As tensions mount and the economy continues to flounder, many CEOs find themselves in situations they never anticipated. Unable to predict the fallout that has occurred, leaders are now faced with salvaging the remains of their businesses and preparing their strategies going forward.
Peter Warshaw, PhD, vice president of RHR International Company and management psychologist, offers steps both leaders in the c-suite and boardroom can take to cope with their company’s current situation and strategize future plans for the company.
“CEOs think they’ve gotten their arms around the problem, but then the bottom falls out again,” says Warshaw. Warshaw believes that many leaders are focusing on the short-term and are working toward getting stabilized. Top priorities such as succession planning, while always important, take a back seat as companies are seeking to plan short-term strategy as long-term planning can easily fall victim to the faltering eocnomy.
“At the same time, when it’s not working, boards need to make changes,” adds Warshaw.
Warshaw says there are a few fundamental changes that CEOs need to embrace in order to utilize their potential.
- CEOs should lead, not manage;
- Really think through your message;
- Succession planning is out the window—more scenario planning;
- Get help to encourage senior team effectiveness—collective thinking is a must;
- Be both analytical and logical—find the right balance;
- Frequently communicate with employees;
- Don’t isolate yourself: engage with others on your management team/board, reflect with them.
Leadership Goes Global
Warshaw notes that Europe is suffering from the economic fallout just as much as North America. While some aspects of the relationship between the CEO and managing director in Europe are different, a CEO is always seeking trusted advisors to provide counsel.
However, in Asia, the impact of the economic turn has yet to be widely felt. In China, the relationship between the CEO and his/her advisors differs greatly from that of the United States and Europe. “Many companies are family-owned, not public,” says Warshaw. “This creates a very different dynamic.” People who lend advice are either family members or close friends sitting on the board or serving as an executive. We see a similar setup in South American companies and boardrooms.
Above all, Warshaw encourages leaders to listen. “There are some CEOs that are ready-aim-fire… that’s scary. There are also those who are afraid to make a decision under stress,” adds Warshaw. He believes that someone who has the experience and expertise to lead in a positive and constructive way will not fall into extremes. A balance of assertiveness and caution is what makes a leader successful. One who carefully listens and absorbs the advice from his board and fellow executives will be able to endure today’s economic hardships while formulating risk strategies going forward.
“No one has the answers here,” says Warshaw. But he says that those who are doing all the right things will forage through based on their good principles. “And a little luck,” adds Warshaw.