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3 Ways to Ready Your Leadership When a Recession (or Any Crisis) Looms

Leadership involves a certain amount of discomfort regardless of the circumstances. In fact, if you aren’t experiencing some discomfort, there’s a good chance you aren’t really leading. You’re just occupying space while others around you work to maintain the status quo.

The discomforts of leadership, however, can intensify and overwhelm us during times of crisis – you know, like during a pandemic or a recession. And that can become debilitating to our leadership.

Because my team and I led Prologis through the Great Recession, I’ve been asked what advice I might give to leaders during our current economic difficulties.

I typically avoid suggestions about business and financial tactics or strategies. There are too many factors that are different now than back then and too many factors that are specific to individual companies.

Still, there are things I learned during those trying times that can benefit leaders today, regardless of what type of crisis is causing their discomfort to intensify to overwhelming levels. So here are three things to consider that can help prevent your circumstances from debilitating your leadership:

1. Commiseration breeds insights

In 2008, right at the beginning of the recession, I arranged a meeting with John Mack, who at the time was CEO at Morgan Stanley.

We didn’t know each other, but we had risen through the corporate ranks in a similar fashion and he had faced many of the same challenges I was about to face at Prologis. If nothing else, I figured he would provide an empathetic ear. He provided much more than that during our 60-minute phone call.

What stood out the most for me was his commitment to who he was as a leader and how he wanted to lead others.

The meeting drove home the value of admitting you need help as a leader and then seeking that help from the right people.

How do you find the right people?

This isn’t an all-inclusive list but start by looking for someone you respect who has faced similar trials, who has an outsider’s perspective, who will listen to your story, and who will offer relevant advice about how to lead. Perhaps they will throw in some practical do-this-don’t-do-that nuggets, but their greatest value will be in helping you define and refine your mindset and approach so that you can make the decisions only you can make.

2. Valuing people creates value

My conversation with Mack lead to some self-evaluation about my leadership approach, and that led me to formalize my 3H-Core.

Mack talked about the three H’s that guided his leadership – honesty, humility, and humor. While I appreciated the value of all three, only the first two were really at the core of how I lead. There was another H-word, however, that also shaped my leadership decisions – heart. That’s the word I use to describe leadership that values people.

A genuine respect for the stakeholders your leadership impacts is always essential, but I’ve found that tough economic times severely test this value. The tendency is to get so focused on numbers that you lose sight of the impact bottom-line decisions have on people.

Leading with heart isn’t about giving everyone what they want, but about doing what’s in the best interests of the group while treating everyone with dignity and respect. At Prologis, we ended up laying off a good many employees during the recession, but we generally received high marks as a leadership team for the way we communicated with employees about such decisions and for the way we treated the people most affected by those decisions.

A more recent example would be McDonald’s decision to sell its stores in Russia. CEO Chris Kempczinski was criticized for not doing this sooner, but he took his time (81 days) because the decisions he made would impact 62,000 employees at 853 stores in Russia (as well as thousands of other stakeholders). It took time to sort through the challenges and create a plan that not only got the company out of Russia but protected the jobs of their workers.

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3. Integrity always matters

My willingness to seek input and advice from Mack was one way I led with humility; I knew I didn’t have all the answers and I was willing to admit that reality and do something about it. My emphasis on how we treated our people was one way I led with heart; I wanted people to know they were valued even if we had to lay them off.

Humility and heart, however, must live within the context of the other H in the 3H-Core – honesty. This is about telling the truth, but that’s not all. Honesty also is about doing the right thing, even when it’s hard and even if no one else is looking.

In difficult economic times, temptations to cut corners or bend your ethical values constantly nip at your heels. Communicating facts and decisions with honesty creates a layer of accountability and acting with honesty develops the trust that is essential to success during a crisis.

No matter what business you are in and no matter the specifics of your situation, leaning into humility, heart, and honesty will give you a framework for making the hard decisions as a leader. It won’t eliminate the discomfort, but it will keep you and those you lead moving in a positive direction as you face the challenges of each new day.

Comments

  1. Arlene Greer

    Thank you for your perspective and words of advice I will cherish now and in the years to come. While it’s not always about the funding, it is in the arts about people and attendance, loyalty and the value of the subscribers and beneficiaries of your programming, and how to lead and preserve those relationships. Thank you helping us be guided by the three 3 H core – honesty, humility, humor and your added heart. Wishing you all the best and thank you-:)

    Reply to Arlene Greer

    1. Walt Rakowich

      Wow, thank you, Arlene, for the kind words. The 3H-Core is the culmination of what I learned in difficult times. Means a lot to know it can help you, too.

      Reply to Walt Rakowich

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