Principles of Management for Uncertain Times

We are in the midst of economic uncertainty, and no one can accurately predict how long this crisis will last and what the long-term ramifications from this crisis will be. The only certainty is that the business practices that we have relied on for decades will require change. That means that business management philosophies must be altered to meet the forthcoming challenges.

The current business environment will require managers at every level to provide the leadership necessary to navigate the organization through the impending economic turmoil. A competent manger must always possess certain key traits to be an effective leader, such as accountability, confidence, and integrity. In these challenging times, a manager must also be organized and maintain the skills necessary to supervise and direct employees in an effort to advance the implemented goals and strategies of the organization by communicating effectively and engaging in conflicts productively.

Managers must provide the leadership required to facilitate the required organizational change. There are six leadership traits that are essential to managing through change in uncertain times:

1. Ethics

2. Communication

3. Involvement

4. Spirit

5. Flexibility

6. Vision of the future

Ethics

Business ethics is by definition “the moral standards by which a company conducts itself.” The company’s leaders and managers have a personal obligation to conduct themselves and the organization’s business practices in an ethical manner. Companies with unethical business practices have lined the front page of the nation’s newspapers in the last decade, perhaps none bigger than Enron and Arthur Anderson, whose demise can be directly attributed to unethical practices of top management. In some respects, the current global economic crisis has been propagated by unethical business schemes.

Business ethics is divided into three equally important categories: non-discretionary, organization specific, and discretionary.

Non-discretionary ethics includes universal items that allow for zero tolerance if they are violated. These include laws and regulations, public and employee safety, and truthfulness in financial statements.

Organization-specific ethics involves policies and procedures that the organization adopts as the ethical standards that cannot be compromised. The organization’s ethical standards should be clearly defined in the employee manual and referenced in its mission statement. It is the responsibility of all personnel to be familiar with these standards. It is management’s responsibility to ensure that these standards are upheld throughout the organization. Furthermore, management should enforce a no-tolerance policy for unethical behavior.

Discretionary ethics typically involve those issues that are not necessarily illegal or against the organization’s standards; however, they may still be perceived as unethical actions. The manager must set the organizational standard by acting in a fair and honest manner in all business dealings. Telling a “white lie” to close a sale is an example of discretionary ethics. Typically, these are issues that have to be conducted at a personal level. Asking such questions as “Will you be comfortable and guilt-free from your behavior in this matter?” or, “Does this behavior match stated guarantees or commitments?” could go a long way in determining the proper ethical response.

The best way to help ensure ethical conduct is through focusing on the three R’s: respect, responsibility, and results.

1. Respect. Respect is required at all levels of the organization, both internally and externally. Obviously, respect is required on a personal level and should be granted to all co-workers, customers, and vendors by treating them with dignity and courtesy. Respect for the organization and the work environment is equally as important. All members of the organization can protect the work environment by following the established rules and regulations regarding use of equipment and materials and by using organizational time effectively. Using equipment for non-organizational activities or taking office supplies (“because everybody does it”) is disrespectful and unethical. It is also unethical for an employee to spend large amounts of time on non-organizational activities during work time, such as updating social media accounts or managing fantasy sports teams. These are activities that should be completed in moderation during work breaks or at lunchtime.

2. Responsibility. It is the responsibility of all members of the organization to provide timely and high-quality goods and services to the customers. The community’s perception of the organization should be that they would uphold and follow through with all commitments in a legal manner. In simple terms business dealings should be completed by looking a person in the eye, making an agreement, and having trust that the agreement will be completed to the best of the organization’s abilities.

Each member of the organization has the personal responsibility of working collaboratively with others and ensuring that their work performance adds value to the organization and meets the expectations of management.

3. Results. Results are the measurement in which the organization is evaluated. Ethical results are only achieved when an organization derives them in legal and moral manners. Most unethical behavior in business occurs by falsifying results — typically by providing false financial statements. This was certainly the case in two of the biggest business collapses of the last decade — Enron and Arthur Andersen. To some extent lending institutions that falsified their results started the current economic crises that we are entangled in.

It is the responsibility of management to define the organization’s ethical standards and to ensure that all unethical practices will not be tolerated. It is the responsibility of the employee to follow the ethical standards and maintain personal responsibility for their actions. Ethical behavior can be achieved by following these five maxims that are important in all phases of our lives:

1. Don’t take what is not yours.

2. Don’t accept what you have not earned.

3. Maintain confidentiality.

4. Be honest.

5. Don’t bend the rules to get results.

Communication

Communication is key to success in any organization, and an effective leader must be a good communicator. It is even more critical in uncertain times that management keeps an open line of communication with the employees, customers, and vendors. Constant communication is vital in providing all essential information regarding the organization. The message must be articulated in a manner that is clear and understandable to everyone.

The message must be consistent at all levels of the organization, and studies indicate that repetition is often required for understanding. The most effective leaders are open and honest in all communications. Uncertainty can make it difficult to access the right direction in the business environment. Effective leaders will present their vision of the future with honesty and humility, and simply level with people by acknowledging there are limitations in forecasting future trends and that the current strategies may change. Honesty and transparency will earn creditability from all levels of the organization. This will go a long way in gaining the employees’ trust.

An effective communicator is also an excellent listener. It is important that communication flows at every level of the organization. Some of the best intelligence that you gather will be from frontline employees who interact with customers and suppliers. Their feedback can be valuable in determining the existing business climate and developing future strategy. It is also important that you listen to any ideas they may have in improving operations. By asking for their opinions (and implementing their ideas when they make business sense), it can not only lead to cost-saving procedures but it will also elevate the employees’ commitment to the organization.

The flow of information can be provided in various forms. The most effective method is through staff meetings. When change is fluid, it is imperative that meetings be held more frequently. Depending on the size of the organization and the speed of change in the business climate, it may be required to meet on a weekly basis.

Exchanging information on methods, initiatives and processes will benefit the organization. This can be accomplished through internal forums that state the organization’s goals and benefits. It is important to provide internal and external stakeholders with timely updates regarding the organization’s progress in reaching these goals. Communication can be provided through the regular maintenance of intranet and internet sites that also provide the organization’s policies, procedures, points of contact and other resource information for employees, customers and vendors. The best workforce is an informed workforce.

Involvement

Due to the rapid changes occurring in the business world, it is no longer permissible for company leaders to sit in their “ivory towers” and manage through delegation. The managers must make themselves available to every level of the organization to obtain all relevant information concerning performance. An effective manger must jump right into the game; this is not the time to sit on the sidelines and watch. Nothing can be accomplished by managing from the outside.

A prime function of involvement is to ensure a continuous focus of the organization’s operations. This can be accomplished through a series of meetings with senior management and specially assigned task groups. Senior management personnel should conduct quarterly meetings to review strategies and ensure that the organization is taking full advantage of its capabilities in meeting these strategies. The implementation and review of new products and/or processes should also be discussed in these meetings.

Management should also assign a task group within the organization with the responsibility of defining best practices. Management should meet with the task group on a regular basis through a series of briefings or updates to determine the progress of implementation of these practices.

Top management should be accessible to the employees; this can be accomplished by frequently walking the plant floor or by eating lunch in the employee cafeteria. Accessible managers give employees a sense of comfort regarding the direction of the organization.

Spirit

The manager will be charged with firing up the employees in uncertain times. This is of particular importance in organizations that have had a significant reduction in the workforce. Employees that have remained may feel threatened by the potential loss of their job or may be overworked from taking on extra duties due to staff cutbacks. A recent poll of American workers found that nearly 40 percent of employees are worried that they are going to lose their job within the next twelve months.

This troubling statistic illustrates the need for organizational leaders to inspire employees because a motivated workforce is a more productive workforce. People need to feel needed and wanted and they need to realize that they can and do make a difference. An effective leader can promote spirit in an organization in the manner in which a coach inspires an athletic team.

The first step in this process is to make certain that the organization still has the fundamental core vision that may have attracted many of the employees. Troubled economic times have forced many companies to diversify their products and markets to stay solvent. If these changes have altered the organization’s original core vision, some employees may feel alienated and become dissatisfied with their new role. Now is the time to evaluate the core vision of the organization and clearly define the mission moving forward.

Spirit is encouraged through team building. Management should promote collaboration among the employees give everybody an equal opportunity to participate. The employees need to feel valued, and setting goals and tracking the progress towards the goals can achieve this. Everybody has an internal desire to win, so if you set achievable goals, employee morale will increase as the goals are met.

One area where a manager can build team spirit is at staff meetings. It is the responsibility of the manager to ensure that these meetings are used as a time to enforce a positive message about the organization. The focus should be on making the meetings effective by exchanging information and discussing viewpoints and ideas that will aid the organization’s future growth. The overall spirit of the organization will be positive if the purpose of the meetings is to pull people together to solve problems rather than focusing how bad the problems are.

Flexibility

The only thing certain in today’s business climate is change. The manager must be able to navigate the organization’s strategy through an uncertain climate. To effectively manage change a configured response is required, the manager should not rely on an adherence to pre-figured routines. An important attribute of a manager is that they must be flexible and have the ability to drop whatever they are doing to tend to the more pressing issues as they come up.

Flexibility is also required in planning. The organization should follow the action-feedback model by planning and acting on information in short intervals. During times of consistent change, it is best to treat everything as a temporary measure.

Vision

A key role in leadership is setting the direction of the organization and then influencing people to follow. Even in these tough economic times, an effective leader should have an eye towards the future in charting a path for the company’s growth. All organizations require growth at some level to succeed. Growth does not necessarily have to be in the number of employees or physical sites; it can be measured in such important business variables as effectiveness, quality or production.

An important attribute of a good leader is to provide vision for the future. Vision is achieved by long-range planning and is most effective when the organization has a true vision statement. The most successful leaders write down their goals, values, and visions for the organization and use them as a barometer for performance.

A vision statement — or a mission statement as it is sometimes referred as — defines the organization’s long-range planning and identifies the steps required to achieve success. To establish a successful vision statement, the company’s core values must be defined. Unless the long-range planning is intended to stir the organization away from its core business — a tactic almost never recommended — the vision should focus on improving sectors within the organization’s core values.

A vision statement can be prepared by answering a few questions about the current state of the organization, including:

· What are the core values of the organization?

· What does the organization do best?

· Which sectors are growing and what is required to compete in the future?

Once the vision statement is prepared, it should be shared with all stakeholders in the organization and management should define their roles in meeting this vision. The vision statement should be referenced at all strategic planning meetings to determine if the set goals are being accomplished.

Successful leadership involves making key decisions that affect an organization — and then following through on those decisions to accomplish the desired results.

About the author: John A. D’Annunzio is President of Paragon Roofing Technology, Inc. a Construction Engineering Firm he founded in 1989. He has published over 100 articles and has written four books on building exterior issues. For more information, visit www.paragonroofingtech.com.

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