Just today I was having an interesting conversation about leadership in harsh economic times, and in particular the way some leaders react to bad news, circumstances they have never encountered before in the marketplace, and doom and gloom.  Some leaders act, but most tend to react or wait.  The latter two options are part of common human response to alarm - panic and procrastination.  Panic is based upon fear of the present.  In other words things are so bad, the need for change is paramount, and so anything but where we are now must be better than the status quo.  As a result we focus on action without thinking things through clearly because we are overly emotionally stimulated through fear or we simply meekly follow what everyone else is doing in the belief that "well, if everyone is cutting back then so should we."  Procrastination is based upon fear of failure and the desire to get things right first time.  The result is paralysis and  a strong tendency to wait and see what everyone else does, see what works and doesn't work, and then act only when we know for sure we've done it right.  The problem is we wait too long.

Successful leadership in the here and now are those leaders prepared to think for themselves, take a close look at not only expenditure but the way the business operates, take a close look at people, and be prepared based upon sound logic and a good strategy to do what is right for the business and NOT just because everyone else is doing it.  Take a close look at wage and operating costs?  Absolutely.  But this should be part of regular business practice anyway, not a knee jerk response based upon fear.  People are on the balance sheet, and some are assets and others are liabilities.  If you cut your assets then where are your advocates and brand champions, your skilled people, and your management talent that generate productivity both in good times and bad?  Take a close look at systems and procedures?  Absolutely.  But don't add more bureacracy than necessary or add further unproductive elements to existing processes that generate more control and yet impair flexibility, innovation and creativity.  These are just two areas commonly looked at when a business is struggling to name a few.  Good leadership through a recession is prepared to ask the hard questions, do what is right based upon evidence rather than what is normal because others are doing it as well, and think outside the square in order to survive.  To quote the economist John Maynard Keynes "The greatest difficulty in the world is not for people to accept new ideas, but to make them forget about old ideas."  Good business leaders in 2009, and those most able to guide their companies and teams through turbulent waters and an economy lacking in confidence, will be those that remove old and obsolete ideas about business faster and more effectively than anyone else.