How To Lead When Everything's Falling Apart

Last Updated Sep 16, 2011 11:18 AM EDT

Former Michigan Gov. Jennifer Granholm and I don't agree on a lot of things, politically, but I still enjoyed reading her new memoir A Governor's Story (co-written with husband Dan Mulhern, and new out from PublicAffairs this week).
When Granholm took over the helm of the state of Michigan in 2003, the car industry was enduring tough times. Everyone thought they were merely cyclical. The state budget was built on the assumption of a thriving manufacturing sector which would eventually return to health.

Over the next 8 years, however, this assumption proceeded to burn up like a Ford Pinto. Granholm would get multiple notices of mass layoffs every day, culminating in the 2009 GM and Chrysler bankruptcies. As Granholm writes, "The reality of manufacturing in America was undeniable. The jobs were gone, and they weren't coming back."

Granholm realized this fairly early in the game, but she was leading a state of constituents who often thought otherwise. "When any large economic, social, or political system has stopped being viable because the world has changed around it, the system usually retains layers upon layers of denial that insulate it as long as possible from cold reality," she writes. Taking a turn answering the phones in her office one day, she writes of a woman asking why the governor didn't just order factories to stay open. When she did focus groups asking voters about budget priorities, they were adamantly opposed to tax increases, but also couldn't identify a single program they'd be willing to cut. With state revenues in free fall, people thought you could balance the budget merely by cutting waste and fraud.

Perhaps they thought that unicorns would start building a new GM factory, too.

So how do you lead in these kinds of circumstances? A few tips I gleaned from Granholm's book:

1. Keep playing offense. Even as factories were closing left and right, Granholm kept making international trips to woo foreign investment in Michigan, particularly from smaller Asian and European companies that were trying to get a foothold in the US market. A new shop with 100 jobs may not seem like much compared with a 6000-job factory closure, but it's 100 jobs that wouldn't exist otherwise.

2. Combat denial where you can. Granholm notes that in 2005, only a third of adults in Michigan had a college degree. That is what it is, but "more disturbing, only 27 percent of parents felt that it was essential for their children to get a college education." The parents assumed that since they'd (often) done fine without college, earning $20/hour or more on the line, their kids would too, even though in the 21st century American economy, this is an increasingly ludicrous assumption. So Michigan revamped its high school curriculum to focus more on college preparation and readiness, and required students to take the ACT college entrance exam. That way, college attendance would remain an option, even if the grown-ups in a child's life didn't see it as a priority.

3. Get over the messiah complex. Our culture loves the narrative of a hero saving people from a bleak situation through sheer force of will. Granholm confesses to being a bit enamored with the idea that she could save Michigan and restore all its glory. But the reality is that in 8 years, no human being could beat back the forces of global change, create the top school system in the country, turn Detroit into paradise, etc. Better to be pragmatic and realize that some changes might not pay off until long after you've moved on -- but they still will pay off.

How have you steered your organization through tough times?

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Photo courtesy flickr user, jpowers65