Leading in Tough Times – Some Perspectives : Feature Article; V3 Issue 1

In easy times resources are relatively abundant and the environment is relatively stable. Employees are excited, committed and eager to contribute. Potential customers are cash rich and are willing and able to buy your product. You can reasonably assume what works today will work tomorrow.  In difficult times the opposite is true and the business is challenged on multiple dimensions. What this essentially means is that in tough times leaders need to review and re-calibrate their leadership stance to sustain energy in their companies and to ensure their companies continue thriving.


Sustaining the energy

Let’s begin with the balance required between optimism and critical skepticism. In easy times, it is the leader’s responsibility to be skeptical when everyone around is getting excited and thinking everything will work. Being skeptical enough to ensure that passion and drive find effective and productive channels, works in good times. In difficult times, you need to lean towards the other end ie., keeping hope alive and reminding everyone about the numerous possibilities. Grounded optimism, reinforced with data keeps team energies buoyant. It’s a delicate balance to strike – grounded optimism which convinces the team, not exaggerated optimism that makes the rest of the organization skeptical. Stay credible enough to persuade. And also be inspiring.

I like this example of inspiration. At the end of World War II, Japanese business leader Matsushita stood before a gathering of his dejected, demoralized workforce, in an occupied country, with all the company’s inventory taken by the occupying power. He spoke about how taking the lead in quality and innovation and low prices would force competitors to do the same and “in 250 years would eliminate poverty in Japan.” He sat down to silence. Then, one by one his employees stood up, some with tears in their eyes, and said “I think I could dedicate my life to this.” Much of Japan’s progress can be traced back to moments like this in its history. As a leader you must also leverage the power of a shared purpose in these tough times.  Focus energy on long-term goals, especially stretch ones. Goals set a direction. Every day, people will think of that goal and how to move towards it. A stretch goal is like the Star. If you keep your eye fixed on the Star, you aim high and challenge your abilities - you may not reach the Star. But you will also go farther up than someone who is looking only at the apple on a tree. In difficult times, stretch goals look even more unattainable than they do in easy times. You will find people throwing up their hands, saying “That’s impossible! I’m just going to stay focused on the apple.”  As a leader, watch out for this tendency and help them deal with it.

Now in the process of reaching for the Stars there are bound to be mistakes. Adding to that, the cautious sentiment slows responses to changing environmental conditions, stress levels are higher and mistakes tend to get magnified. Also mistakes are more often visible since the world is less forgiving, now. Make your people realize how in such times, it is even more important that we handle mistakes and disappointments well. Mistakes are part of learning how to be effective in the current context.   If we handle a mistake well, the penalty is small. If we mishandle it say by covering it up etc then the penalty can be severe. Honest mistakes are not avoidable and rarely will they destroy a company. But not dealing with them in an honest and straightforward manner can have far reaching negative consequences for the company. Feeling less valuable, less knowledgeable, and less effective are likely outcomes of making more mistakes.  And this can sap productivity. As a leader, you can help ensure that those perfectly normal feelings do not interfere with your team members’ ability to contribute. Ensure your people retain confidence in themselves.

Another thing that can happen is infighting. When budgets are tighter, it is quite common to see employees becoming defensive, territorial, and competitive. Intensified negative politics at all levels can sap valuable energy and focus, causing a failure in meeting the challenges of facing external threats from competitors, customers, and suppliers. So, create more opportunities to bring your people together, encouraging questions and healthy discussions.

When the going is good there is money to spend on training and benefits, career growth opportunities exist, monetary rewards are strong. Limited business growth impacts all of them and employees may feel financially challenged.   Let people know that "we are in this together." You must also make sacrifices if you are asking or expecting your people to do so. Consider the example of Delta Airlines. While the senior people at most airlines took bonuses amidst record losses, the CEO of Delta Airlines turned down his yearly salary. This prompted a business column to say that Delta was "least likely" to go out of business of all major U.S. airlines. So, say a big ‘NO’ to any management bonuses while initiating layoffs.

Talking of layoffs, in tough times, employees get nervous about job security, career progress and sustainability of company operations. When things are going good, employees hearing about them through newspapers is fine. But bad news should always be conveyed by insiders first. Leaders should keep the channels of communication wide open, keeping people informed about what is happening and how the company is responding. When rumors do emerge, respond promptly. Communicate more than usual and more than you think you need to. During tough times employees need to see more of you. Taking regular rounds and chatting up with employees is essential in such times to be more visible and accessible. There is the story of Xenophon, a Greek military leader in 400 B.C.E., who believed in the value of making himself accessible to even the lowest ranks of his men. With the Athenian army in danger of imminent attack and its back to a raging river two of Xenophon’s foot soldiers managed to locate a river crossing that would allow the army to escape. Because of the trust between the leader and his followers they went directly to Xenophon with their discovery. Xenophon took immediate action, and the army succeeded in escaping.

Now I know I have not touched upon the business aspects in our discussion. I leave that to the management strategist. But a clear opportunity exists to align the entire organization for efficiency. Improve the coordination and alignment of departments, strengthen performance tracking and review mechanisms, focus on waste management, lean principles etc.   Leaders should frame an agenda and meet with key stakeholders to gain support and build commitment to efficiency goals.

More than ever be curious, become aware - to understand and deal with your company’s situation better.  You need fresh ideas to help you respond to the new challenges and opportunities effectively. Read more broadly than before. Be alert for trends, ideas and approaches that you have never explored before. Question your assumptions. Always ask yourself: “What if…” and explore possibilities.  Connect with leading thinkers in your industry.  

Lastly a word on values and culture, Ok maybe more than a word. Under tough conditions, typically rational people can start to act in ways that are self-destructive and dangerous for the organization. In such scenarios organization’s values and culture can protect against this. A person previously good with maintaining client relationships may now start focusing more on squeezing the client rather than considering the best interests of the client. But a company that values client progress will be able to discourage such behaviour. In difficult times leaders have to pay even more attention to the values and culture of their organization. One way to do this is by a leader personally responding to changes effectively.


Personally responding to changes effectively

Your assumptions dictate your personal response to changes. Personal responses predispose you to certain behaviors or practices. Your behavior sets the tone for the behaviors of other people in the organization. This is how your company’s culture is formed. Hence responding effectively to any change be it recession or some other crisis is essential. Lee J. Colan, Ph.D. in his article ‘Here We Go Again Leading in Tough Times’ describes the following three common personal responses of a leader to change, with corresponding alternate and effective responses for each one.

Exemplary leadership
The most striking leadership we have seen in recent times has been the way Barack Obama ran his election campaign despite being faced with many challenges. Business leaders can draw lots of lessons from the way he organized and led his campaign team.

  • Obama created a grassroots movement by building an ever expanding organization of empowered leaders, who in turn engaged people from their social networks like Facebook.

  • The entire organization was aligned around a single goal of electing Obama as President, a reaching for the Stars goal.

  • Everybody operated with common values - "Offer messages of hope, don't denigrate our opponents, refuse to make deals".

  • Campaign leaders subordinated their egos and personal ambitions to the greater goal. Those who deviated quickly exited.

  • Obama set a clear, consistent tone from the top and never wavered, even when things weren't going well.

  • Obama's greater mission transcended internal goals, such as fundraising, endorsements, and campaign events. Each of these areas had goals tied to the greater mission.

  • The campaign team used the most modern Internet tools to communicate, motivate and inspire people and to guide their actions. Each day, 5 million people received personal messages from campaign headquarters or even Obama himself. This organization collaborated across a wide range of geographies and campaign functions, all tightly integrated nationally and executed locally.



There are several ways to lead differently in tough times. The ones I have listed are only a few among them. But what is important for you as a leader is to reflect. Reflect on every aspect of your leadership, on what you normally do and then see what you need to do differently. Some actions may have to be done a little differently and, others quite differently. This approach will see you providing effective leadership for your people, in good times as well as bad.



  • Lehman, J, ‘Leadership in difficult times is different’, Jan 13 2009, http://www.livemint.com/2009/01/13212610/Leadership-in-difficult-times.html?h=B.
  • Dr. Izzo, J, ‘Leading in Tough Times’, September 2008, http://www.theizzogroup.com/pdfs/NL/The%20Enlightened%20Leader%20Volume%2025%20Sept. %202008%20Dr.%20John%20Izzo.pdf.
  • Colan,L.,J, ‘Here We Go Again Leading in Tough Times’, http://changethis.com/pdf/53.03.DownturnLeadership.pdf.
  • ‘How to inspire people in tough times - Kotter on Matsushita’, http://www.theleadershiphub.com/blogs/how-inspire-people-tough-times-kotter-matsushita.
  • George,B, ‘Obama: A leader for the ‘we’ generation’, Jan. 19, 2009, http://www.msnbc.msn.com/id/28693786/.
  • Slack,K, ‘Leading During a Recession’,http://www.forum.com/libraries/white_paper/leadrcssus.pdf.

Career Management during Tough Times : Management Funda; V2 Issue 3

We spend 50% of our time working and some of us cannot stop thinking of work even during the remaining 50% of the time. Thus our work and career forms an integral part of our lives. It is important we manage this part effectively, so that whatever we desire from it, be it job satisfaction, monetary rewards or enriching experiences, come our way.  And it is important we manage our careers even more diligently when times are tough to ensure the good things continue coming our way.

Insulating your career

An economic slowdown may throw up some tough situations in our careers. While it may not be possible for us to avoid the negative impact, it is possible for us to minimize the impact by taking some of the steps listed below.

1. Adapt to changes: In the light of changed circumstances in the economy understand how your company’s current priorities have changed. Align your short term goals to the new focus areas of your organization in discussion with your boss so that you continue to contribute meaningfully.

2. Provide value to your employer: Double your efforts in being valuable to your company. All your good work is sure to not go unnoticed. Even if it is not part of your job description, help your company increase profit, retain customers, increase productivity or reduce expenses. Seize opportunities for your company that these turbulent times may throw up. It could be in the form of hiring talented people who are out of jobs or finding new service or product opportunities due to changes in the economy etc. If you are in a managerial position help and support your team members in coping with pressures of salary cuts, responsibilities to deliver in trying times  and in aligning their work to new priorities

3. Develop skills:  Focus on building skills that will help you remain current in your industry or make you much more marketable. If there has been a layoff and the company has done away with specialists who were too costly, see if you can develop part of those skills required by the company. You may not enjoy the rewards immediately but when things improve you can bet you will get a raise.Develop transferable skills, skills you can use in other industries and roles. That way you can apply to many more jobs when you need to.

4. Develop a clear career plan: This is a time to remain focused on your long term career goals to reach where you want to be. Develop your career plan if you haven’t done so already. Answers to two simple questions: "Where do I want to be?" and "How will I get there?" can help you here. While in the short term, you can take up roles which do not fit into your career plan to tide over financial difficulties, try getting back on course at the earliest.

5. Have a backup career plan: To expand your career possibilities create a second career plan , one which you can switch to if the first one is not working out for you. Get more creative and bold here and plan for career moves that will throw up exciting possibilities.Think of what new career would fit best into your old career? What industries could you transfer into? What are some of the recession proof jobs that you can take up?

6. Network:Finding time to interact with people directly not related to your work can be difficult. But the effort taken in this direction may seem like a boon one day when somebody from your network helps you with a job change.

7. Do not quit your current job unless you are really unhappy: In an economic slow down great jobs are hard to come by. Also new recruits especially people on probation maybe the first ones to be terminated incase there is a layoff. So, don’t even think of quitting if you are reasonably happy with the company but find the current job not exciting enough. Instead explore possibilities of an internal transfer by developing your skills for the identified role.

8. Save for a rainy day and invest carefully: An emergency fund in case you are faced with financial hardships will be useful. The more the better. So start early. Ensure you have a minimum of six months’ take home salary. This will give you adequate time to find a good job incase of a job loss. While investing ensure you also invest in those plans that will allow you access to cash instantly, instead of plans that involve a lock-in rule. You should be able to use the savings when you need it right?

9. Assess your finances and manage them judicially: Needless to say, you should cut down on any unnecessary recurring expenses. Watch your discretionary spending. Now is not the time to buy that home theatre you had dreamed about. Make a budget and stick to it.Health costs can be a financial drain. So take a health insurance for self and family. Clear most of your debts. Develop alternate sources of income like rent from a paying guest, additional income from freelancing or teaching, hobbies that can be lucrative etc.

10. Assess your current job situation: Understanding how secure your job is, will help you be better prepared for an eventuality like a layoff. Do a reality check of your industry. Don’t get taken in by the generalizations. Understand your company’s future prospects. Determine how your department is doing. When Microsoft was doing well, they announced a layoff of people in their floppy disk division. Now review yourself. How are your accomplishments? Does your manager recognize them and think you’re doing a great job? What about the region you are living and working in? Are there other regions in the country still prospering despite a slowdown? Is there a cheaper place to live in?


Most of all stay positive. Remember slowdowns don’t last forever. History will tell you that. Your efforts, resilience and confidence in your self can help you survive and even thrive in these times. It is possible that you may give up your goals and give up on your self when faced with hardships.  But you can also emerge tougher and stronger, having withstood challenges and exploited the various opportunities an economic slowdown threw up. What is it going to be? It is up to you to decide and make it happen.


  • C, T, “How to Survive a Recession”, http://www.mahalo.com/How_to_Survive_a_Recession.
  • Rosner, B and Campbell, S, “Facing Your Economic Recession Fears - Career Survival Strategies”, http://www.payscale.com/economic-recession-in-america.aspx.
  • “Countering sudden loss of your job”,Oct 25, 2008, http://www.citeman.com/index.php/countering-sudden-loss-of-your-job/.

Recession proofing your business – Going beyond Cost cutting : Feature Article; V2 Issue3

There is a dip in profits. Budgets are getting smaller. Company stock prices have plummeted. Recruitments are slowing down. Demand for goods and services are falling. Are we or are we not in a recession? While the debate is still on, business managers cannot afford to simply wait doing nothing. It’s prudent to start taking appropriate measures to recession proof your business at the earliest. Use this time to become a leaner, more cost-effective and more efficient operation.

Recession proofing your business must start with remaining a cost effective enterprise through the current downturn.  I am sure your company must be already on to cost management measures like conserving cash, minimizing inventories, monitoring cash flow, making purchases wisely etc. While it is important to manage your costs it is equally important to manage other areas of your business to outsmart your competitors in times like this. Let’s look at what you as a manager can do.

Beyond managing costs
Needless to say you must do all you can to effectively implement in the department, unit or team you are managing, the cost management plans developed by your finance team. But look beyond that to manage recession.

  • Adapt quickly: This is an obvious one. When conditions change you can survive only if you adapt to them. Review the area of business you are managing and see how you need to adapt it to it, not only to combat problems but also seize opportunities. You may have to modify your selling strategy or change your employee engagement plans or take a re-look at your sourcing channels.

  • Stick to your long-term vision: Your long term vision tells you the reason for your business’ or department’s existence. Reconnecting to that vision will help you stick to your long-term approach and keep you going even though you are tempted to adopt short term measures.

  • Sharpen focus on business plan: Your team will look to you for company, department or team priorities. A clear business plan, an appropriate team structure, streamlined processes, the right performance measures, accountability system and rewards are extremely important in times of uncertainty. Make adjustments to how you recognize people during these times. You need everyone to be focused on revenues and costs.

  • Get aggressive in the marketplace: Continue actively selling and marketing your product or service. Consider adding a salesperson or even an additional service to give you an edge over competition. Being in front of customers or vendors builds confidence that you are a long term player. You can gain market share from competitors unable to adjust to shifting market conditions. Similarly don’t stop recruiting altogether. Ensure company presence in the recruitment market by continuing recruiting. You would want to retain recall of your company among your prospective employees.

  • Provide quality service/products: The buying power or willingness to spend is lessened during tough economic times. So to build your customer base and induce current customers to raise revenues, it is importance to provide good service/product. Don’t compromise on service or product quality especially by being understaffed. Instead of hiring full time employees, explore other options like freelancers, consultants and part-time employees. This holds true for not only external customers, but also internal ones.

  • Keep your people engaged: Your most valuable assets are your team members and to get the best of them, you need to keep them engaged. Anxiety levels among them can be high in tough times. So make sure they understand that you are building a lasting and successful enterprise and that some of the cost cutting measures, including layoffs, are necessary for the health of the company. Make your people part of the solution by involving them in initiatives related to cost cutting etc. Avoid widespread cost cutting and layoffs that can undermine employee morale. Disengaged employees can weaken competitive position, endanger future profits and increase turnover inducing star performers to leave. And this is definitely a time when you need your stars to help you figure out things.

  • Train your team members: While you may think it is wise to cut down training expenses, experts say this is a good time to invest in training especially on-the-job and cross training. This will also engage employees and help you get ready to take on the market when conditions improve.

  • Improve productivity: Monitor and improve productivity levels. Get more out of your team by helping them focus on the right deliverables. Use technologies that enable you to eliminate inefficiencies and reduce costs.

  • Maintain strong relationships: While maintaining good relationships is important at all times, during a slowdown one may forget to do so. Don’t!

    • Customers –Did you know the costs of acquiring new customers are up to five times those of maintaining and selling to existing customers? Hence allocate resources to strengthen relationships with your best customers. Being close to them will also alert you incase competition is trying to acquire them as their customers.

    • Suppliers – Even though you may shop for cheaper sources of raw material etc, do not cut off all relationships with existing suppliers. Let them still fulfill part of your need. You do not want to antagonize them since you never know who you may need in future.

    • Banks – Banks are looking for business to boost their income, but are also trying to minimize risk. They are careful about what kind of loans they give. Assure them of your financial position so that they give you an ‘over draft’ facility when required etc. However, seeking additional credit during a recession is not advisable.

  • Be prepared for economic recovery: During the 1990 -1991 recession, Dell perfected its demand-pull production system, and Intel launched its “Intel Inside” branding campaign. Both companies emerged as stronger competitors and grabbed the largest share of profits in their industries over the following years. If you have viable business idea, invest in it, maybe conservatively, but do invest. This is the time to look out for talent, physical assets that were not available to you earlier. A friend of mine working in a financial company tells me every second day he gets a CV of a talented financial professional. This was unheard of in the past.
  • Think long term:  In every aspect of the business think long term. For instance though every rupee saved is a rupee earned, you should be careful while cost cutting. Very often we tend to focus on immediate, piece-meal remedies and ignore the long-term implications. But wise cost management is not only about reducing short-term costs but also achieving lasting competitive advantage. Your business must incur costs to remain competitive - costs of attracting and retaining talent, costs of research and development, costs of building your company’s brand and maintaining company infrastructure.

Doing things differently, some examples….
If you thought cost cutting, reducing reliance on financial sectors or US markets and layoffs are the only measures being undertaken by companies, you are wrong. This is a time to think afresh and get creative on running a business. Check out what some companies are doing or have done differently to manage recession.


Of course what may work for other companies may not work for your company. Figure out what does. What is important is that you take a holistic approach and manage all aspects of business effectively. That way your company will be better positioned to do well when the economic conditions improve or you may just find for example that when business picks up you have client orders, but no talented employees left to execute them. Also remember the lessons learnt during recession. They can be valuable to you even in good times. All the best!



1. Legge,B, ‘Managing During the Recession’, http://www.leggecompany.com/Managing%20During%20the%20Recession.pdf.
2. ‘Survival Tips for Managing During an Economic Downturn’, http://www.sba.gov/idc/groups/public/documents/ri_providence/ri_econ_survival_tips.pdf.
3. Sujan, S, ‘Ten Tips For Startups To Ride Out The Economic Slowdown’, October 27, 2008 ,http://www.vccircle.com/columns/ten-tips-for-startups-to-ride-out-the-economic-slowdown.
4. Radjou , N, ‘Recession-Hit Indian Firms Experiment with New Innovation Strategies’, November 7, 2008 , http://discussionleader.hbsp.com/radjou/2008/11/recessionhit-indian-
5. McGregor ,J, ‘Managing Employees in a Downturn’, November 3, 2008, http://www.businessweek.com/magazine/content/08_44/b4106051107138.htm.
6. Kumar , D, S, ‘Economic Slowdown: Consumer durable companies put up a brave’, October 27, 2008, http://www.afaqs.com/perl/news/?sid=22479.