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Wednesday, April 21, 2010

Leading in Rough Seas

Victor Fung of the Li and Fung Group (the Chinese multinational founded in Guangzhou in 1906) summed up well the sense of the kind of change we face today:

‘A lot of people say, hey, this is a once in a century type of problem. We haven’t had anything like this since the 1930s. You hear all these statements, and they seem to imply that this is once in a lifetime, after I get through this one, boy, am I glad I will never have to face this again. But I’m not so sure. I think we are seeing both the compression of cycle time – how quickly the cycles come and go – and also the amplitude of the swings getting more and more severe. The world has fundamentally changed.’

This type of change requires a special kind of leadership. In Leading in Turbulent Times (Financial Times Series), Kevin Kelly and Gary Hayes have collected the lessons learned from over thirty CEOs, Chairmen and other senior executives who are prevailing in spite of a challenging environment. It’s a valuable look at how some frontline leaders are finding the right balance between seizing the opportunities as they present themselves and managing the accompanying risk. 

Rather than typical conversations focused on financial matters, Kelly and Hayes found that three strong messages emerged from their interviews:

Passion Rules – these leaders are driven by a real passion for their business, their organisation and the people they work with.

Hard Times Call for a Mastery of Soft Skills - especially communication but also empathy, mentoring and coaching. (“This is a timely reminder that cost control is a business basic, but extracting great performance from people is always based on more complex and subtle motivational tools than pure fear.”) A CEO in Germany observed that whenever a leader talks about change, employees always expect the worse. Learning to motivate and engage people in spite of the crisis becomes critical.

Think Long Term – these leaders refuse to bow under immediate pressure. They use short-term pressures to harden their focus on long-term objectives.

Infosys CEO Kris Gopalakrishnan says, “We need to be much more flat, creating a collegial team-based leadership style so that you can leverage a lot more of people’s intellects and capabilities and make them participate in decision making.” This requires a level of social skills that hasn’t been demanded of leaders in the recent past and so this also necessitates a lot of learning-as-we-go. At the same time we have a more educated workforce that brings with it other issues that require fresh approaches. Henry Fernabdez, CEO of MSCI Barra observed, “They figure things out very quickly. They tend to be more open to change but, on the other hand, they’re smart and can become cynical and harder to change.” As a result, the job of leadership is changing.

Through revealing and personal interviews, Kelly and Hayes have analysed the current situation beginning with how to recognise the early signals, mobilising people to act, navigating a new course, preventing "mutinies" by engaging the resistors, and learning to be flexible in the face of the unpredictable.

To live in these turbulent conditions requires that you dig deep. Leaders need to develop and constantly improve; a deeper self-knowledge; new perspectives. As they note, this isn’t easy. “It is a bit like trying to get fit when you are in the middle of a title fight.” A positive mental attitude is critical says Mark Frissora of Hertz.


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