Audacity will lift the gloom
Responding to tough times requires more than retrenchment. As a manager, you need to renew the purpose and sustainability of your company. Psychologist and entrepreneur Steve Carter explores 'audacious leadership'.
Does your organisation have the strength of leadership to meet the challenges that it currently faces? Is it focusing on the three critical factors that will make a difference over the coming months? Or is the leadership question quietly being dropped from view?
Some days it feels like there is an economic tsunami of bad news and ill omen heading in the direction of business. Senior managers live in a real and desperate fear of their organisations being swept away or at least severely damaged. The instinctive reaction is to draw back, cut investments, cancel projects, retrench, pull back from the shore to a place that feels more safe and secure, build the stockade, and cancel Christmas. Without doubt some of these steps are necessary. But are they enough?
This instinct to draw back can create a siege mentality where people reduce activity and energy levels. Organisations can become hypnotised by the enormity of the economic forces bearing down on them and in the process fail to mobilise the increased motivation and entrepreneurial activity that is a survival essential.
Organisational resilience in these times requires a fast, clear-headed distinction between things you cannot impact upon (usually external to the organisation) and the things you can impact upon and shape (usually internal). One of these internal factors is the quality of leadership, which is going to be tested like never before.
Some years ago my company Apter International was about to launch a major change programme with a FTSE top 20 company to establish a new style of leadership. With two weeks to go I was called to see one of the members of the board, a seasoned warrior of the ups and downs of the British economy over more than 30 years.
"Market conditions are getting very tough," he told me. "We are going to have to lose about 600 managers and following that drive through some big structural readjustments. I am not sure of the 'optics' of running a leadership programme in the middle of all this. Do you think we should postpone?"
"It rather depends upon when you need the leadership," I said. "In the crisis or after it?"
He looked at me, his reputation as a corporate leader on the line. A couple of years from retirement, no need to take risks, no mark left to make, no kudos to be gained from controversy. Then he said: "Let's do it, we need to."
Ambition will win
The challenge of difficult times demands great leadership, to build resilience and foster the passion that will maintain and improve performance, when everything seems uncertain and threatened. For those organisations that can deliver this, the prize is greater sustainability through a commitment to a common endeavour, loyalty and an ambition to defy the times.
What can we say about leading people in tough times? There are massive levels of uncertainty and leaders know that, inevitably, they will be the bearers of difficult news that will have personal and emotional consequences for other people. Quite often we have heard senior managers - undoubtedly under this pressure - let a note of resentment creep into their speech. They perceive that other people do not take the situation seriously enough. While understandable, this is dangerously unreasonable. It is the responsibility of leaders to provide the undeniable call to action. They must provide a clear momentum for change and maintain the confidence of people to pursue it. This is 'audacious leadership'.
Audacious leadership develops the mindset in others so that under pressure the organisation can function as effectively as possible. It captures the opportunities that exist for tackling the fundamental changes the business needs. There are three critical elements. Leaders need to ensure:
- people accept they cannot stay where they are - sometimes known as the 'burning platform';
- people are motivated towards some future 'motivationally rich vision';
- people feel able to meet the very human needs for control and influence by operating within a 'small manageable world'.
First, it is important to realise that one key condition for the change required is on offer - sufficient evidence to convince people that they cannot stay where they are and must change.
The burning platform
Time and again in history, tough, straight talking has been an essential requirement of leadership. What must not be offered is false comfort through pretending things are better than they really are. This immediately undermines the 'burning platform' that leads people to change. Potentially, when what is said is discovered as an incomplete or over optimistic account, it builds a dangerous sense of helplessness in which people do not trust what they are told. A realistic appraisal of the situation is required - no rumours, no exaggeration, no unrealistic assumptions. This is difficult to do well - the author of 'Good to Great' called it the Stockdale Paradox after the US Admiral who was tortured for years by the Vietnamese.
Survival in those terrible conditions depended upon the ability to focus on a positive end point, while being ruthlessly objective about what is actually happening now.
"You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be."
British Prime Minister Winston Churchill hit the nail on the head in 1940: "I have nothing to offer but blood, toil, tears, and sweat. We have before us an ordeal of the most grievous kind. We have before us many, many months of struggle and suffering… You ask, what is our aim? I can answer in one word. It is victory. Victory at all costs. Victory in spite of all terrors. Victory, however long and hard the road may be, for without victory there is no survival."
Being honest with people is respectful and affirms that dealing with the challenges is an 'adult with adult' activity.
A motivationally rich vision
Once you have got employees to accept that they have to jump from a burning platform, it is not unreasonable for them to ask 'jump where?'.
A few years ago we were working with the top 20 managers of a pharmaceutical business that was up for sale. The question hung in the air: "Would the purchaser take the assets - mainly a few brands and some intellectual property - and lay off all staff and sell the buildings? Alternatively would the purchaser retain some of the research capability and some of the staff that went with it?" The sword of uncertainty hung over them for months during the interaction with several potential suitors and due diligence. The key question was how the team could maintain for itself, and for the business, the commitment and energy to keep creating value.
At first the team was overwhelmed by the situation. There was a feeling of hopelessness and, even worse, pointlessness. There was a sense that nothing could be done until the sale and its consequences were established. This was a real moment of truth for leadership, as the very act of waiting and hanging back would in itself destroy value and make one alternative more likely than the other.
Gradually, over a few difficult and intense conversations, the chief scientist who was also the acting CEO developed with the group a much deeper and richer picture of their purpose. It became about: building individual and organisational capabilities, the possession of which would positively influence the outcome, and which would be of benefit whatever happened; honouring and protecting the great work the company had done; ensuring that everyone was given the best chance they could have; challenging what was expected of people in this position; comradeship.
This captured people's imagination and there was overwhelming determination to 'build' something memorable from this situation.
The result was that, in the end, although the company was sold and broken up, the individuals emerged much stronger and more positive and the acquiring business secured much more value.
The lessons for us from this remarkable experience were that often the most negative circumstances can produce remarkably positive opportunities. Adversity can be a chance for renewal. This can be achieved through gathering the business together around values and vision that go far beyond the transactional goal/reward relationships that so many organisations have drifted into. These tough times may arguably be the time to ditch the dismal legacy of Managing for Value and similar approaches which left the impression in many people's minds that the single imperative of their coming to work was to make shareholders richer.
This is not to gainsay the centrality of shareholder value but to recognise the motivational narrowness of the argument. People are not likely to fight for business just to keep shareholders happy. People rise to the challenge of organisations that engage their heart and purpose, and given that organisations in these times need more not less from their people, creating this is a leadership imperative. Building this richer proposition for employees harnesses the reality of the change required and calls upon the fundamental human qualities of curiosity, self-sacrifice, passion, resolve and personal loyalty.
Audacious leaders use threatening times to refashion their followers' relationship with the organisation - establishing, in the potential chaos, the seeds of a collectively motivating future. In doing this they build the resilience of the organisation within the current situation and use the opportunity to drive through the changes required for a more sustainable future. How they do this is a complex mix of role-modelling, straight talking, clarity of purpose, emotional intelligence and the inclusive ability to involve people in the action.
A small manageable world
In tough times a leader needs to tackle this sense of helplessness by finding ways in which people can develop some sense of confidence in what is happening. Leaders need to build, what the psychologist Michael Apter has called a 'protective frame'. (A psychological evaluation of a situation in which individuals can perceive that the threat of trauma can be managed or transformed into excitement.) This is why we find fair ground rides exciting, go bungee jumping, and do almost any risky activity.
The potential is that, with a protective frame, difficult times can be turned into a source of excitement and adventure that in turn enhances the motivational proposition.
How does an audacious leader build a protective frame? The key is to give followers the chance of feeling more in control of their destiny by helping them develop a 'small manageable world'.
An audacious leader strives to make sure that everyone's focus is on those manageable activities that can be controlled, or at least influenced, rather than fighting against those that can't. The organisations that suffer and fail will be those that waste energy and spirit, railing against the unstoppable inevitabilities of market and economic forces. Those more likely to thrive will ruthlessly devote their energies to the things they can shape: call rates, efficiencies, time to markets, share of wallet, etc.
The same is true at an individual level. There is a sense that individuals have been conditioned into a rather passive state when faced with change. Perhaps this has arisen from the 'stress and well-being movement' but the default position for individuals when they realise they can't change a situation is to seek coping strategies. These can range from relaxation techniques or the reframing of the situation as unimportant.
The missed opportunity, and the one that can really make a difference, is the middle territory between having the power to change the situation and managing the reaction to it - this is the area of contribution - how a person is involved in the change. Leaders can work with their followers to identify changes to roles that make jobs more interesting, more exciting, or more stretching. They can work to develop followers' competence so that they are more able to deal with new demands. This builds a protective frame based upon feelings of mastery and influence, a much more energetic place from which to tackle tough times.
A focal point for colleagues
Audacious leaders work to give their followers a sense of manageability by focusing them on the things they can impact upon, by offering richer more exciting roles and the chance of development. They give people the power and authority to make choices. This is psychologically empowering and it offers the important flexibility and quick decision-making essential in dealing with ambiguous times.
Somewhere along the road of organisational history we have lost the adventurousness that enabled businesses to start up, often from the smallest of beginnings, to expand and grow. In tough times it is vital that this is rediscovered.
It will require leadership that makes it clear why and where people have got to change; that provides a future that engages motivation and develops the confidence that people can, within understandable limits, shape and influence what is happening to them.
Steve Carter is author of the 'Road to Audacity', a Fellow of the Royal Geographical Society and a psychologist. He has worked globally as a consultant with some of the world's leading organisations including HSBC, SABMiller, Oracle and the Economist Group. He is CEO of the international performance development consultancy Apter Development LLP