Executive Leadership Strategies When Volatility is the New Normal

Thu, Jul 22, 2010

VolatilityConsider this. Economic pundits have declared that volatility is the New Normal. Markets are fluctuating wildly day to day. Executive officers, guiding their companies, are afloat in a sea of uncertainty. Investors generally take fewer risks during volatile times. It takes guts to invest when the downside may be greater than the upside. It also takes courage to make major business decisions.

Negative Emotions Make Things Worse

My research suggests that negative emotions like fear lead to actions that further complicate human dynamics. For instance, a leader paralyzed by fear decides not to make any decisions, for fear of making the wrong one. Others take this cue and also discuss but don’t settle on a direction. Analysis paralysis sets in. Decisions not made at one level are escalated upwards. Soon, the senior team is being asked to decide about minor expenditures. Business grinds to a halt.

My research also suggests that effective leadership in volatile times requires that leaders be adept at sensemaking, that is, making sense of what is important and not, and monitoring risks along the way, are more successful during volatile times. Those with emotional stamina, or the ability to recognize that they are afraid, and act anyway, are also most successful.

Some of us are more adept than others when things are going well, or are routine. It is when we are living in a constant state of non-routine that we are tested.

We can learn a lot from jazz musicians. Jazz musicians are typically classically trained. They can read and play music flawlessly. A good jazz musician learns how to sense changes in the routine score, and by careful listening can adapt, and improvise, to make beautiful music. The skill of being attuned, or making sense of changes, is critical to producing good jazz music.

This skill of being attuned to one’s own emotions, the emotions of others, and changes and fluctuations in business conditions is also critical. Many years ago, I managed the implementation of a risk and empowerment training program at a major high technology corporation. We taught executive leaders that one should never bet more than they were willing to lose. When volatility is the new normal, it is important to hone your risk taking skills.

How prepared are you to thrive in this New Normal?

Are you a good risk taker? How adept are you at making sense of a volatile and uncertain environment? Can you improvise and make course corrections? These are just some of the skills required to thrive.

describe the imageExplore how prepared you and your team are to succeed in this current business environment. Contact me for complimentary 15 minute telephone consultation. 

Marcia Ruben Ph.D, PCC, CMC

Marcia Ruben Ph.D, PCC, CMC

Lists by Topic

see all

Posts by Topic

see all

Recent Posts