Pressure is a fact of life – especially so in businesses. You cannot eliminate it, but you can probably minimize it with good preparation and training and so on. But whatever you do – you are bound to end up in high pressure situations from time to time. It could be your boss promising more profit to the board or the market changing too fast and all your carefully laid plans going for a toss – there are many reasons why you may end up there.
The part you have a greater chance to control is how you handle it as a leader. And I think this is where a lot of traditional tactics that we seem to take for granted become counter productive. I want to highlight just three such “common strategies” and why they may not yield the expected results .
Centralized decision making
The most common tactic when pressure builds is for people higher in the hierarchy to take direct control of execution – especially of what appears as low hanging fruit. You will start seeing memos that go “All travel needs to be approved by the CFO” , “All purchases over $100 need to be approved by the GM” and so on.
On first blush it seems like a real good idea. People will be careful about what they spend money on because no one wants to go to the scary CFO to ask for a $500 air ticket. And multiplied by hundreds of people – that is real cost that is saved.
But what is the reality ? The good sellers will switch to a competitor with less draconian rules. The next best will stay paralyzed thinking they can push their deals when the rules ease off. The CFO would rather spend $500 to get the $100K deal – if only he knew. But this set of people won’t always ask. They will wait. It proceeds along similar lines across all segments. CFO might win the cost battle for a short time and still lose the larger business war over time.
The accounts payable clerk could have handled this $100 restriction – or automation could have, if the company had the IT skills needed. So on top of killing everyone else’s productivity – the CFO now has a lot more low value work to do. Is that the best use of a highly paid executive’s time ? You cannot manufacture more time for yourself even if you have the most powerful title !
What about the mid level managers who actually lead their teams ? They feel powerless, and for the most part their teams realize it in no time and lose respect for them. So now you have a morale issue and the good managers start floating their CVs in the market too.
A CFO I respect a lot once told me – about a decade or so ago – “When the business knows what they are doing, my job is to report what they do. When the business does not seem to know what they do – my job is to get it to a shape where I can get back to reporting again”. I think my appreciation for his words have increased every year since then.
Cutting the workforce
When the going gets hard and saving travel and stationary cost is not enough, leaders have to let go of people. It is a harsh reality of business. Many companies manage cost very effectively on an ongoing basis and even they will occasionally be pushed to cutting head count significantly from time to time.
The traditional wisdom is to cut the bottom rungs first. What gets ignored or forgotten typically is the difference in org structure to handle peace time vs war time. In peace time – you need the matrix and hierarchy to make sure you are investing sufficiently for future. So you will see roles like “Chief of transformation” , “Chief of culture” and so on – and with great conviction, the big bosses will put their best leaders in those roles. That is absolutely the right thing to do as well in that context.
War time is very different. You need your best leaders leading the charge – dealing with the market and your employees directly. If they truly are your best leaders, they cannot be hidden in internal roles managing spreadsheets and on vague ideas.
It is common to hear “all hands on deck” messages from the top at war time. But how many of these peace time roles are actually redeployed to the front line immediately at war time? How many of those senior and expensive people are shown the door if they don’t have the war time skills needed to keep the company alive ? And what saves more money – getting rid of peace time leadership roles at war time , or getting rid of a lot of lower cost less experienced people ? Same question about over lay and ops support roles – matrix requires significant operational overhead. When you are fighting to stay alive, does it really matter much how many ways you can slice and dice your results ?
In my admittedly limited exposure – I have always felt that most leaders are optimists. They think of all troubles in business as temporary – and hence will go away very soon. So why go through the trouble of redeploying etc when there is a less complex way that looks good on a spreadsheet ?
One of the things that leaders often encourage their teams to do the moment pressure starts mounting is “Please over communicate”. This often happens after most of the critical decision making has already been centralized – thereby reducing the usefulness of the lower level managers . Pleas to over-communicate is done with great intentions as well – for example, if people can alert their bosses of important issues early – they can help solve it before it becomes a disaster.
But what really happens when leaders try to over communicate ?
Even when there is no real pressure, communication is not usually a real strength for many business leaders. When they start to over communicate under pressure – the team starts to wonder a few things – “Wow this sounds desperate – should I brush up my CV” , “Clearly you have no respect for my time – and I seriously doubt you understand what my job really is” , “I lost you after the first five minutes – can we get to the point?”, and so on. The reason is simple – the more senior you are, your only way to over communicate is via some “one size fits all” strategy. When people are under pressure – they need clear instructions and specifics, the exact opposite of “one size fits all”.
When the bosses talk in generalities – what are the chances of the lower level employees to go back to them with specific topics ?
So what would be a sensible approach for leaders to handle pressure in their business ?
- If you are going to war – declare it explicitly so that all your troops hear it loud and clear .
- Define what it takes to win the war. Delegate battles effectively and stay focused on the war.
- Act decisively to get rid of the peace-time org structures and redeploy troops for war.
- Treat those who are not fit to be warriors with extreme kindness – and try to make it up to them when peace-time returns
- Take the lower level leaders into confidence and empower them – centralize strategy as needed without choking information flow, and decentralize execution and communication.
- Keep everyone posted as needed – focus on specifics. Resist the urge to over-communicate especially in “one size fits all” fashion.