CEOs call for inspirational, positive leadership
Chief executives of small and medium sized businesses (SMEs) have singled out people management as the most important attribute for recession-hit line managers. In research sponsored by the Institute of Leadership & Management, 27 per cent of CEOs highlighted the ability to manage and communicate with staff as the most important skill for their managers to possess in a downturn. Second was financial acumen, with 22 per cent of respondents ranking cost control and budgeting skills as their most desirable manager attributes.
The qualitative research also highlighted surprising optimism among business leaders in relation to their perceived chances of swift recovery. However, research released last week by the Korn/Ferry Institute concluded the reverse: chief executives were found to be largely pessimistic about the scale of the recession. Asked what best describes the global economy, over three-quarters said "severe recession"; only seven per cent said "recovering".
The ILM report identified the importance of maintaining a positive attitude. Respondents concluded that maintaining positivity requires a careful balancing act by senior managers, as they need to acknowledge the tough operating conditions, while at the same time inspiring confidence in employees. "If you start panicking and running around like frightened rabbits you'll terrify your workforce," said one CEO, interviewed by researchers.
"The CEOs we spoke to acknowledge that management skills are being tested by the current climate, and highlight how important it is for managers to have a leadership mindset," says Penny de Valk, Chief Executive of ILM. "They must have a strong, purposeful approach, an ability to adapt and develop innovative and effective solutions to problems quickly and a positive outlook." ILM chose to focus on SMEs, says de Valk, because "history tells us that it is these organisations that have the greatest potential for growth out of recession."
People management was identified as the most vital recessionary attribute because business uncertainty can lead to "an unhappy, fractious, even rebellious workforce." To encourage loyalty and maintain productivity, managers are advised to deal in positives rather than threats and coercion. "I don't believe in the 'stick' approach, I prefer the 'carrot' approach. If you're going to get the best out of people you can't do it using threats," said one CEO. "It is important to inspire rather than just manage," added another. "It means that people want to work rather than being forced to work."
Financial acumen in line managers was considered almost as important by CEOs. Senior management, according to the report, must have a "sharp focus" on the bottom line and be willing and able to take cost-cutting measures. They also must be able assess the financial health of suppliers and customers. "Credit control becomes far more important in these situations. [It] allows us to trade high volumes on low profit margins," said one CEO. Another added: "Numbers don't lie. We need to be aware of trends and to be able to adjust."
Posted 21 April 2009 : Director.co.uk
