The downturn is the ideal time for business leaders to develop failure-detection skills

Abraham Lincoln put it very eloquently in a different time of testing: “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise to the occasion. As our case is new, so we must think and act anew.”

During tough times companies need to be able to rely on the best leaders to adapt quickly. Arising from a battlefield, where winners have not yet been identified, these leaders (senior executives or even board members) have already started to adjust their profiles and competencies in order not simply to face the new reality but, to a certain extent, determine it.

After all, it is important to remember during times such as these that one of the great aspects of the modern economy is its dynamism and ability to change.

Today’s senior executive is undoubtedly international and multicultural. Over the past decade the expatriate executive has became a feature of the typical multinational organisation, and the talent shortage of recent years (which is still there despite the recession) has been an additional driver for this mobility, along with the dramatic changes in corporate culture and the breakdown in corporate loyalties.

These changes, combined with the sharp financial recession, have urged the leaders of companies to stock up on their emotional intelligence.

Emotional intelligence is a combination of personal and social competencies that determine how we manage ourselves and include self-awareness, accurate self-assessment, self-confidence, self-regulation, self-control, motivation and commitment.

Different competencies such as empathy, developing others, political awareness, influence and conflict management surely determine how we manage relationships.

Today, just like after any other ‘war’ there is a crisis in the values and ethics that were once considered sacred but have since collapsed. In order for senior executives to be able to sustain personal and company success in an era that companies, economies and people’s lives are changing, and mistrust has intensified due to malpractice, he or she needs a lot of emotional flexibility, endurance and adaptability.

This has also led to a shift from a specialised view to a more generalist approach, allowing senior executives to move not only across companies or countries, but also across sectors.

Cross-industrial experience is not only valued but often preferred as it provides the opportunity to offer new insights and perspectives.

Furthermore, even during a downturn, the struggle for talent does not disappear. Senior executives have found themselves getting directly involved in talent management within the company, especially when working with their senior team.

This is not the time to accept a team as it is or be easily satisfied with only moderate improvements. Given the challenges it makes sense to take the time to focus on getting the senior team dynamic right, whether through training, internal resource allocation, replacements or managing politics.

This is not the time either to easily accept failure. The economic downturn has been a particularly opportune time for senior executives to develop their failure-detection skills, which will guarantee that failure blindness is avoided and also ensures that activities and people likely to have a negative impact on the company are rooted out.

Finally, as a result of the financial crisis, senior executives have found themselves managing global emotions. When fear became endemic, paralysing decision-making in companies across the world, senior executives realised that it was up to them to be in the right place emotionally, in order to inspire, motivate and support their teams to move forward.

These changes dictated a change of focus on all the companies that deal with senior executives. This began when executive consulting firms realised that they needed to identify their own talent from within and was followed by the realisation that their clients no longer needed to simply identify the right person for the job from the international market.

Lou Gerstner, chairman and CEO of IBM, outlined that “transformation of an enterprise begins with a sense of crisis”. Witnessing now the inevitable transformation, the question is whether one leads or follows the change.

Panos Manolopoulos is the managing partner at Stanton Chase International, Middle East. The opinions expressed are his own.