Viewpoint -- A Time When Management Is Not Enough

Two people were talking. One person was relating the revenue losses, the salary freezes, and the series of layoffs that had been taking place in his company. He mentioned the loss of employee morale and noted that senior executives seemed unusually distant from the other employees in the company. His friend listened quietly for several minutes and then said, "It sounds as if your executives are managing when they should be leading." His point was well-taken. It is one thing to manage a bad business situation, to shut down marginally profitable operations, to jettison workers for whom there are no immediate jobs, and to put pressure on suppliers to cut prices and bear a bigger burden of carrying inventory. It is quite another thing for executives to demonstrate leadership in a bad business situation by acting to meet both the short-term reality of the marketplace and its longer-term prospects, by seeking and implementing suggestions from employees on ways to do things better, smarter and cheaper, and by sharing in the short-term sacrifices they are asking others to make. Simply managing a bad business situation -- when it focuses solely on financial damage control -- is based upon the dubious proposition that a manufacturing company can shrink itself into unconditional success. In contrast, leading in a bad business situation -- looking not only at the numbers -- is an opportunity to rearticulate vision, re-examine strategies and tactics, renew a common sense of purpose and re-energize for the challenges -- known and unknown -- that lie ahead. The distinction between managing and leading is not academic, the kind of stuff suitable only for classroom debates and dueling treatises in professional journals. The inescapable fact is that this is a time when it's not just one employee talking to a friend. This is a time when millions of workers are worried about their companies and their jobs. And especially since Sept. 11 this truly has been an extraordinary time -- and not just a time of extraordinary charges. Think about it. Think about the events of Sept. 11 in New York and Washington and the effects they have already had on the ways your company and other companies are doing business. Think about the sense of personal vulnerability that remains a part of almost every person's daily life. Think, too, about a serious U.S. economic recession that has yet to reach its depth and a recovery that promises to be ragged and later rather than sooner in coming. And think about an economically connected world in which reduced revenues, restructuring charges, and net operating losses aren't bad news for only companies in the United States. However, in a world changed by the events of Sept. 11 and a world still in the throes of economic challenge, CEOs, COOs and CFOs aren't the only people who are counting their losses. For example, more than 1 million people in U.S. manufacturing who are not senior executives have lost their jobs since July 2000 -- and more manufacturing workers will join the ranks of the unemployed as the U.S. jobless rate rises to 6% or higher in 2002. Even among the "survivors," these are the kind of things that shake confidence in companies, that depress employee morale and that impair productivity. This is a time for more than broadcast e-mail messages from senior executives, communications that state the obvious about business conditions and then with seeming clinical coldness present the news about the pay raises that must be foregone, the promotions that won't be approved, and the pension contributions that won't be made. This is a time for senior executives to show leadership by standing tall and being seen, to be sure. But even more important this is a time for senior executives to show leadership by being accessible. In the 1970s and 1980s, much was made of managing by walking around. It's time for management again to take a walk. To go to the place where people work. To seek out employees. To be ready and available to answer the questions that people have. A time for senior executives to share with employees their concerns and their uncertainties. A time for senior executives to openly acknowledge that they have no monopoly on best practices and better ideas. A time for senior executives to help their companies renew senses of purpose by encouraging and implementing the best and the better regardless of with whom these practices and idea originate. This is more than management. This is leadership. And this is a time for executive leadership, a time when management simply is not enough. John S. McClenahen is an IW senior editor. He is based in Washington.