Leading in tough times

30 Jan 2009|Lee Shupp

Tough times test leaders. Turbulent economies amplify the decisions of leaders, both good and bad. Good judgment can help a company thrive even in rough times, while bad judgment can be lethal in a an environment of thin margins and little room for error. It’s been interesting to observe several of the Titans of Tech over the past couple of weeks, to see how leaders act under pressure.
I’ve been paying lots of attention to the leadership of three companies: Apple, Yahoo, and Microsoft. The companies have very different cultures and leadership styles. What can we learn from watching them?

Here is what I’ve noticed in observing three Titans of Tech: Apple, Yahoo, and Microsoft.

Apple- visionary, mercurial leader who is a marketing genius. But Steve Jobs loses points on two counts: transparency and team. He has been less than forthcoming about his health, which has everyone assuming the worst. Worse, he has not developed and encouraged a strong team that the public knows, to show the strength of Apple’s culture and the smarts of its people. There is no clear succession plan in place, which has the market wondering if Apple can thrive sans Steve. I think that Apple can; there are plenty of very smart, highly motivated people there. But these are mistakes of leadership that we can learn from.

Yahoo- committed head Yahoo Jerry Yang created a great company, but has not shown decisiveness in making the tough calls that the company needs to make to thrive. The company has avoided making hard decisions and focusing on core businesses that it can win in. Enter Carol Bartz from Autodesk, an outsider with little knowledge of Yahoo’s business, but known for decisiveness. Obviously the board thought that an outside perspective and ability to act trumped familiarity with Yahoo’s business. There are many smart, creative people at Yahoo; I hope they succeed.

Microsoft- super salesman Steve Ballmer is steering the company through tough times. He’s done a good job of communicating with confidence and in taking decisive action. He has also shared the spotlight with other upper execs in the company, showing a strong bench. The challenge for Microsoft is creativity; can the company continue to innovate as it becomes more formal, more structured, and more like the old IBM? The company prides itself on data driven decision making, but this can inhibit creativity and innovation. Another company with many smart people, many of them very creative.

What can we learn from these leaders? How can we take the best of what each does and guide our own companies and teams?

First, transparency is important. When times are tough, people look to leaders to interpret the events around them, make sense of the chaos, and point the way forward. Good leaders are honest, clear, and human. Honest is telling it like it is, without sugar coating bad news. Clear in cutting through the clutter and communicating the core challenge at hand. Human is revealing the emotions we are all feeling as we go through this turbulent time.

Second, confidence is key. It’s easy to be overwhelmed by the barrage of bad news. It’s easy to feel powerless and dispirited. Good leaders tell it like it is, but project confidence that they understand the environment, and know what to do. Chaos creates opportunity that smart companies take advantage of. Many of today’s strong companies were born in economic downturns, including HP, Microsoft, and many others. Now is the time to play smart, identify opportunities, and pounce when the time is right.

Third is decisiveness. Good leaders are not overwhelmed and confused in challenging times. The provide clarity and confidence, and are able to act quickly and prudently. This has been the Achilles’ heel of Yahoo, a company paralyzed by a floundering business and a falling stock price. This is a time when tough calls have to be made, but good leaders make the best calls they can, with clear rationale for decision making, execute on those decisions, and move on.

Fourth is creativity. A new environment calls for a fresh perspective, a willingness to quickly adapt as conditions change. It’s easy to retreat into structure and the way things were, seeking some kind of order to counter the chaos around us. But retreating into the old ways of doing things can be deadly. Now is the time to rewrite the rulebook, keeping what still works, and throwing out what no longer applies. Creativity is key in adapting quickly to changing conditions.

Last is team. This is not the time to be the stoic hero fighting the world alone. We are surrounded by smart, creative, motivated people who want to pitch in and help. Good leaders listen to good ideas, motivate the troops to action, and guide action to make sure that it is focused, coordinated and effective. Turbulent times provide a setting for motivated people to shine, and it is the smart energized people in a company who are its most powerful asset.

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