The Work Clinic

It can be worrying for staff when organisations take risks. Therefore, is up to leaders to help their staff understand that, as Erica Jong says: "The trouble is, if you don't risk anything, you risk even more."

There may be a lot to lose, but there also may be a lot to gain.

In theory leadership in a recession should be no different than at any other time. What is different, however, is firstly a change in objectives and secondly the emotions created in the team being led. Cost cutting, downsizing, headcount reduction are all words and expressions that lead to tension, stress and worry within the team. This in turn leads to a loss of creativity. What is needed to help counter some of this is clarity (around the revised goals), honesty, (not trying to dress things up )and good communication (keeping people informed as to what is going on). Managing these tensions is what good leadership is about at these times.

As always the best way to limit the overall level of risk to which the organisation is exposed, is to diversify. It is safer to take a dozen un-related risks than to take one massive punt (eg at Board level). At a time when the financial health of a company is impaired, this is particularly important. As the article suggests, this means that all levels of the organisation must retain their entrepreneurial spirit and willingness to take risks.

Innovation is the lifeblood of any organisation, but it is often the result of a culture where individuals are activity encouraged to try new things and take risks. If organisations want to create a more entrepreneurial environment, where managers have the confidence to take business risks, they need to put the support processes in place to support this.

Building risk-taking skills and capabilities into the development programme will play an important part. This should include how to identify and evaluate risk, how to quantify the level of risk against the perceived benefit and developing an effective mitigation plan should the worse happen.

It is also about building an open and supportive working environment across the organisation. Managers are unlikely to feel comfortable taking risks if they do not get any time and input from their line manager in terms of brainstorming ideas and getting feedback on potentially risky decisions.

Risk-taking, especially in a recession, is a really interesting issue. Julia Middleton’s advice all makes sense to me – but I’d like to add another very important point. If you are taking genuine risks, then however hard you plan you will fail sometimes – be prepared for that failure when it happens. That doesn’t mean expect to fail. Quite the opposite, if you’re taking on a challenge you’ve got to feel positive and expect to succeed. My point is that you need good strategies for dealing with failure – when it happens. Learning how to deal with failure successfully should be top of the agenda for someone taking Julia’s advice.

Confidence is a crucial factor in surviving turbulent times in the workplace, such as an economic downturn. In periods of instability, the volume is turned up on problems-solving, decision making, planning, and crisis management. There is more to do and often fewer people to do it with. When circumstances are assailing people from every side it is tough to keep up morale and to get people to remain effective.

To have the best chance of prospering in difficult times, leader must concentrate on five areas; Certainty, Purpose, Control, Connection and Success. In short, if you can make people feel more certain, more purposeful, more in control of their circumstances, more connected to their organisation and their work, and more successful then you have the best chance of emerging stronger once the storm has dissipated.