Insight from our experts

Leadership through the downturn

René Carayol

Rene Carayol
Quick Facts Name: René Carayol
Company: Inspired Leaders Network
Position: CEO

Exceptional times demand exceptional leadership.

And make no mistake about it, these are unprecedented times.

Our world is more joined up and interdependent than it has ever been before. Information spreads at digital speed and no economy is immune or unaffected by the force, velocity or impact that decisions can have.

In the past a good management team and a strong brand were good enough to "get by"; in the new world these strengths alone will solve little.

Let's be explicit. By management we mean strategy, process, procedure, task, execution, KPIs etc. Everybody practices management now and it is readily available to all. Each and every aspect of management has become commoditised and all your competitors have similar access and are subsequently playing by similar rules.

They are no longer a differentiator and they no longer cover the cracks of a failing business.

Many of the great British corporate institutions still cannot escape the pull of the past and even now in a time of crisis they look for answers back in their history and from previous experience.

It is what a management ethos will naturally lead you to do; forever looking at lessons learnt from years before and studying what the 'best practice' from their industry is, gleaned from a string of previous successes and failures.

But that makes the gross assumption that what is being experienced now has been experienced before. And it hasn't.

Where are your new ideas coming from?

In unprecedented times the only way out of the darkness is leadership. And inspired leadership at that.

By leadership, we mean - vision, people, teams, culture.

If management is the hardware then leadership is the software.

Leadership is not management; it is how you inspire your people towards your vision and naturally create more leaders for the organisation, in a virtuous circle that means the best of the best talent continues to be drawn towards the business.

What's your favoured approach? Leadership or management?

And if there is always one question that forever comes up when it comes to leadership, it is whether leaders are born or made.

We are not certain that it is either. In our strong view, leaders are found, most often in a time of crisis when circumstance forces it.

Think World War 2 and Churchill, the fight for Indian independence and Gandhi or ending apartheid with Mandela.

It is of little surprise that in the United States' greatest contemporary hour of need, Barack Obama has emerged from nowhere.

"Old" Europe's current malaise is due in no small part to it continuously worshipping at the altar of management for many years, consequently creating cautious and risk-adverse corporate cultures.

It has bred an approach of slowly "making sure" and not wanting to lose.

In contrast, the role of leadership is to be positive, optimistic and uplifting; balancing EQ (emotional quotient or intelligence) with IQ. If management is what you do then leadership is how you feel when you're doing it.

What has become apparent is that it is imperative not to waste a good crisis because THIS is the time to re-invent your culture and unleash the leadership within organisations.

Let's be clear. When all around are polishing their management books and tweaking processes to try and make sure that mistakes aren't going to happen again, the best of the best are inspiring their people into giving that extra 15% discretionary effort and asking the magic words, "What do you think?".

The answers to the problems for most businesses lie within the organisation itself and yet time and again their people are rarely consulted and rarely listened to.

If they did the game could change forever.

When was the last time your team acted on an initiative you gleaned from the 'shop floor'?

But the emphasis cannot stop there. More often than not it is those on the frontline that have their fingers on the pulse of the business.

A strong communication channel must be created for two-way dialogue with those at the bottom. Only then will the quality of growth be controlled.

What do you stand for? How would your team describe your leadership style?

The credit crunch has forced a shift back to one of capitalism's first principles – survival of the fittest. And with Darwinian processes back at the forefront of the business world, there will be many losers unless organisations can break out from the herd mentality of the pack.

Over-capacity, commoditisation and global price wars have meant that only those with a unique proposition or a "value add" to maintain margins are making any headway against a strong backwards current.

If you look at the businesses that have remained relatively immune from the turmoil, they all have exceptionally strong brands, have not slashed prices and have highly visible leadership that can instil confidence and attract and retain the premium talent.

For far too long these crucial aspects of a thriving business have only been passively accepted by many because in the good times there are many winners but few losers.

In the hard times it is a different story. It is vital that all are clear on what you stand for, especially you.

It is time for the rhetoric to stop and to act. Quickly.

What are you doing differently?

With a rapidly increasing number of companies big and small now facing the threat of administration in the United Kingdom, the majority of these have suffered simply because they are not unique, special or different, despite some being very successful for a very long time.

Think Woolworths, MFI, Zavvi, Officers Club or Whittard of Chelsea to name a few of the better-known casualties.

All operated for years but failed to set themselves apart from a wave of newer, hungrier and leaner competitors.

It is a time where "good enough" may no longer be good enough.

So ask yourself if your business and brand is strong enough and different enough to ride the turbulence and whether your leadership team can attract the right people and set the right direction to build your reputation further.

Finally, ask yourself the toughest question, that only authentic leaders will dare answer truthfully. Are you still the right person to lead this organisation?

Every progressive organisation desires stability at the top but an active succession plan is absolutely fundamental for success. Marketplaces are too fast moving, aggressive and unrelenting for the top team to outlast more than a decade; there need to be multiple and credible candidates to take the top roles at any time.

Only then will you be in the position you need and want to be.

The wisdom of the leadership will be challenged by the wisdom of the crowds, fuelled by a cynical media. The leadership will only win if delivers an inspired vision, not by implementing more management.