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Leadership through tough financial times

August 1, 2009
by James H. Collins, PhD
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Employees are becoming very nervous about the current economic crisis that the United States appears to be in and are unsure how it will affect their jobs and financial security. Increases in gas and food prices, an unstable stock market and diminishing 401K plans, a distressed housing market, and rising consumer debt are all on the minds of almost every employee. These fears may lead to lower quality and productivity, increase absenteeism, and destroy morale.

Employees are aware that facility operations are based on a preset budget. Many department heads are involved in setting the budgets, but more importantly, they are involved in maintaining their departmental budgets. Unforeseen circumstances, such as a decrease in census, a need for capital purchases or repairs, or increased food and supplies costs can result in frequent budget adjustments. But what happens to budgets during this economic downturn? What will employees think and how will they react?

There has been no better time than right now, in fact, for confident and motivational leadership in long-term care to emerge. It will steer employees through this current crisis. This article examines a new role for leadership and outlines the business strategies that can be used to help employees through rough financial times.

The new role of leadership

Effective leadership depends on recognizing how employees are being affected by events and how they feel, collaborating with them to form new or stronger relationships, and setting the course for working toward the common good. The new leader must be able to rally employees together both in good times and bad, have courage and competence in making tough decisions, be sharply focused on goals and a new vision, and lead employees with great passion and compassion.

New leadership strategies

With the goal of this type of leadership being to build a stronger team, ride out the storm, and come out better than before, there are a number of ways to achieve this.

Manage yourself. Great leadership requires that the individual truly knows him- or herself. One must be honest about one's natural talents and obvious weaknesses. To truly lead or manage a team, one must be able to manage one's self. This means that the leader is willing to take on extra projects, keep an eye out for extra personal expenses that can be cut, and lead employees by example, both verbally and nonverbally. Managing one's self as a leader also means managing one's own stress. This is no time to panic. More information on the effects of stress on health, relationships, and work is available at http://www.apa.org/releases/stressproblem.html.

Define a new vision. Another important leadership technique involves creating and communicating a new vision for the staff, facility, or perhaps the entire company as a whole. It is important that the vision be positive and motivating, e.g., “We are all in the same boat together. We will not sink, but will swim safely to shore together”-a new vision that the leader communicates on a regular basis. An ideal vision helps employees to look beyond the negative economy and search for a better tomorrow.

Defining a new vision may also mean reprioritizing projects, goals, and jobs within the facility. One of the most important keys to becoming a great leader, in good times or bad, is being able to prioritize what needs to be done sooner than later, and then effectively and efficiently follow through. When reprioritizing, remember the Pareto Principle: “Twenty percent of your priorities will give you 80% of your production, if you spend your time, energy, money, and personnel on the top 20% of your priorities.”1

Communicate often. There may be no better way of leading employees through tough times than to meet regularly and talk about what is going on in a genuine and open manner. Keep staff informed about any changes that may take place in the facility-changes in policies and procedures, staff cutbacks, and departmental budget restraints. Secrecy simply will not work when times are tough. (It rarely works when the economy is good.) Straight talk is prescribed in this situation. Sugarcoating may insult some employees and create distrust among others.

What else needs to be communicated to employees when times are economically unsound? Ask employees where adjustments can be made or where money can be saved. They may have some very interesting and creative ideas, and the exercise can certainly enhance staff teamwork, ownership, and empowerment. Ask employees to voice their reactions and concerns and, when they do, address them openly and honestly. Don't allow fear to take over the facility. Ask that employees refrain from creating a culture of complaints but, instead, come up with solutions to problems. Be clear about the challenges being faced and promote the ideal of partnership among employees. Also, don't allow long periods of time to go by without addressing issues. Much negativity can fester during long periods of leadership silence, and allowing employees to fill in the gaps with their imagination can make things worse.

Hold regular in-services on special topics. Hold regularly scheduled in-services on each shift to help employees effectively handle changes and manage their own reactions to the current crisis. Topics can include: Stress Management, Caring for the Caregiver, Work-Life Balance, Time Management, Conflict Resolution, Customer Service, Team Building, Motivation in the Workplace, Managing Finances and Budgets at Home, Reducing Expenses at Home, and many more.