we hope the 'commandments' will serve as a useful checklist for leaders and all those who advise them," says Lord Janvrin, Chairman of The Leadership Council.

Read on for a summary of the report and find out how to download the full report at the end of this article.

Business leaders included in the report findings:
• Richard Beck, VP, Group Communications Director, HSBC
• Iain Ferguson CBE, CEO, Tate & Lyle
• Karen Geary, Group Di rector of HR and Corporate
Communications, The Sage Group plc
• Neil Golightly, VP Downstream Communications, Shell
• Val Gooding, Former CEO, BUPA
• Paddy Harverson, Press Secretary to HRH The Prince of Wales
• Hugh Harvey, MD, Comet
• Jason Howard, CEO, Willis Re International
• Francisco Lanzas, Chairman’s Office, Santander
• Simon Lewis, Corporate Affairs Director, Vodafone
• Charles Miller Smith, Chairman, Asia House
• Leo Quinn, CEO, De La Rue
• David Richards, Chairman, Aston Martin
• Simon Walker, Chief Executive, The British Private Equity & Venture Capital Association

1. Be honest with yourself
An atmosphere of urgent immediacy makes it particularly difficult to find space for calm reflection. At the same time, the need for it has never been greater: when the climate changes, the likelihood is that you will need to re-evaluate much of what you have until now taken for granted.

This advice, however, comes with a caveat: as one communications leader told us, never fool yourself into thinking that you can reinvent yourself totally. The balance between on the one hand remaining true to yourself, and on the other hand being radically honest about the implications of what’s changed, is perhaps the toughest and most fundamental challenge for leadership.

“The first priority for outstanding leadership is absolute intellectual honesty. When your answers come up in a way that confounds your intellectual thinking, you’ve got to have the rigorous discipline to accept that, even if the new argument makes everything you’ve said up to that point seem foolish.” - CEO
“You need sound analysis, a full understanding of the potential threat or changed environment, and you need to map that onto your core business competence. Understand the external market and the internal reality and never fool yourself into thinking that you can totally reinvent yourself.” - Communications leader
“One has to be dispassionate and take a very rational view of the business. The danger is of being the frog in the beaker: if you drop the frog into boiling water it jumps out, but if you heat the water gradually the frog just gets used to it and is boiled alive. You have to stay a little detached and formulate a ruthless assessment of the health of your business and the relevance of your customer proposition.” - CEO

Some danger signals:

You’re rejecting an idea because it’s unfamiliar or alien – not because you’re convinced it’s wrong.
You have learned to live with something you saw as a major problem yesterday, instead of fixing it.
You’re doing something to please shareholders without thinking about the impact on your customers or suppliers.

2. Be visible
It’s a truism that leadership isn’t leadership unless you can see it. For years, in our coaching sessions at The Company Agency, we have impressed on leaders – political and commercial – that they're the embodiment of their brands. When people are in a room with them, their personality, behavior and words are the brand – for good or ill.

At moments of uncertainty or perceived danger, visibility becomes hugely important. An interesting dimension of this is the emphasis repeatedly laid on showing up in person: as one Communications leader put it, people want to look into the whites of your eyes. But beware: everything is under maximum scrutiny, every twitch of ... facial expression is interpreted.

“People want to hear from you, and the signal they get if they don’ t hear from you is that you’re in a bunker or you’re fired!” – CEO
“Employees don’t like vacuums. They make things up to fill them. People like to feel connected and engaged with what’s going on, so now is the time to engage more with employees, to listen to what they are saying (remembering they're generally the people closest to customers).” – Communications leader
“It’s a brilliant opportunity to avoid the dependency on media and technology and go back to the basics of face-to-face leadership communication. So often communication starts to involve complex mass electronic communication, but in a downturn people want to look into the whites of your eyes. You need to be out there on the shop floor, in the town hall meetings, face to face with the folks.” – Communications leader

Some danger signals:

You're spending more time with your advisers than with employees.
You spend most of your communications time fighting rumors.
"All user" mass emails are your new favorite channel.

3. Tell it like it is
Honesty, it seems, really is the best policy: a professional in the financial sector told us, it is about treating people like adults. Many go further: it’s not good enough to tell the truth, you have to make every effort to tell the whole truth – get all the bad news out ... and tell it as soon as you can. UBS, and for those with longer memories British Airways, are classic examples of the dangers of drip-feeding bad news.

A deeper insight into the internal value of telling your employees the truth is that any idea that their leaders are not being straight with them immediately undermines all trust and motivation. Don't underestimate the value of giving people the basic reassurance that you get it, and you're doing something about it.

“People hate to feel that they are being left in the dark, but also they are realistic about the fact that you won’t have all the answers. Just be honest about that.” - CEO
“Tell them the truth and tell it as soon as you can. Get all the bad news out quickly, don’ t drip feed it for months. If you have to lay off a quarter of staff, tell them: don’t cut 10% and then come back again and again for further reductions. Years back, British Airways went through a period of ‘shark’s teeth’ downwards share price movement because of this gradual chipping away at problems rather than taking decisive root and branch action.” - Chairman
“We need to learn the art of honesty. For example, in a merger everyone knows there will be layoffs, but we don’t always make that clear. Telling people there will be a reduction in headcount, what criteria we will be using to make those decisions, in fact treating people like adults, is vital. Attempts to bury bad news almost always backfire.” – Communications leader

Some danger signals:

When reviewing a message, your main priority is to work out what you can get away with not saying.
You believe that letting the full truth emerge gradually will be less damaging.

4. Be clear
Clarity at a time of extreme uncertainty sounds as though it could be a counsel of unattainable perfection. If the rules have changed and yesterday’s impossibility is today’s probability, where can we look for clarity? The answer may lie in Escoffier’s great command to chefs: Faites Simple, or in corporate speak, Keep It Simple Stupid. Clarity, simplicity, repetition, a strong and relevant narrative: these are the themes which emerge time and again.

Clarity at a time of extreme uncertainty sounds as though it could be a counsel of unattainable perfection.

Narrative is particularly important: you don’t get a sense that the business world has come out to explain clearly what’s going on and what is being done to make things better. That vacuum remains to be filled and we believe the rewards for the first leaders to be able to articulate such a narrative will be substantial.

And narrative has a fundamental role to play in creating alignment: if you’re not telling a single compelling and credible story, you won’ t be able to fight the 15 negative stories that are being told about you.

“It’s about both being very transparent about what’s going on, and presenting a vision of what the future will look like. Keeping everybody knowledgeable, and preventing them from panicking, is incredibly important.” - Communications leader
“You don’t get a sense that the business world has come out to explain clearly what’s going on and what is being done to make things better. People want to know how we’re going to get out of this. There’s a lack of leadership.” – Communications leader
“This is the moment to watch out for internal and external dissonance. People will believe more what third parties say about us than what we are saying about ourselves. When gaps appear between those two, that needs resolving urgently.” - CEO

Some danger signals:

There are 20 things you need to say and they’re all equally vital.
Immediate actions are more important to communicate than context or consequence.
You won’ t say anything until you’re certain about everything.

5. Stick to Plan A wherever possible (but have the courage to move on when it’s not)
The temptation to abandon strategic ship can be intense. Don’t. Assume that your Plan A has the strength and flexibility to work in changed circumstances, and then test that assumption in action, before moving to Plans B, C and beyond. Your course may change but your destination should not, in the words of a communications leader.

The value of consistency, of knowing your strategic strengths and of doing as much as possible to continue to play to them, should not be underestimated. Doing so, and telling people that you're doing so, can be hugely reassuring. Clearly this comes with a caveat: if you do stick to the original plan, make sure you tell people why – otherwise people may think you're in corporate denial.

“It’s vital not to be shaken from your central purpose by temporary problems. Know your long-term strategic plan and stand by it. Don’t be panicked into sudden measures or announcements.” – Chairman

It’s vital not to be shaken from your central purpose by temporary problems.
“You have to be very flexible, hang loose. There may be times when you absolutely have to sit on your hands, not panic, not rush into cutting jobs – but you must be aware there is a crisis at your doorstep and that you need to act.” – CEO
“You need a certain amount of balls and confidence in your stated aims and strategies. As the atmosphere and context changes, it’s easy to panic, to succumb to the temptation to change course. You need clear thinking in order to navigate through.” – Communications leader

Some danger signals:

You’re worried that restating previous strategic positions will make you look stupid.
Your big idea to solve today’s problems is by shelving long-term investments.

6. Be tough
One major opportunity for leaders is that tough times create a license for an approach which can be dramatically more robust than would be acceptable in more normal circumstances. As one CEO told us, in a crisis, there’s less time for consensus. That does away with ambiguity and allows you to move fast and decisively. Knowing how and when to take that opportunity is as valuable a skill as knowing how and when to return to normality.

As one CEO told us, in a crisis, there’s less time for consensus.

“A well-run business will become more efficient: more objective about poor performance, more selective in taking on additional costs, more prudent in its decision making process.” – Chairman
“Now is the time to focus on performance. When things are difficult you can’t carry passengers. We have some redundancies in our own business, and we have been surprised with how vague performance management has been. We need to be much more clear about what is expected, driving the accountability culture, a lot less open ended with things and a lot more direct.” – Communications leader

Some danger signs:

You won’ t move on this until you have total team alignment.
You believe that challenging people to be more accountable may fatally de-motivate them.

7. Use confidence to create confidence
In a normal environment, you can and should encourage a more open, self-critical culture, where leaders encourage challenge, and can show vulnerability: not so in a crisis. Leadership calls for a somewhat counter-cyclical approach, showing the real strength and calm confidence when it’s really needed, and otherwise keeping a more subtle approach, and letting your senior team flex their muscles.

To call today’s business environment a confidence game may sound cynical. But so much of leadership is simply that: the creation of confidence, by exuding confidence. Unless there’s substance behind that, of course, the results can be disastrous (as we’ve seen in the markets).

So much of leadership is simply that: the creation of confidence, by exuding confidence.

But without confidence, you don’t stand a chance. Even the most cerebral and objective of your internal and external stakeholders will almost certainly be more emotionally swayed in tough times: recognizing that emotional dimension, and feeding it with a sense of solidarity and confidence is vital.

Knowing how to use this double-edged sword lies at the heart of leadership in tough times. Showing vulnerability, a devastatingly effective leadership behavior in happier times, only sows doubt and fear in times of difficulty.

“Optimism is vital. Remaining optimistic and communicating optimism. Shackleton should be our role model!” – CEO
“When things are failing around you, the last thing you want is to see a leader wobbling. You need to show strength of character, clarity of purpose, and decisiveness.” – CEO
“You need to create a strong idea that you are in control, that you are not simply at the mercy of external events. Get your people engaged in the issues facing the business and use their resources to help you.” – Chairman

Some danger signals:

You feel that communicating positives will be seen as glossing over the truth.
You feel it’s important to show your personal vulnerability.

8. Balance enthusiasm and experience
The need to maintain youthful energy alongside the wisdom and caution of experience has never been more apparent. One Chairman expressed this in terms of an opportunity to broaden our management briefing, ensuring a better two-way flow of information and ideas
between senior management and a new generation.

Others repeatedly pointed to a deficit in mentoring and coaching – both as a potential cause of some of today’s problems, and as an opportunity to put them right. Not surprisingly, there is some tension between this and our sixth "commandment" to Be Tough and have the confidence in moving fast and decisively. Of such tensions, and knowing how to live with them, is leadership made.

“The board must be kept up to speed: much more information, much more regular meetings, much more hands on involvement. Use their experience and also understand that the whole climate of corporate governance has changed overnight.” – CEO
“The average age of a CEO has dropped. Checking back through the history of the business, and talking to people who were in your business in the 80s and 90s, having the humility to pick up the phone and ask what they did and how they coped is no bad thing.” - CEO
“People with experience have a huge coaching role. People are seeking out mentors that they respect. We’ve been working on using the stories of senior leaders for training and development, so our people can learn from the experiences and lessons of a Chairman or a CEO.” – Communications leader

Some danger signals:

You're convinced that this situation is wholly unprecedented.
You don’t have the team who led your business in the 80s on speed dial.
You’ve stopped listening to junior management.

Everyone is focusing on the negative issues, it’s too easy to ignore opportunities.

9. Seize the opportunities
Opportunities come in many forms at times of crisis. Opportunities to develop human potential through "battlefield" experiences; opportunities to put big business back in touch with its entrepreneurial roots; opportunities to make big, important, long-term decisions that have never been properly confronted; and, as one Chairman pointed out, opportunities to launch or re-invent a business career. You can only go up.

“Everyone is focusing on the negative issues, it’s too easy to ignore opportunities. Entrepreneurial spirits will focus on those.” - Chairman
“This environment is an incredible learning experience. There will be ways of doing business that are demanded by the current circumstances which can improve the health and strength of the business going forward.” – Communications leader
“Hard times force us to focus and think objectively. We’d all like to think that we do this on a continuous basis, but the reality is we need a jolt. The actions we need to take aren't just for the short term, they are about survival for today and for the future. This environment creates the stimulus to make the right decisions.” – CEO

Some danger signals:

You can’t stomach anymore risk.
You see front-line positions for key people in your business as a poisoned chalice in the current climate.
You secretly wish you’d taken early retirement earlier this year.

10. Learn to cultivate peripheral vision
Most of our "10 Commandments" are deliberately simple and blunt: our final commandment isn’t. We call it peripheral vision: the systematic discipline of being aware of what’s happening at the margins (of business, of consumer behavior, of society at large) and training your mind to ask "What if?" – what if something currently marginal swiftly becomes mainstream? Without that, the mental flexibility to respond to the unexpected is likely to be limited in the extreme, and practical preparations for the unexpected probably non-existent.

Scenario thinking, as a fundamental leadership discipline, appears from these findings to be woefully underused. Yet the need for "peripheral vision" is perhaps the biggest single learning that we can take from the events of the past few months.

However, we frankly query whether right now leaders have the time and space to do such broader thinking. Our advice is that, if you can't focus right now, make sure that when normality returns you come back to this as a basic long-term insurance policy against groupthink and linear perspectives. And, in the meantime, perhaps get a little help from people who can do this for you.

“A few months back it would have been tempting to say that there has been an improvement in how people plan, with better tools and greater ability to assess large volumes of information. That analysis just doesn’t stack up today.” – CEO
“People think of scenarios in too simplistic a way – for example how to cope with an immediate tactical crisis like a bomb. They don’t think in terms of seismic changes which impact the business model such as the economic landscape, technology, consumer behavior, an economic gravity shift from west to east. We should try not to be so linear or blinkered. We need to create a culture of wider thinking.” – Communications leader
“Maintaining a neutral and challenging mentality is vital. It’s very easy to fall into the trap of thinking 'we just can’t do that'. You have to look to the future and call the future, and you have to do that objectively.” – CEO

We should try not to be so linear or blinkered. We need to create a culture of wider thinking.

Some danger signals:

You pride yourself on having no areas of ignorance in front of the board.
You think more about what you may be able to sell in the future than about what people will want to buy.
You can’t imagine a scenario in which the key inputs to your business are switched off.

Download the full report from The Company Agency's website.

(Email to order further copies.)

Have your say
Point 7 suggests that "so much of leadership is simply that: the creation of confidence, by exuding confidence". Do you agree? Has this method worked at your organization? Do you advise your leaders and managers to be more confident to inspire positive thinking at your firm?

Share your thoughts below on this, and the other points collected in the Company Agency list.

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