“When you’re finished changing, you’re finished.”

Benjamin Franklin

Working with various business leaders in these troubled times has given me valuable insights into why some do well during economic downturns while their competitors who serve the very same markets struggle or go out of business. Of course they actually do things differently, and I’ll address that aspect in a bit. 

First however, it is worth noting that differences in their attitudes toward life and people are a significant input into the different results that they produce. A review of the writings on leadership by such experts as Max Depree, Pete Drucker, Steve Covey, Warren Bennis, and others underscore the importance of optimism and openness as crucial factors in business success. Let’s take a look at the relationship between such attitudinal differences and the ability to produce good business results.

Attitudes that predict success

The connection isn’t some magical “mind over matter” phenomenon. It’s a perfectly understandable reality that attitudes determine how we respond to situations, and those responses in turn determine the outcomes we reap. Leaders with positive attitudes tend to be more imaginative, proactive, open minded, and have greater concerns for people than their more pessimistic counterparts. These differences lead them to take actions that produce tremendous benefits to their businesses over the long haul. Specifically, what kinds of actions do these positive minded leaders take? A few of these are summarized below.

Strategic planning:  Imagination translated into action

Times of economic turbulence and rapid change require the willingness to reexamine business goals and means of attaining them. Companies that have shown growth as opposed to decline during these troubled times have invested more time and resources in reviewing and revising their strategic plans than those that have not fared so well.  Effective strategic planning is an effortful activity, but if done properly it can turn potential ruin into restoration and revitalization.

The history of Apple, Inc. makes for fascinating reading about a company’s ability to reinvent itself time and time again over a period of a few decades. Granted, Apple is a corporate giant, but the principle applies regardless of business size. For a smaller and more local example, see last month’s issue of the Route 422 Business Advisor, which chronicled the dramatic turnaround executed by Superior Tube Company of Collegeville, PA in the past few years. A key component of that company’s revitalization was its institutionalization of strategic planning on a quarterly basis. In a time of rapidly changing technology and economic conditions, it only makes sense to do more frequent reviews and revisions of business goals and means of achieving them.

Avoiding disaster during times of change

I’d better note at this point, however, that I’ve seen strategic planning efforts go awry and become distractions that sap the energy of organizations. If not handled properly, they can become grueling and protracted ordeals that aggravate the organization’s existing problems. Organizations with histories of internal conflict should consider hiring an experienced outside facilitator to mediate the planning process. In any case, if approached in a positive spirit of cooperative problem solving, the yield can be a more unified and more competitive organization that is ready to blossom.

This is where leadership is crucial in terms of maximizing the levels of trust, respect, and good human relations involved. Developing these leadership capacities are discussed later. In any case, in order to be effective, the efforts to review and revise an organizations strategy needs to include at least the following elements: 

Possibility thinking: Also known as “brainstorming” or “thinking out of the box,” this component involves the serious re-examination and even discarding existing ways of approaching problems and organizing work. New products, markets, as well as elimination of old ones also need to be okay to discuss. Successful business leaders always insist that a diversity of perspectives be included in this process, particularly if the organization involved is complex and hierarchical.

Goal setting: Desirable outcomes need to be articulated in the form of specific goals that are coordinated, harmonious, and measurable.

Action plans: Beware that “the best laid plans of mice and men often go awry.” Many planning processes fail to achieve their intended results because they do not specify the means by which their goals are to be attained. Setting goals is a start, but the mechanics of how these are to be realized must be worked out.

Full disclosure and commitment: Everyone who plays a part in executing the plan must be aware of it and be ready, willing, and able to do fulfill their role. Many plans fail because key personnel are either not committed or are not given the tools they need. The best way to avoid this outcome is to get their input into its development. By no means should dramatic changes be sprung on unsuspecting workers without warning.

Accountability: While goals need to be measurable, it is also essential that those responsible for attaining them need feedback regarding the adequacy of their contributions on an ongoing basis.

What else do those who successfully negotiate tough times do?

Besides being more proactive and imaginative, those who turn problems into possibilities have genuine concerns for people in an intrinsic sense. They care for people not just as means to ends, but tend to be compassionate and empathic. This does not mean however, that they are bleeding heart liberals with lax standards. 

They are demanding, but also understand the needs of their subordinates. They tend to be good communicators who make it clear what is expected of those who work for them, but they also make sure that employees have the support and the resources that they need to succeed in their roles.

In addition, many of them do something that would appear counterintuitive to their counterparts with more negative outlooks and expectations. During challenging times, they often invest in training for employees, which on the average shows an immediate benefit in that they tend to be less impacted by the downturn. In addition, when economic conditions improve, they get twice the financial benefit when times do get better.

During the economic recession of the 1990s, many companies slashed their workforces in a near “knee jerk” fashion. Those that reacted in this fashion suffered consequences when the recovery did occur, in the form of reduced numbers and quality of applicants when they were ready to hire. While they were struggling to hire and train new workers, their more proactive competitors were off and running with the economic upturn.

The best leaders always seek to improve themselves

The best leaders are optimists, and optimists entertain positive self-images. An additional truism is that they are always in search of ways to improve themselves. Those who have already demonstrated excellence are more eager to better themselves than those with histories of mediocrity. As is so often the case, those most in need of improvement are the least likely to put effort into doing so.

Profiles of business leaders with demonstrated records of success consistently show that they are almost invariably avid readers in a variety of areas. They are also ever in search of seminars, workshops, and other means of elevating their knowledge and skills. Most are quite diligent when it comes to elevating their levels of “emotional intelligence.” If you look at those leaders who actively seek out the services of consultants and executive coaches, you again see that it is the most successful ones that do so.

Exemplify that which you want to see in others

By holding themselves to high standards, the great ones lead by example and rely less on formal authority than their less effective counterparts. Their enthusiasm is infectious, which causes their subordinates to fulfill their obligations with greater effort, persistence, and attention to detail. The results are levels of performance that could never be achieved through high-pressure influence tactics and constant surveillance.

By the way, this particular benefit produces results without any additional monetary investment. It’s very cost effective. And during bad economic times, when reducing unnecessary expenditures is crucial, this aspect of it becomes especially attractive.

Ironic, but true

Research on leadership tells us consistently documents the positive benefits of optimistic outlooks, flexibility, and the cultivation of trust, respect, and good human relations in workplaces. As ironic as it seems, the very same body of research tells us that arrogance, rigidity, and egocentrism proliferate in high places despite the fact that these things are the enemies of long-term success in business.

Deep down inside we all know that real leadership is based on strength of character that includes a degree of humility, yet many of us fail to surface that knowledge and put it to work on a daily basis. For some reason, being ruthless remains a preferred path for many, despite its disadvantages. For those who choose to transcend this human propensity, the rewards of greater prosperity and peace of mind await.