By recognizing the signs of turmoil in yourself and others, you may be able to step back to think and act more pro-actively and strategically.

An economy in distress, recession, lay-offs and cut backs, investment markets in turmoil - times are tough and getting tougher for lots of people in lots of industries. Business climates like these present us two big questions:

- How can I deal with the personal consequences difficult times may cause me as an individual?
- How can I, as a leader of my company, help the organization continue to fulfill our mission?

When things get rocky for the organization, employees must accomplish more with fewer resources. They must often change jobs, hours, or locations — or even worse, face job loss.

You can’t lead an organization through the changes of hard times by narrowly focusing on "toughing it out." Human beings are wired to experience change and loss in predictable, emotional ways that get in the way of "just do it" attitudes every time. As you face uncomfortable changes, and lead people who are doing the same, it’s helpful to know what happens organizationally and personally when change hits us.

Reacting to Change
First, looking at a whole organization, how do people in organizations adapt to change? The answer is: differently over time. Years of observation and research has shown there is a predictable bell- shaped distribution of response times to change — be it response to a new product in the market or adaptation to a new process or system in a company. In short, we need to remember that people don’t all adapt to change in the same way or at the same time. In any given organization faced with any given change, a small percentage of people are going to be “innovators” — the creators and leaders of change. Others tend to adapt and follow along with the innovators pretty quickly — they are the "early adapters." A somewhat larger group tend to adapt more slowly, but eventually come around. Then there are those who adapt much more slowly, or even actively resist change; these may take a very long time to adapt. Finally, there are the "never-evers." They just won’t change, period.

When changes are painful and severe, like downsizing and job cuts, you can well imagine how this adaptation curve will shift — fewer happy innovators, many more in the slow to adapt and resisting areas of the curve. There is bound to be more tension in the system, lots of pressure brought on by forced change no one wants, and lots of people moving into very slow adaptation or resistance. This predictable human tension tends to make necessary changes during these times even more frustrating and painful for everyone involved.

What about the individual? Individuals also have a fairly predictable response to change that involves loss. William Bridges’ research, presented in his book Managing Transitions, Making the Most of Change, Addison Wesley Publishing, 1991, shows that whenever people are faced with change, there is a natural personal and emotional response because change inevitably means the loss of something familiar and valued. Individual’s emotional responses, termed "transition" by Bridges, involves stages:

First comes shock — how could they do that? How can this be happening to me?
Then comes denial — this isn’t happening, I’m not going to deal with it!
Then the confusion, frustration and uncertainty — I don’t understand this! What is going on? What’s to be done? Why won’t they just tell me the answers I need? I don’t trust the system anymore and I don’t know where to turn, so I just churn. This is the stage of transition Bridges calls "the neutral zone."

With time to "heal," and with good leadership, people can get to a place of curiosity, and then hopefulness about a new beginning. Finally they become willing to take some steps to move forward from loss to the new beginning. Some people go through these transitions faster and some slower, but we all do it when change happens.

Recognizing the Impact of Change

Knowing the rate of adaptation to change is highly variable across the population of an organization and individuals predictably go through an emotional transition in facing change, what do you do with that information? Well, first, simply knowing why some of the tension in the organization exists and what is happening to your own and your colleagues' emotions should help you to be a bit more patient, more understanding of one another. Recognize that people will be experiencing shock, denial, the turmoil of the neutral zone, and that people will adapt to change at very different rates. Recognize the signs and try to not let yourself get swept into perpetual churning in the neutral zone yourself. By recognizing the signs of turmoil in yourself and others, you may be able to step back to think and act more pro-actively and strategically.

The Leader's Response
This leads to the question of "To what should I pay attention to help people and my organization get through these tough times?" Three variables that are often thought to be most important to creating a healthy and productive organization are:

• Job satisfaction
• Morale
• Commitment

Research shows that successful organizations and their employees boast high job satisfaction, good morale and strong commitment. It isn’t surprising that in tough times, these suffer. Jobs are more stressful. Perks disappear. People work in fear they will be laid off, grieve for friends who were, and become angry and frustrated with managers who are themselves anxious over production demands, rapidly changing circumstances and budget problems they can’t control.
Paying a lot of attention to job satisfaction, morale and commitment is not useful during these periods, either for the organization, or for individual employees. So what should we be paying attention to?

Three Pillars
One idea comes from the Harvard organization dynamics expert Chris Argyris, in a great little book called Overcoming Organizational Defenses, Pearson Higher Education Press, 1990. He argues to foster really healthy organizations our focus should be on three important pillars for the future:

• Learning
• Competence
• Justice

Argyris says that working on learning, competence and justice will build solid foundations for healthy organizations and employees during difficult times.

Pillar One: Learning
Almost twenty years ago Charles Handy, a British economist and business leader wrote a provocative book called The Age of Unreason, Harvard Business School Press, 1990. The central idea of the book was that in modern market economies, the pace of change is so great that no one can reasonably expect to have long term employment security. Handy suggested we should respond to this fact of modern life by dedication to learning. We need, he said, to change from thinking that we are a person with a position and a job to thinking we are a person with a portfolio of knowledge and skills that we constantly upgrade and add to. So for the individual, the pro-active response to tough times is: Assess what I know and can do. What’s in my portfolio? And ask - what is my plan to add new knowledge and skills to my portfolio? Learn as if you know the job you now have won’t be here in six months or a year — because in uncertain times there is a good chance it won't be.

Organizations need to be learning in tough times also. This means sharing responsibility to find out what isn’t working, and then working together to make corrections — instead of blaming the competition or the market or other external forces you can't control. I worked recently with a global manufacturing company, known as builders of the best quality equipment in their field. They have a solid, honest, hard working mid-western company culture. Yet, they have been losing market share, getting squeezed on prices, and seeing revenue, profits and share value go down.

They started to focus on learning as a company. They couldn’t change the economy, but they could try to change themselves. When they really looked at themselves hard, they realized they focused too much on their own products and not enough on what their customers actually wanted. So they set up ten teams across the company whose sole purpose was to learn more about their customers, the industries their customers worked in, and how the company could meet more of their customers’ needs within the selected industries. The company would have to develop new knowledge and skills extending way beyond their historically great products, and they’re still working on it.

Pillar Two: Competence
While successful learning gives us new knowledge and skills, competence means putting them to use. Difficult times require organizations to become more competent — and the employees who show the most competence are the ones who will survive, or be better able to move to another job if needed. I worked recently with a large international software company which is seeing fewer buyers willing to invest in their products. For several years they have talked about the value of teams in working with their clients. Teams can bring diverse skills and expertise to the client, foster better sharing of information, and offer more value to the customer. But as a company they weren’t particularly competent at working in teams. Our work with them has been to develop real competence in the customer teams — applying skills for how they plan and work together to create results they can measure.

To develop competence, you must be willing to take a hard look at the results you or your organizational are delivering. You have to ask hard questions like: What is actually being accomplished by our effort? What real value are we creating for the organization, the customer and ourselves? Developing competence means constantly testing the actual results against what is intended and honestly recognizing and correcting errors. It's increasing the organization’s and employees' capacity to solve problems — a strong edge in tough times.

Pillar Three: Justice
Justice is about taking action consistent with values and principles of fair treatment that apply to all employees — regardless of their position in the organization. To treat people with justice during hard times is the ultimate sharing responsibility. Do we work together or do we defend our own turf at the expense of others? Do we scheme to protect ourselves and our friends at all costs, or do we do what is best for the organization and its mission?
I helped a management group focus on justice in uncertain times a while ago. I was asked to facilitate a four-day meeting of the senior managers of the information technology organization in a multi-billion dollar consumer products company. These managers had to decide how to re-organize the information technology functions for the whole enterprise to save millions of dollars. They knew the reorganization would require consolidating operations from many sites in different states— with lots of jobs relocated and many eliminated. It was a sad and stressed-out group of people on the morning of that first day. They were expecting each other to fight for turf and for friends. Yet, these were basically decent people in a very tough situation. So instead of starting to talk about the re-structuring and consolidations, I had them talk about justice and values. What values and principles did they want to govern their decisions? What did they want the organization to think that they, as managers and leaders, stood for in this difficult hour? How would they want to be treated if they were outside the room instead of the insider decision makers?

Over the course of the first day, they made strong agreements about the principles of fairness they would apply in making their decisions: principles like: positions will be determined based on the good of the whole organization, not the personality or power of individuals; people being let go will be treated with dignity, informed privately before public announcements, and the company will invest in meaningful outplacement assistance and severance benefits for them; no one in the room would be exempt from possible job elimination just because he or she was part of the management team; they would share responsibility for all decisions made, no one would disclaim responsibility or blame the outcomes on others, etc.

Focusing first on justice probably didn’t make their job easier, but it created the possibility of trust, and they formed a more objective business outcome for the whole company, instead of one based on power, politics and hidden agendas. Change undertaken with commitment to justice and human dignity also made the transitions more livable for everyone.

For the Long Haul
In the end, tough times are transitory. Let go of worrying about job satisfaction, morale and commitment. Focus instead on Learning — how can you and the organization go out and get new knowledge and skills so the organization can accomplish more with less and you can have a bigger portfolio of skills to take with you if you have to leave? Focus on Competence — working hard together to solve problems and figure out the changes required to produce more results valued by your customers. Focus on Justice — work to build understanding and agreement on values and principles of fairness and then act consistently with those values and principles in all the hard decisions that lie ahead. Loss seems inevitable, but if people can see that there was justice and fairness, everyone will be better equipped to recover, and the organization will be better able to continue pursuing its vital mission when conditions turn for the better.