Many of you may assume that due to the current economic crisis, business is going to be in the tank for a long time. Some business segments may take much longer to recover than most, but I still believe in our free enterprise system. The market itself will make the corrections necessary whether the government intervenes with massive spending or not.

Some of you may be thinking that now is the time to cut costs and go into a cautious, no risk-taking mode while putting duct tape on your wallets and purses. Although caution is prudent and contingency planning may be essential, don’t make blind assumptions and react too quickly without doing a complete analysis of your independent customer base and markets.

Economic Crisis often Presents Opportunity

This economic downturn presents many opportunities to those companies that have diligently followed best practices and built a team of employees that can excel regardless of economic conditions. There is nothing wrong with controlling costs and being prudent. However, don’t cut revenue-producing positions, functions or systems. It is easier to gain market share in a down economy. Now is the perfect time to invest in management skills training to strengthen the leadership skills in your company.

  • Many companies panic in times like these. Training is the first thing they cut. The contrarian view is that when others aren’t doing something, that is the best time for you to do it. If your competitors aren’t training their leaders, this can be an opportunity for you to create competitive advantage by training yours. As your company leadership skills keep getting better, your competition is in a holding pattern. Who do you think will be more successful in the short term and the long term?

  • Dedicate yourself with passion and commitment. Position and title may give you power, but power in itself does not make you an effective leader. There are specific skill sets that you must understand and master. This does not come naturally. It takes dedication, passion and commitment to the process, and that includes a tireless effort to improve on specific skills and the development of a personal leadership methodology. The successful leader is constantly building advantages into the organization at a much greater rate while eliminating disadvantages. This is especially important when economic conditions worsen.

  • Create a competitive advantage.  By the end of 2009 (sooner than the news media would lead us to believe), the economy is going to start getting much better. Success will come at a much greater pace if you have proactively built leadership skills into the organization. I realize the economic realities may be that you are in a contingency mode and you are forced to make serious cost reductions. Be careful not to throw the baby out with the bathwater. Those companies that continuously develop leadership skills at every level, including sales management, territory management and supervisory level employees, will thrive in this economic environment.

  • Winning organizations seem to have a knack for leadership development throughout their organization.  They hire well and they fire better. Generally their managers have been trained on the interviewing and hiring process. As a result, their success rate for finding and keeping good employees is above average. Recruitment and retention becomes part of their culture and the responsibility of everyone. Leadership is more than just a word in these companies and leadership potential is sought out, encouraged and developed. Every successful leader I have known has taken direct responsibility for the development of leadership in others.

  • True Effective Leadership is a Scarce Commodity

    Some people ask me, what’s the point in trying all this 21st century leadership mumbo jumbo when the economic sky is falling on us?

    It’s never too late to accept the responsibility for your personal leadership development or the development of leadership skills in your subordinates. Companies need the leadership ability to transform the organization to win in a challenging economic environment. This is not just the responsibility of the CEO. Leaders at all levels of the management hierarchy need to develop this type of leadership to create and maintain competitive advantage in tough economic times.

    Leadership in tough economic times requires that you:

  • Plan carefully.  Careful planning prevents knee-jerk decisions. If you haven’t done any planning beyond what you are going to do for lunch, now is the time to start. 2009 will require utilization of all your leadership skills. Planning is a key skill that is practiced by the most effective leaders.

  • Anticipate resistance.  Resistance is often a result of fear. Maintain a positive attitude. Your thoughts set the tone for the organization. Look at this economic crisis as an opportunity to gain market share and exploit your competition.

  • Communicate openly and honestly.  Most resistance is due to lack of information. Most companies under-communicate. This can be especially crippling during an economic crisis. If you can’t trust your management team enough to be totally open, then you have the wrong team. Don’t ignore the rest of the organization either. Keep everyone informed on a monthly if not a weekly basis. Employees’ number one concern during an economic crisis is their security.

  • Promote employee buy-in.  Get employees involved in the early stages of change. They will get you through this crisis. Employees create profitability.

  • Ensure execution.  Nothing happens unless you execute. Accountability must become a priority. All managers should practice follow-up coaching and guidance. Even the CEO must be held accountable.

  • Trust and respect employees.  Credibility based on your past relationships will play a key role in creating success. Employees won’t start trusting or respecting you until you trust and respect them. Understand the concept of empowerment and fight the urge to just delegate without allowing employees to use their initiative and creativity.

  • Invest in the development of your teams.  This includes your management team, executive team and the key employees that you depend on for leadership throughout the organization.

    This should be your manner and approach to providing direction, implementing plans and motivating people during this economic challenge. If you can train and develop leadership in your employees, your personal leadership effectiveness will improve. There is no such thing as a “born leader” even though every human being has some level of innate leadership potential. Effective leaders go through a never-ending development process. You never stop learning, you never stop growing and you should never stop training and developing leadership in others. That is a key ingredient to succeeding during tough economic times.

    This is the first of four articles about taking advantage of the economic downturn. The remaining three articles will appear as Web site exclusives at