There’s an uncertainty epidemic going around corporate America.
It is becoming a downward spiral of uncertainty, almost an emotional recession. The biggest uncertainty may be how corporate leaders will respond to this.
What’s happening inside some companies is scary. The tone sounds uncomfortably like the tone during the Great Recession. My email inbox is filled with people who still have jobs but not for long, those who’ve lost jobs, or those who have jobs but no confidence in their employer or their job security. This isn’t limited to any one sector. Sure, I’ve heard from folks in oil & gas, and in mining. But I’ve also heard from people in transportation, manufacturing, technology, consumer goods and B2B services.
I could be wrong, but I’ll bet these folks are not at their creative and productive best. They’re not coming up with the ideas or delivering the results that will help pull their companies out of this malaise. Focused on short-term numbers, some senior executives are managing brilliantly but failing to lead. That failure of leadership has made them part of the problem, not the solution. Leaders are spreading the epidemic of uncertainty, not containing or solving it.
From the corporate perspective, the uncertainty itself is understandable. Business fundamentals are weak, not bad; but spending and jobs are being slashed. This has the potential to drive the fundamentals from weak to bad, in a self-fulfilling prophecy.
In some ways, the uncertainty epidemic is a rational response to macro-economic and macro-political news. There’s a lot of bad news, a lot of hard questions, and very little good news. The hardest question is “Where will demand growth come from?” No one has a good answer to that. All the conventional answers are used up. Many American consumers sat out the holiday retail season. China has stopped driving growth and creates new causes for worry every day. Europe keeps getting new challenges (like a million refugees) piled on top of a still-incomplete recovery and a tottering EU. When China slows, Africa and Australia come to a screeching halt. South America is retreating into its historic stagflation. Oil prices are a perfect embodiment of the epidemic: we seem to have gotten the costs of lower prices (regional and sectoral collapses) without the stimulus benefits.
Government tools and actions provide no solace. In the US, a presidential campaign like no other conflates personalities, partisanship and policy. It’s like watching a train wreck – except you’re on the train. No one can sit in the US, watch the news or debates, and have great faith that economic solutions will come out of the next combination of President and Congress (and certainly nothing will get done in the next year while this plays out). Fiscal policy is hardly likely to be used to stimulate growth in most of the world, given budgets, demands and deficit hawks. And monetary policy? When US rates just went up – to 0.5% – and Japan is already offering negative interest rates, there’s not much room left.
The question is, how do leaders respond to this uncertainty?
Maybe it’s time for leaders to remember the lessons of the Great Recession. That’s true both for those who lead from above, from the board or C-suite and those who lead from below, from the tattered remnants of middle management.
If you play any kind of leadership role in your company, ask yourself:
- Am I visible? Don’t hide. Don’t travel the world from meeting to meeting while avoiding your own people. Stop and talk with them. You’d be amazed how fast word will get around. In a world of social media, the best way to have impact is to start being social; the media part will catch on quickly.
- Am I being transparent? Nothing sucks morale out of an organization like people disappearing without notice. Finding out that your colleagues left by having your email to them kicked back is not helpful or constructive. Finding out about leadership changes by seeing who has been Photoshopped out of the picture on the company intranet feels like North Korea, not like a healthy company with a good future.
- Am I simplifying or just cutting? It’s easier to cut budgets or people. It’s harder to cut processes. Cutting staff and budgets while leaving all the processes intact is self-defeating. It leaves fewer people working harder to do things that may not need to be done. Use this uncertain period as an opportunity to clean out that bureaucratic clutter and clean up your processes.
- Am I focusing on the future? Don’t deny the present uncertainties, but put time and effort into thinking about the future – and be visible when you do it. Give your people a reason to believe there is a future. The lesson of the Great Recession is clear: if you wait until the time is right to think about the future, it’s too late. Your competitors will have gotten there first – and kept their best people in the process.
- Am I supporting my line managers? They didn’t get you into this, but you’ll need them to get you out of it. Every time you ignore one of the lessons above, you make it harder on your managers who have to suck up the budget cuts, look people in the eye and tell them that their pay has been frozen – or that they are laid off – and still deliver results. Give them tools not more burdens. Help them reduce their bureaucratic load, and help them motivate their people. Lead, don’t just manage.
None of that will change the macro-uncertainties. But it can make a real difference in whether you avoid the emotional recession, keep your best people and survive this epidemic of uncertainty.
[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners. To share this post, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]