The Importance of Leadership In An Economy Downturn
No Matter the past experiences of your leadership in difficult economic times, the leaders in your organization can do several concrete things to make hard economic times easier for themselves, their teams, and the company at large.
At ExecOnline, we’ve conducted a COVID-19 Business Response Survey, which features responses from 2012 total leaders at a cross-section of major corporations. The results from the survey are illuminating and establish several truths about our current moment. Our findings include the following:
- Organizations are struggling to balance changing customer needs as work switches to digital—which Millennial leaders are typically better at understanding. When asked how the emerging business environment is impacting their organizations, respondents cited impact on workforce, including engagement, reduction in force, and availability (72%); changing customer needs (69%); and increased focus on productivity (56%).
- COVID-19 is stressing the soft skills of leaders more so than core responsibilities. In response to a question about their biggest challenges as leaders in the current environment, respondents said supporting my team members’ overall well-being (62%); making critical business decisions amid uncertainty (54%); and achieving clarity on what my team needs to accomplish in a rapidly changing environment (53%). Only 41% of respondents mentioned “delivering on our core job responsibilities.”
- The main challenge in working virtually is maintaining relationships with teams and stakeholders — not technology, as originally thought. When asked what barriers to effective virtual work leaders and their teams are experiencing, 56% mentioned the difficulty of building and maintaining relationships with their teams, cross-functionally and with clients. Only 23% of respondents said technology, ineffective collaboration tools, internet access, and/or hardware.
In many ways, COVID-19 has been a stress-test for businesses and their leaders. The crisis, which resulted in many businesses shifting to entirely virtual workforces for the first time, reminded us of the importance of great leadership. It’s never easy, but it can be especially difficult to be a leader at an organization in the middle of uncertain economic times—especially when, for many leaders, this may be their first time in a management position during an economic downturn.
Many leaders who navigated companies through uncertainty in 2001 found themselves in similar positions a few years later during the 2008 financial crisis. But between 2008 and now, a dozen years have passed. At the end of 2017, the median tenure for CEOs at S&P 500 companies was five years. So many of the leaders at your organization may be facing these challenges for the first time in a leadership capacity.
The paucity of leaders who have managed during anything other than an expansion economy is a critical issue that didn’t exist to nearly the same extent during the last recession, and it’s one many organizations haven’t yet fully started to grapple with as they work through the many other challenges the COVID-19 pandemic has presented. Our Founder & CEO, Stephen Bailey, recently wrote an article explaining how to excel as a leader at an organization, even during tough economic times. To read the full article, click here.
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