Leading Through Uncertainty

Dealing with market uncertainty and what appears to be a generally “slow positive” trend across the economy, companies are faced with many decisions. Sitting on your hands and waiting for perfect information is not a successful approach to lead in the face of volatility.

Another ineffective approach to leading in today’s market is rapid-fire initiative proliferation. Many executives are trying disjointed initiatives in an effort to see what sticks. Employees in these organizations refer to this syndrome as flavor-of-the-month leadership. Rather than leading with a set of prioritized actions and focus, leaders shift company initiatives every time they read a new success story. In some cases, the ideas applied are survival-based and reactionary.

As the economy continues to muddle through challenges, sputter through political decisions and show varying signs of improvement, some leaders are stuck in the harsh reduction mentality adopted during the downturn — the maniacal search for areas to “cut back” in order to survive now conflicts with effective preparation for the future. Across the industry, companies have appropriately analyzed the general ledger and reduced the fat. At some point, the constant drumbeating to cut costs becomes an overused motif, like the boy crying wolf. It no longer motivates employees or inspires urgency or action. In some extreme cases, cutting the coffee budget can only get us so far and nothing depresses morale quite like a missing that stout cup of Joe in the morning. Strategies developed two or three years ago to cut costs must be re-evaluated.

In the effort to get the most from every employee, tasking managers with multiple responsibilities is common. Previous reductions in force and new strategies improperly resourced in the name of lower cost have destroyed clarity across the company. As a result, corporate structures are unclear in some companies and in others they are non-existent or exist only on paper. Due to the changes over the past three years, most middle managers remain unclear about what is expected of them. Adding to the challenge of motivating our middle managers is today’s multi-generational workforce. Generation Y employees (in their early 20s), Generation X employees (30 to 50 year olds) and baby boomers each have unique perspectives, training, leadership and developmental needs. Many companies have begun robust training and leadership programs again as a result.

Maybe we are looking for the answer to the wrong question. Rather than, “How do we cut costs further to compete effectively?” we should be asking, “How can we create an adaptable company that will profit in a price-driven market?” While some would argue the differences in question are semantics, how these two approaches are led makes a great difference.

One approach might be reduction-focused, through unceasing enforcement. The better approach is profit-focused, engaging experts across the company and ensuring clarity in priorities. This is similar to losing weight vs. getting healthy. A focus on reducing calorie intake and rapid weight loss goal may be difficult and only temporary. Developing healthy and active habits make for a better and longer-lasting health benefit. Within the company, the two approaches (reduction-focused and profit-focused) are worlds apart in leadership tactics and make a significant bottom-line difference in this challenging economic environment.

The cost-cutting mentality often depresses morale and reduces field leaders to execution-based tasks only. The focus of efforts for middle management becomes, “Did you complete this form?” A fear of admitting weakness echoes across the company. Reductions in the workforce, although many times necessary, often leads to fear across the company. Employees carefully walk the boundary of their duties and responsibilities, or what they perceive to be the expectations of their roles. In the dynamic construction environment, leading skilled managers in this manner typically results in frustrated employees focused only on pay as motivation. A symptom of this disconnect is hearing senior leaders suggest that they just don’t “get” young employees. “They aren’t dedicated to the company.”

In some company meetings, this disconnect and lack of engagement appears. Take the review meeting (sometimes called the post-job review). The purpose of this meeting is typically designed to:
• Identify areas the team executed well and share these.
• Identify areas the company can improve upon in the future.
• Create a growth experience for those involved to understand what really happened.
• Reinforce a learning culture across the company.
• Create a library of best practices for similar projects in the future.

All too often, we miss the mark. Too much shin-kicking occurs across the team with sword fights that result in wider differences between departments (taller silos), or numbingly ineffective discussions of how everything was out of our control. Neither results in any value for the company, nor do they address areas that can lead to improvement for the company leadership. As a result, companies are stuck in repeating failure unless demanded from the top. At that point, senior leaders often do not have a clear grasp of exactly what needs to change or the best method for change. The misperception from the top of the company is that any change seems to require direct intercession every time by the top.

Done correctly, we empower project level/mid-level managers and field leaders to improve profit. We can generate a climate open to sharing strengths and weaknesses for the sake of constant improvement. Implementing change effectively in this manner creates adaptable organizations that are not locked into just following orders.

From a leadership development perspective, great construction leaders today display authentic, self-aware leadership in order to build trust and clarity. They do not have all of the answers, but know the right answer lies within the company and put their energies into helping the company develop the best solutions. These leaders must develop and communicate a vision. Their chief skills are understanding, respect and awareness of the people they lead. They maintain agility in the face of changing circumstances around them, keeping vision and people at the front of priorities.

This is one of the most difficult markets to lead a business. There is more importance to helping project management teams develop situational understanding and clarity of a mediocre strategy, than having a CEO announce a perfect strategy (if there is such a thing) in a memorandum. Effective change management is generated by great leadership at the top. The vision and culture is set and reinforced continually from this seat. Best-in-class teams often work together to identify effective market strategies and systems to execute effectively. In order to keep effective change and competitiveness in the market, the company leadership must share situational understanding across the field managers and project teams.

In essence, great companies in this volatile market recognize great opportunities around them. Uncertainty and lack of clarity can be an impediment, but for companies that can adjust quickly, they can take advantage of this challenge and pull ahead in the market. A mentor once stated that leading an organization during an environment of complexity requires “simple plans repeated clearly and often.” The essence of leadership is clear priorities and focused efforts.

Jim Schug is a senior consultant with FMI, based in Tampa, Fla.