August 11, 2011 7:27 AM

Don't Let the Bear Market Ruin Morale

By: John Baldoni

Just when you thought it was safe to go back in the water.
That was the tag line to the sequel to the blockbuster Jaws. And while Jaws II was scary, it did not carry the wallop of the first movie. I am thinking the same about the financial crisis the US is facing today with falling prices in the capital markets. What the country is experiencing today is not a repeat of 2008, but it is frightening enough.

And when there is fear, the demand for leadership intensifies.

In my last post, I discussed the need for courage and leadership in Congress. But business leaders also need to step up and explain the situation to your teams. Be upfront--but don't push people into despair. You can provide reassurance by sharing what you know. Keeping people informed is a positive act, even if the news you share may not be so rosy. The act of communicating positions shows you're a straight shooter, one who can be trusted. And to quote legendary basketball coach John Wooden's maxim, "Don't let what you cannot do interfere with what you can do."

1. Explain how the crisis affects your business. Call a meeting with your staff and explain how the current crisis affects or does not affect your business. For example, as the Wall Street Journal reported, the slowdown in government spending will have fall out on the defense, medical, construction and education markets. Is it too soon to know how it will affect your company? Then, say that and keep them informed of any new developments.

2. Describe the differences. This immediate financial crisis is provoked by the European debt crisis but has been exacerbated by political ineptitude in Washington that resulted in a credit downgrade by S&P. Expect more market volatility, the experts say. The government is unlikely to provide much help economically, so it will be up to businesses to hew their own path to prosperity. The good news is that the corporate sector has a lot of cash on hand, unlike in 2008 when it had to borrow funds to survive.

3. Focus on the work. The best way to ensure job security is to continue to do what you are asked to do. Managers need to focus on execution. Economic recovery may be slower to come, but it is coming and businesses need to keep generating the products and services their customers demand.

There is one more piece of advice I would pass along. Imagine the conversations you employees will be having with their spouses around the dinner table. Those just starting out or with young families will be thinking about job security. Those closer to retirement will be considering their retirement security. What would you say if you were in attendance?

When times are uncertain, people look for strong leadership. Make certain with your people that they do not need to look far for it. Be there when people are counting on you.

Related: