A good leader in times of economic crisis

A good leader in times of economic crisis

By Jose J. Ruiz | Alder Koten

What a difference context makes in our perceptions of leadership. After 9/11 I once asked a group of friends from New York what they thought of Rudolph Giuliani. They unanimously replied that he was a great leader – decisive, assertive, and determined, with the ability to inspire a sense of security in a time of fear and crisis. When Mayor Giuliani later ran for President, I asked the same group the same question. They then said, again unanimously, that he was a weak leader – stubborn, hard-headed, and prone to making unilateral decisions.

In a context of immediate crisis, Giuliani’s character and management style had made him appear to be an exemplary leader. However, that changed when the context shifted from an immediate crisis to the challenge of leading a nation of many voices and political differences over the long term. What they had once seen as decisiveness and assertiveness struck them as inflexibility.

Certainly, decisiveness, assertiveness, and determination are typically cited as essential traits for a great leader. So are integrity, intelligence, self-confidence, and – in the world of commerce – general and industry-specific business acumen. Our work at Alder Koten with boards and CEOs shows there are other often overlooked traits of leadership that enable leaders to stand the test of time. A series of recent conversations with leaders and others confirms it. It is these traits, coupled with the other more obvious leadership qualities like decisiveness, which are particularly valuable in times of profound and prolonged crisis like the current recession.

“The key is adaptability,” says Gilad Langer, Product Strategist, and Technical Leader at Camstar Systems, a leading provider of enterprise manufacturing execution and quality systems. He explains that people who are continuously perceived as great leaders adapt to what is required to remain effective and influence the teams they lead. As business technology consultant Gary Clarke, puts it, “The qualities of leadership that are respected and admired by others shift with the demands of time and as the group’s needs and perceptions shift as well.” About the current economic situation he says, “Right now, someone who can demonstrate empathy, clarity and sacrifice would be nice to see as opposed to greed and aloofness.” George Dakos, Managing Director of Stedima Business Consultants, Athens agrees. “The great leader,” he says, “should be able to act as a beam of courage and optimism for others when they are hit by the crisis blues.”

However, that does not mean that employees want to be shielded from the truth. Most people, when asked what they expect from their leaders in times of economic crisis, say they want honest communication and transparency. Avi Singer, Director of Organizational Development at Undertone Networks, an online advertising network, calls it “sincerity.” He points out that people would much rather hear bad news, prepare themselves, and act rather than live in anxiety. As an executive from a Fortune 100 company observed after she was laid off: “I am concerned about my future, but I am grateful to the organization for the way they went about doing things. The public announcement regarding cuts was made on Monday. They told us who was being laid off on Tuesday, and on Wednesday the CEO announced it was over.”

Many people agree that empathy, transparency, and other traits that provide comfort and stability are what employees want in their leaders now. However, a leader’s responsibility goes beyond what people want now. Leaders must also bear the burden of balancing current needs against the needs of the future, a balancing act that requires courage, especially in times of economic crisis. Says Kevin Kelly, who was CEO of Heidrick & Struggles, “Courage in leadership is about making decisions that are for the benefit of the organization over oneself.”

As these conversations indicate, these uncertain times call for leaders with a subtle mix of characteristics. They must provide comfort and stability, show empathy, exude optimism, proceed transparently and sincerely – all while making difficult decisions, taking courageous action, and decisively guiding their teams. That is a tall order, but we’ve seen it fulfilled time and again by great leaders in times of crisis.


About Alder Koten

Alder Koten helps shape organizations through a combination of research, executive search, cultural & leadership assessment, and other talent advisory services. Our recruiters and executive search consultants bring to the recruiting process an in-depth understanding of the market conditions and strategic talent issues faced by clients within their particular industry. Our leadership consultants provide advisory services that are crafted to be collaborative, responsive, pragmatic, and results oriented. Focused on expanding the capabilities of the organization through talent.

Jose Ruiz is also involved in executive search work focused on board members, CEOs and senior-level executives; and consulting engagements related to leadership and organizational effectiveness helping clients create thriving cultures.