October 28, 2016 by Speakers' Spotlight
Why It’s Hard To Lead When Times Are Good
Liane Davey creates powerful changes in top teams. The bestselling author of You First: Inspire Your Team to Grow Up, Get Along, and Get Stuff Done, Liane’s mission is to radically transform the way people communicate, connect, and contribute, so they can achieve amazing things together. Her approach combines a keen expertise in strategy with her deep insight into group dynamics to increase the value organizations get from teamwork and collaboration. Below, Liane explores why sometimes leading during the “good times” can be more difficult than leading during the “hard times”:
“We’re lucky. Times are good and it’s pretty easy to manage right now.” This is a quote from a member of an executive team I’m working with right now. He’s right, times are good for their business…really good. He’s also right that the steady sales and recurring competitive wins make it reasonably easy to manage the organization. There’s certainly no agonizing over decisions about job cuts or making excruciating trade-offs because of scarce resources. But managing the organization is not the same as leading it. While I agree completely that it’s an easy time to manage the organization, I believe it is one of the most difficult times to lead it.
When you trail your competitors, you’re always in a race to respond. You know exactly what you’re striving toward because you’re running toward the bad guys, who have targets on the back of their heads. You stay feisty and nimble. You’re keen to win, but you’re usually stuck playing the competitor’s game. Just keep them in your sights and you’ll close the gap a little more each quarter.
And maybe one day, you surpass them. You out-manage or out-maneuver them. After years of striving, you’re relieved to finally be in the lead. But be careful what you wish for. When you’re at the front of the race, you have so many more degrees of freedom. You also have so much more to lose.
Leading an industry
It’s an extremely difficult and precarious position to lead an industry. You have to decide how fast to innovate? Your organization and many others might benefit from taking your foot off the gas when it comes to the changes that shake up the status quo. You have to figure out when to launch new products that will cannibalize your existing ones. Where do you go on price? These are the questions you’re left to answer when the competition is behind you.
Leading the organization
It’s not only external and competitive questions that are more difficult to answer when times are good; internal issues can be more challenging too. Rahm Emanuel, President Obama’s Chief of Staff during the 2008 financial meltdown was famous for saying, “You never want a serious crisis to go to waste.” That’s because there are things that are possible when times are dire that are far too unpalatable to sell in the good times.
It’s hard, when times are good, to make bold choices. When resources are abundant you don’t have to choose. Only the strongest leaders will still make big bets and divestitures when times are good. Most will squander plentiful resources by diluting them over multiple priorities.
Sharing the wealth
Similarly, good times make it difficult to manage performance and rewards. When times are tough, it’s clear (I hope) that you have to over-weight high performers and high potentials and send a tough message to those who aren’t delivering. But when the purse strings are open, it’s easy to spread the resources around, thereby pulling your punch on the performance message.
In general, leading in good times is hard because it can feel like you have nowhere to go but down. It’s much easier to be complacent and to ride the wave for as long as possible. It’s much more difficult to lead from the front.
Are you enjoying the easy days of management while neglecting your obligation to lead? I encourage you to talk about this with your team. Here are a few conversation starters…
- How would we define the current era and what has made us so competitive in this era?
- What do we believe will define the next era for our industry? What trends suggest the battlefield is changing?
- Where are we vulnerable because of our success in the current model? Who has a vested interest in changing the game?
- What could we do today to prepare us for the next era in our industry? Where could we invest, incubate, or dabble to ensure we’re ready when the game changes?