Leadership in Crisis

By Jeff Wolf

Eight Steps to Avoid Common Mistakes and Pitfalls.

Pick up any newspaper and you'll find countless stories of rampant political corruption, financial mismanagement, government bailouts, pandemic employee layoffs, investment fraud and unadulterated corporate greed. Pundits squawk over the business scandal du jour while chastising Americans for our insatiable love of “stuff”—and our inability to pay for it as we live above our means.

As a member of the credit and collection industry, you have an up-close-and-personal view of the aftermath. The Fitch Retail Credit Card Index reported that “60-plus day delinquencies have risen nearly 24 percent since August, reaching 4.8 percent,” according to a Dec. 12, 2008, CNN story. Fitch expects charge-offs to surpass 12 percent in the first six months of 2009 (up from 9.1 percent).

As collection professionals face unprecedented challenges, it's essential for firms to avoid their own potential leadership pitfalls. Management must make a concerted effort to keep employees motivated and productive, while building teams and reducing stress levels.

This eight-step plan can help managers maintain a healthy and happy, yet disciplined, workforce.

Step 1: Flaunt Your Honesty
Today's leaders must be honest and forthright. Workers want their leaders to be role models whose allegiances and priorities are beyond reproach. We've seen far too many leaders who have lied and manipulated people, finances and processes to fit their own needs. Companies like Arthur Andersen and Enron have closed, leaving many innocent people in the lurch. Their life savings have been wiped out and their careers have been sabotaged.

In the credit and collection industry, leaders must have character and integrity, which means walking the walk and talking the talk. The moment leaders bend the truth, they'll lose their credibility—and they'll never get it back.

Step 2: Focus on Your People
Regardless of the size of one's business, people make a company. Without highly motivated and inspired employees, an organization will struggle to survive.

Motivated people provide a competitive advantage. Leaders determine whether your company has employees who are motivated to go to great lengths to meet their responsibilities or employees who are just warm bodies who show up for work and merely go through the motions while collecting a paycheck. Great leaders motivate people to work together and achieve greatness, and they instill confidence and earn employees' trust—a commodity that can never be bought.

Step 3: Develop a Corporate Vision
No leader can succeed without a clear, compelling and inspiring vision, which must be communicated in a way that everyone understands. Only then will people be motivated and inspired to work as a team toward common goals.

Leaders must clearly define and paint an exciting path to the future, while providing fundamental, ethical and logical reasons why they're moving in a specific direction. They must articulate a clear framework and provide a very cogent message that delineates each individual's role in realizing the vision. This builds support and enthusiasm, creating an environment where people are aligned and eager to participate in achieving company goals.

Leaders must also create excitement and spark people's imaginations of what the future holds. When strategies, objectives and paths to success are clearly defined, individuals, teams and the organization as a whole will be motivated, inspired and energized.

Step 4: Correct Negative Habits and Behaviors
Studies have shown the number one reason people leave organizations is the boss—an unfortunate commentary on the state of leadership in the 21st century. Some characteristics of a poor leader include:

• The need to control and create an atmosphere of negativity, coupled with rare—or no—praise and recognition.
• The inability to keep one's word, poor treatment of people, taking credit for others' successes and a habit of blaming others for one's personal failures.
• Placing blame on others to cover up mistakes a leader has made—a behavior that usually results in high turnover and a lack of engagement by those who stay.
• Failure to delegate or empower people. Instead, poor leaders micromanage others' work. Their inability or refusal to develop an atmosphere of trust deprives people of opportunities to grow and gain the confidence necessary to succeed. By controlling people and undermining them in front of their peers, these leaders ultimately damage their companies. If this behavior goes unchecked, there may be a point of no return that destroys a once-productive company.
• Promoting employees based on technical know-how, high performance or attrition. These individuals are frequently thrown into the leadership role without any kind of basic training—not even a management boot camp. Is it any wonder they're criticized for underperformance? Let's face it: We'd never expect a poorly trained physician to cure us. How, then, can the business world expect ill-equipped leaders to lead without appropriate training? We set them up for failure, and a formerly top-notch employee, through no fault of his own, suddenly becomes an albatross.

That said, poor leadership is usually correctable if swift action is taken.

Step 5: Invest in Training
Leadership is a learnable skill. In fact, most first-rate leaders aren't born with extraordinary abilities; rather, they develop their skill sets by learning, practicing and refining them on a daily basis.

Just as a competitive athlete trains to win, leaders must commit to working hard, adopting a positive attitude and demonstrating a desire for constant learning. They must also understand their leadership style will change over time and, as circumstances dictate, they should remain flexible.

Budding and aspiring leaders must create a plan, put it in writing and then “work it.” Research proves people who put their goals in writing are usually more successful.

More concretely:

• Read as many books and attend as many training courses as possible, both within and outside the company. Vary courses so you can experience a broad spectrum of leadership skills.
• Identify areas in which you must improve, as we all have blind spots. We may be aware of some of our weaknesses, but it's truly impossible to see all of them. Working with a coach is a powerful way to improve your leadership skills. Under the right circumstances, one-on-one coaching, with an objective third party, can provide support that other training methods simply cannot. Coaches are attuned to one's unique individual needs.
• Learn what your company looks for in its leaders. See if there's a competency model that identifies successful leaders' strengths and characteristics. Study this model, and be sure to practice the competencies. If no such model exists, seek out successful company leaders and talk with them to gain a better understanding of how they became successful.
• Volunteer to lead small projects, which will provide useful leadership experiences. You'll gain confidence and enhance weak skill sets.
• Use 360-degree feedback and other assessment tools to identify leadership competencies and skills. This provides a valid measure of the areas that require work. Leaders must understand how their behavior is perceived by others to effectively change their behavior, and 360-degree feedback often solves this problem.
• Always be curious. Seek new opportunities and experiences, and always be open to trying something out of your normal comfort zone.

Step 6: Develop Leadership Programs
Coaching used to be thought of as a tool to help correct underperformance. Today, it's used to support leaders, top producers and employees with potential in an effort to enhance individual capabilities.

Coaching is one of the most important leadership responsibilities. When leaders take the time to coach, people become more confident and motivated, which leads to higher performance and productivity. Leaders build relationships on trust and encouragement, and they need to support people so they can realize their potential.

Research studies demonstrate that organizations with a strong coaching culture develop much higher levels of employee engagement and performance.

Coaching helps people overcome obstacles to their success. Because coaching is based on trust and confidence, leaders must take the time to get to know each employee. The coaching process will bring to the forefront:

• At what do employees excel?
• What are their weaknesses?
• What is their potential?
• What are their limitations?
• Where do they want to go in their careers?

Hiring a professional coach to identify and change detrimental behaviors can prove invaluable. Changing an old habit and developing a new one takes time. A coach works one-on-one with key personnel to abandon bad habits and adopt more positive ones. Participants can discuss what's working—and not working—with their coach, in complete confidence, and the coach will hold them accountable and be there for support when needed, which proves extremely valuable.

Step 7: Retain Personnel
Retaining high-performing individuals is one of the most difficult problems facing organizations today. There's a war for talent, and most organizations are losing it as headhunters and competitors vie for the most accomplished candidates. What makes retention even more challenging is our mobile society: Top performers may not even think twice about leaving.

Great organizations view employee retention as a competitive advantage, and they work hard to retain their most talented people. They understand that talented people are their most important asset.

Retention starts with culture. If you want to keep your top talent, you must create an inspiring and energizing culture of which they can be a part. This means having an organization with shared values, openness and honesty, thereby creating trust and allowing talented people to voice their opinions and share ideas.

You must empower and encourage people to aspire to do great things and be innovative, and then you reward their successes. High performers want to be challenged, provided with interesting work and have the ability to make a difference. Leaders must recognize that everyone is motivated in different ways and should take the time to find out what motivates each person. If you can pinpoint these motivators, you can work with your staff to achieve extraordinary results.

Continually praise and recognize individual achievements, and make people feel good about themselves and their accomplishments. Be accessible, listen to their suggestions and ideas, and keep them informed of everything that affects them.

Be certain you place them in the right positions. All too often, we place people in jobs to which they're not suited. A specific job may not be challenging enough, or individuals may lack the required skill sets. We always want to make sure the fit is correct.

Continually look for signs of dissatisfaction. Asking questions and receiving feedback are great ways to find out if people's needs are being met. Leaders should ask their high performers questions like:

• What can we do to make you happier here?
• If the organization could stop doing one thing, what would it be?
• What's challenging about your work?
• What motivates you to work harder?
• What are the greatest obstacles to getting your work done?
• What resources do you need that you currently lack?

These questions will open a constructive dialogue that allows you to discover talented people's needs. Once you gain awareness, you must work quickly to fulfill these needs.

Lastly, provide continual education and training so leaders can grow and learn new ideas. Only then will you be able to provide a career path, with opportunities for growth and advancement.

Step 8: Don't Forget to Have Fun!
A recent Gallup poll revealed 70 percent of the workforce is disengaged—and the longer they stay with a company, the more disengaged they become. If people wake up every day and aren't excited and energized about going to work, something must be done to change this. After all, the average worker spends one-third of his or her time at work. An Industry Week poll found that 63 percent of employees find work anything but fun—a distressing revelation.

Fun in the workplace must be part of an organization's overall strategy. People should not only work hard; they should also have fun. These are not mutually exclusive concepts, and the organization must embrace this principle. Are you aware that some companies have two CFOs: the traditional chief financial officer and the chief fun officer, who's responsible for creating ways for people to have fun at work? People rarely succeed at anything unless they have fun doing it. When you have fun at work, it makes training and teaching easier. In fact, fun is an excellent teaching tool.

And here's an especially noteworthy phenomenon: Having fun at work also has a major effect on the bottom line. Fun breeds creativity, prompting energy levels to rise. This energy is contagious, and productivity soars. As the company enjoys increased productivity, innovation increases. New ideas and concepts take flight, and the bottom line improves considerably—a win-win environment for everyone concerned.

Jeff Wolf is president of Wolf Management Consultants, LLC (http://www.wolfmotivation.com), with offices in San Diego and Chicago. He has been featured on NBC and FOX TV, and is the author of Roadmap to Success: America's Top Intellectual Minds Map Out Successful Business Strategies. His new book, The Essence of Effective Leadership, will be released in 2009.

He may be reached at jeff@wolfmotivation.com.