Canadian Management Centre's Training Blog

Crisis Management Calls for Skilled Leadership

As reported by HRI, how leaders respond to a crisis is a "critical test of their stewardship," according to Helio Fred Garcia, executive director of the Logos Institute for Crisis Management & Executive Leadership. Garcia was interviewed in 2006 by Wharton MBA student Romi D. Garvey. Boards are expecting more transparency in crisis response plans, both because of uneasiness concerning personal liability and for reassurance that the firm is prepared to handle operational glitches. Companies can gain a "first mover advantage," says Garcia, if they are prepared to act quickly. "If a corporation is able to demonstrate that an operational setback is exactly that, it declines adversaries the opportunity to interpret the crisis as they wish," Garcia explained in the interview. Following are some of his suggestions on how leaders can prepare for a crisis.

• Define what a crisis is, what the early warnings are and which senior executive is responsible for the preparation and response. Ensure this person has full authority to mobilize resources.
• Test the crisis response plan through activities such as war games, exercises and other ways to practice quick decision-making.
• Stay in control of the crisis response agenda so that "media, adversaries or the rumor mill" don't take over the definition of the situation. Develop response tactics and messages that provide stakeholders with what you want them to think, feel, know and do.
  (Wharton Leadership Digest [Garvey], March 2006)

Expect Shortfalls in Young Leadership Talent

As reported by HRI, the supply of leadership talent in the 25- to 44-year-old group will be short by some three million leaders by 2008 - when the demand for such talent is increasing, according to Michael Echols, vice president of strategic initiatives at Bellevue University. Among the leadership talents that need to be developed is an ability to process large amounts of information using skills in "analysis, synthesis and critical thinking" - skills typically developed over an extended period of time. While training and development is often considered a cost to be minimized, it may be preferable to consider it a long-term investment that pays off in avoiding recruitment costs and productivity loss due to attrition. (Workforce Performance Solutions [Echols], May 2006, pp. 20-23)

Do Top Leaders Believe in Talent Retention

While seven out of 10 HR managers said that retaining talent was a key issue for their organizations, they claim that senior leaders don't necessarily find retention such a compelling issue, according to a 2006 report on retention by Monster Intelligence, the research arm of the online career site Monster.com. The organization polled 600 HR leaders across the country, finding that the respondents said that only 60% of senior leaders thought retention was a vital issue. At the board level, the HR managers said, the perception was lower still - they said that only 40% of company directors perceived retention to be a crucial issue. (Retention Strategies for 2006 and Beyond [Monster Intelligence], Winter 2006, p. 7)

Some Corporations Emphasize Learning from Failures

There is more potential to learn from failure than from success, and creative firms that focus on proving themselves wrong experience those failures and learn those lessons sooner, according to Harvard Business School professor Amy Edmondson. Following are several organizations whose leaders embrace risk and failure as necessary to growth.

• Coca-Cola Co. chairman and CEO E. Neville Isdell reassured employees and shareholders that he was willing to tolerate the failures that may accompany risk-taking as the organization strives to change the nature of its historically risk-averse culture. Using the 2006 annual shareholder meeting for his platform "elevates the statement to another order of importance," said Isdell.
• IBM Research balances performance evaluations with the encouragement of risk by using two evaluation timelines - a one-year evaluation on which bonuses are based and a three-year evaluation that determines job level and base salary. The longer evaluation period encourages innovation risks and allows potential setbacks from those risks to be absorbed.
• General Electric Co. takes its best-practices sharing to another level and has added discussions of failures to its business unit practices. A conference call in 2005 brought together champions of eight "imagination breakthrough" projects that didn't make it.
  (BusinessWeek [McGregor], July 10, 2006, pp. 42-52)

Leaders Can Cultivate the Resilience Needed to Manage Change

As reported by HRI, In order to cultivate and maintain the kind of resilience they need to manage organizational change effectively, leaders need to recognize and undertake a four-part process, says Katie Cooney, vice president of the Minnesota-based executive coaching firm LeaderSource. Cooney points out that leaders often fail to recognize the need to rest and refresh themselves, not only physically, but also emotionally and spiritually. Her recommended approach begins with taking stock of one's situation, including both internally and externally focused analysis. Next, says Cooney, "leaders need the ability to both acknowledge and feel emotions surrounding the situation." Once that is done, she explains, leaders can contemplate actions that they might take to address their circumstances. Finally, follow-through depends on leaders actually possessing the skills they need in order to carry out the actions they formulated in step three. (MWorld [Cooney], Summer 2006, pp. 40-41)

Leadership Perceptions May be Based on Biology

Biologically based differences in the way men and women approach the tasks of leadership may help explain why women in Canada (and other nations) don't fill as many leadership positions as men do, says Elaine Allison, author of The Velvet Hammer: PowHERful Leadership Lessons for Women Who Don't Golf. Noting Statistics Canada figures that place the proportion of female leaders in Canadian businesses at only 34%, Allison observes that medical research has demonstrated that women tend to use both sides of their brains to solve business problems, while men's brains usually show one-sided function. Although both genders may arrive at the same solutions, this pattern, she says, can lead some to perceive men as focused and women - whose two-sided brain activity enables them to multitask - as scattered. Similarly, Allison says, hormonal differences push men to aggressively attack problems with less thought to the personal effects on their work teams, while women tend to be concerned about their teams' welfare and the personal effects of business decisions. Those differences, says Allison, can cause women to be viewed as emotional and men as focused problem-solvers. She concludes, "Society must learn that men's and women's methods are just different, not better or worse. By celebrating and embracing the differences, organizations will become more progressive, profitable and productive." (Canadian HR Reporter [Allison], May 22, 2006, p. 31)

Mens and Womens Leadership Styles Are Viewed Differently

As reported by HRI, Business leaders in Western Europe "consistently perceived differences in leadership behavior and effectiveness of women and men," reported the research and women's advocacy group Catalyst, which conducted a 2006 study in partnership with Switzerland's Institute for Management Development. The two organizations examined responses of 935 institute alumni across Europe who became business managers, gauging managers' perceptions of male and female leaders. Researchers found that valued leadership traits differed regionally and that stereotyping of female leaders sometimes was exacerbated if their leadership styles didn't match the preferred traits. For instance, women who were seen to be effective team-builders might be viewed as less capable in regions where team-building is not a highly valued leadership ability. Catalyst cautioned that "global companies need to be particularly aware of these differences as they transfer ... executives in and out of these cultures." ("Barriers Across Borders" [Catalyst], press release, June 13, 2006)

Leadership Development Succession Plans Are Top Concerns

As reported by HRI, The development of potential leaders is considered the top management challenge in 2006, according to an annual survey conducted by The Ken Blanchard Companies that polled more than 800 training and development professionals. In 2006, 63% of survey respondents chose developing potential leaders as the top issue, up from 58% who responded that way in 2005. Another one of the top management challenges related to leadership that were noted by survey respondents was succession planning, chosen by 42% of respondents in 2006, up from 34% in 2005. Among the top organizational business challenges noted in the 2006 survey were competitive pressure (60%), growth and expansion (53%) and skill shortages (43%). (Training, June 2006, p. 16)

Most Workers Stay in Jobs They Don’t Like

In 2006, 81% of employees said that people remain in jobs they don't like simply for the sake of having a job, according to a survey conducted in spring of that year by the staffing firm Randstad. The organization polled 1,264 employers and 1,642 employees across the country and found that 69% of employers thought workers held onto jobs they disliked for the same reason. About two-thirds of workers responding to the poll said they expected to remain with their current employers through the year. Randstad noted that the remaining third of employees did not express intentions to stay. Of the employees responding to the poll, 86% told Randstad that their happiness on the job depended on their employers letting them know that they were valued. At the same time, only 37% of the workers said that their employers did so. (Workforce Management Online [Larson], August 2006)

Are Pet Projects the Wave of the Future

As reported by HRI, a growing trend finds innovation and productivity rising as U.S. employers let employees work on pet projects on company time. Joyce Gioia, author of Impending Crisis: Too Many Jobs, Too Few People, thinks pet-project policies will become popular recruitment and retention tools as loyalty becomes more precious in the face of a tight labor market. Genentech and 3M have done it for years, and Google has made its "20% time" policy a major recruiting tool as well as an innovation driver. Giving employees a chunk of time to devote to their own personal projects - some of which have resulted in the development of a cancer-fighting drug and the creation of Post-it Notes - pays great dividends in innovation and productivity, not to mention new product sales. And allowing employees to work on independent projects can stimulate more loyalty and creativity. According to Robert Fulmer, visiting business professor at Pepperdine University, "It's a way to get people to go beyond what's expected of them." (Workforce Management [Frauenheim], April 24, 2006, pp. 40, 41.)