Changing places

Are the leaders who have steered corporations through the years when the economy was at its peak and money was cheap, good enough to find their way through a downturn, which could last for years?

There have been boom times for as long as many people can remember, but now the world has been plunged into the worst economic crisis for decades. Blue chip banks have collapsed, Wall Street has been dramatically shaken-up and there has been a landmark £12.2 billion deal in the UK as Lloyds TSB takes over rival HBOS.
While many people are firmly pointing the finger of blame at City speculators, businesses are being forced to ignore the rhetoric and plan how they will survive in these tough times. A question that many commentators are asking is, can the leaders who flourished in the good times, do as good a job now they are faced with the current challenges?
Examples from history would lead many to believe that the answer is a resounding ‘no', because a change in situations calls for an alternate kind of leadership. At the extreme, would be times of war and times of peace. Winston Churchill was, after all, a great wartime leader, but was considerably less successful in peacetime.
There are some who believe that the more flamboyant style of leadership, perhaps typified by the dotcom boom in the previous decade, will gradually be superseded by a quieter style of leadership which has the stamina to pick up the pieces left by the present economic whirlwind and put companies back on track. Vision is seen as less important, than ability for tedious, detailed work.
Indeed, according to many academics, there is no one style of leadership, which is consistently effective. Harvard's Professor Michael Beer says it is very difficult, for example, for a leader who was hired for his ability to wield the axe when times are hard, to then continue to inspire energy and enthusiasm in the team when times are good and vice versa. Finding a leader that can work to both styles is a rarity.
He said; "If you hire someone with that one dimension only, you'd better be prepared to get rid of that leader within a year or two and bring in another one."
He is not alone in his views. The accepted school of thought among experts is that leaders typically fall into three different categories.
Firstly, there are "transactional" leaders who guide and motivate their teams to established goals by clarifying the role and requirements to get there. These work best in the good times when a company needs someone to lead it towards a sustainable performance.
Then there are "transformational" leaders who pay attention to the individual needs of team members, helping them find solutions to problems and inspiring them to take charge. Two examples are the late Anita Roddick, founder of The Body Shop, and Richard Branson of the Virgin Group who often grow a business against all the odds, such as in the face of strong competition or difficult markets.
A third type is the charismatic leader like Amazon's Jeff Bezos, whose innate confidence, enthusiasm and energy inspires everyone in his orbit to do their very best. This type of leader is very effective in times of financial crisis.
Different leaders can and do have very different ways of doing things. Some are known for inspiring people and persuading them to follow, while others are more likely to tell people what to do and confront them if they don't do it.
But, says, Keith Evans, the operations director at Prism Executive Recruitment,
not everyone splits these competencies. He says: "I don't see them as separate skills at all. Leaders need to set milestones so that they can measure team success; they also need to be able to inspire people,"
Mark Glinwood, the managing director of Insight, an HR consultancy, suggests that we think about it from an organisation's point of view. He said; "For companies to be successful they need a rounded approach to leadership which incorporates all of that. "There are different aspects of leadership (needed) in different situations."
Clearly though, it is not practical, or cheap, to constantly chop and change leaders as the economic cycle shifts, but how should leaders adapt?
A recent study of contemporary leadership styles by PricewaterhouseCoopers found the success, or otherwise, of a company when it hits hard times, depends on the adaptability of a chief executive.
PWC partner Steve Woolley said; "Leaders need to be chameleon-like, flexible to choose the right leadership style to initiate a transformation and change at different points in time in order to achieve set objectives.
"We found that there was no one right leadership style for success, but it is critical that the CEO walks the talk. There is however, one effective leadership style which will see you through all these situations, and that is to be flexible and adapt to different styles."
Leaders are human and very often it is tough for people to admit that times have changed and so must they. Yet, if they were the right person to build an organization and have done so successfully and consistently, they may simply need to develop their own skills in order to see it through in a different environment when the market is declining. The key may be to chose good role models and learn from their behaviour. This will entail working on their self-awareness and being open to feedback from others in the industry.
A true leader will be able to make the tough choices, adapt to the new environment, inspire his or her team and lead them through a new era effectively. Like any business challenge, it is about acting as a role model, inspiring confidence and commitment to the aims of the company.
Adapting their style to set new standards and make sure that the team performs to the level required by the new era, is what separates the best leaders from the also mans.