Leadership in the Era of Economic Uncertainty: The Rules for Getting the Right Thing Done in Difficult Times

Citation

Butler, C. (2010), "Leadership in the Era of Economic Uncertainty: The Rules for Getting the Right Thing Done in Difficult Times", Leadership & Organization Development Journal, Vol. 31 No. 1, pp. 97-97. https://doi.org/10.1108/01437731011010416

Ram Charan prescribes this set of rules for surviving in a chaotic global business environment. Recessionary pressures impact on the firm and the prevailing economic and selling conditions are turbulent. Leaders need to react quickly and demonstrate their skills in controlling, planning, organising and leading. New mid‐management may be required for these new conditions.

The rules emphasise speed in decision making and execution. Frequency of meetings should be increased from monthly to weekly. Communication from all divisions and departments should be real‐time and unfiltered. The leader should re‐assume total control of all operations. Reading the current and future economic conditions will assist in decisions to cut costs immediately even if sales are currently not in decline. Ram Charan explains why brand cannot be sacrificed in the short term, why information technology budgets should be reduced in this turbulent environment and why every customer should be reviewed and possibly dropped. These actions allow greater attention and relationship building with better customers (loyal customers, larger customers, customers who pay on time).

The toxic environment means protecting and generating cash and ensuring the firm avoids problems of lack of liquidity. The leader should be in the “fox hole” on the “front line” strengthening relations with customers and suppliers. The optimism of the pre‐recessionary global environment led to increased and substantial risks. Ram Charan explains where in the firm the leader should make strategic, structural, financial and operational changes.