Recession Leadership: Be Real, Communicate, And Look Ahead

Fast Company has an interesting Q&A with Ram Charan (author and management guru) about leadership in an economic downturn. My first post about managing in a recession, Lead Your Company Out Of A Downturn, was based on an article in Fortune Magazine by Charan.

I really liked Charan’s answer to the question: What is the biggest difference between the leaders who will be able to pull through and those who won’t?

There are three differences in the leaders in these circumstances. The first and foremost is defining realism, and then taking the actions now and not postponing them. The second thing is orienting people on the new reality with superb communications–internally and externally. And the third, coping with the toughness of the existing environment, but positioning the business to change the game after the storm.

My take: Take to heart the three things Charan prescribes for leaders in a recession: realism, communications, and future-orientation. It captures the essence of these great quotes by GE CEO’s:

The bottom line: Recessions require even more leadership.

Jeff Immelt On Managing In A Downturn

I found an excellent discussion with GE’s CEO Jeff Immelt about how GE’s top managers should deal with the downturn. Here’s some of his advice:

Keep your company safe but keep building the future… Leadership is an intense journey into yourself. It’s about how much you want to learn. It’s about how much you want to give. It’s about personal change and just being ready to renew yourself every day.

Other valuable tidbits from Immelt:

  • While cost-cutting will be a priority in some businesses (e.g., financial services), GE plans to “pour it on” in other areas (e.g., renewable energy, clean water technologies, and fuel-efficient jet engines and locomotives).
  • Invest in the future to keep employees motivated. Rather than creating a sense of hopelessness, give people a sense that they can create a brighter future.
  • Immelt gave these specific words of advice to his leadership group:
    • Be decisive
    • Be accountable
    • Be transparent
    • Be a unifier
    • Be willing to change yourself

My take: I really like Immelt’s thoughts about the downturn; maybe because they’re similar to what I’ve said in previous posts :-). The one thing that I’d add to his list of advice is: “Be listening.” During a recession there’s more need than ever to listen to customers (to stay in tuned with their shifting needs and priorities) and employees (to address their needs and concerns).  

The bottom line: You can manage your way through a recession or lead your company out of it. You decide.

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