Leadership challenges during a downturn

At present, a threat that looms large over the world economy – the current coronavirus outbreak (Covid-19), which may end up being the world’s most significant disruptive pandemic of the era of globalization.

Why flexible leadership overrides experience in dynamic times

Leadership faces several challenges, particularly during an economic downturn. A simplistic statement but one that represents reality better than anything.

In recent years, the world’s economic and political structures have been through a lot — from financial crisis to income inequality, demographic pressures, digital technology disruption, geographical shifts in production and geopolitical shifts with unpredictable ripple effects.

At present, a threat that looms large over the world economy – the current coronavirus outbreak (COVID-19), which may end up being the world’s most significant disruptive pandemic of the era of globalization. This is no empty threat because, in a glocal world, turmoil in one region spreads speedily to other parts of the world within days, much like a wildfire. 

Daunting Scenarios and Traits

Wildfires across various geographies have been devastating the ecology and local economies, as has happened in Australia, where entire species are being pushed into extinction.

The worst part about the above events is their unpredictability. Barely months ago, who could have predicted stock-markets in India would tank because Covid-19 was spreading across the globe. 

These scenarios comprise more than a handful of challenges for organisational leaders. That’s not the end of the story since the swift emergence of AI and bots has transformed the workplace. In many cases, humans and machines are embedded in the overall workflow. Moreover, the Internet of Things has ensured work is connected, transparent and diverse as well as done anywhere, anytime, creating a fluid work culture. 

“Everything has its pros and cons, though. While full-time employment was once the norm, an alternate workforce ethos has now emerged – wherein gig, crowdsourcing, contract, and part-time work are all gaining popularity.”

Consequently, jobs are giving way to ‘super jobs’. These comprise a combination of technical skills as well as soft skills such as communication, collaboration, and innovation. In such jobs, the roles offer wider possibilities, higher productivity, and more meaningful work experience. But this entails moving from stable, traditional jobs to roles relying solely on cognitive skills such as empathy, creativity, and inspiration, among others. 

Paradoxically, in the epoch of young CEOs, an employee’s long years of experience can be more of a liability than an asset. Young Turks come with go-getter mindsets so imperative in the digital era while experienced employees may be more hesitant and risk-averse in their approach to handling any task or crisis. In the age of micro-chips, speed is indispensable in winning market share and mindshare. 

Leadership must possess a young-at-heart mindset to tackle the disruptions. According to Grant Thornton’s International Business Report (2019), the top three disruptors between 2020 and 2030 would be – a digitally-connected world; AI and big data; automation and robotics. Against this backdrop, three essential attributes for business leaders would be – being innovative, adaptive to change and collaborative across businesses. 

A Deloitte Global Human Capital Trends survey (2019) revealed most respondents (81%) believed the ability to lead through complexity and ambiguity was most important. The other qualities for 21st-century leaders were the ability to lead via influence (65%); ability to manage on a remote basis (50%); ability to manage a workforce comprising humans and machines (47%); and ability to lead more quickly (44%). 

Top Temperament

Considering the complexities of the digital age work environment, what’s required is leaders who can strike the delicate balance between when to slow down and when to speed up the pace of business. In other words, taking deliberate strategic pauses rather than stepping on the accelerator at all times could be the key differentiators when reacting to unpredictable disruptions. 

As customer demographics are changing, leaders must re-examine markets and market strategies, especially against the strong economic headwinds. leaders should embrace products and services that are innovatively rather than conventional. Additionally, in the hyper transparent digital era, leaders and their actions are always under the scanner – not only by governments but the general public too. Accordingly, leaders need to manage external audiences as well as internal stakeholders. 

Since all choices made during a downturn will impact engagement and performance during recovery, leaders need to balance short-term and long-term actions. In other words, temporary cost-control measures must be thoroughly thought through vis-à-vis the long-term impact, e.g. of layoffs on employee morale and the company’s brand image. In such situations, instead of downsizing the workforce, it may be more advisable to trim/suspend an annual hike as a stopgap measure. 

Additionally, in super adaptive markets, it is sensible to switch from a competitive to collaborative mode with peers or rivals. The telecom industry is a classic example where two top telcos collaborated to keep operations going to withstand the disruptive deep pockets of a new entrant. Collaboration can also open up new avenues of growth that may not have been apparent in a competitive mode. 

Finally, a know-it-all attitude or one-size-fits-all approach won’t work for any leader. Even top leadership must remain receptive to new norms and embrace change. To elaborate, generation X leaders may not be digitally savvy while millennial staff adopts technology like ducks taking to the water. In such cases, reverse mentoring by young managers can play a pivotal role in bringing the senior leadership up to speed on digital tools and techniques. 

In this manner, leadership can be instrumental in building an organisation where structures are incidental and ever-evolving while responding quickly to any change. These leaders will be able to establish strong bonds with customers and other stakeholders going well beyond the product or brand requirements. Simultaneously, such leaders should be empathetic to employees’ diverse needs, developing strong support mechanisms that cater to their mental well-being too. 

In a nutshell, in the future where uncertainly is the norm, flexibility, humility and an anti-fragile mindset will be the hallmark of successful leaders. 

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Shikha Gupta, Director- Talent Management and D&I, Schneider-Electric. She has almost two decades of experience in human resources and previously has held HR leadership positions in organizations like JP Morgan Chase, Wipro, etc. covering the entire gamut of HR ranging from Talent Acquisition and Management, Rewards Management and HR Business Advisory. She is especially passionate about enhancing Diversity in the corporate and has been an active advocate of work-life balance and empowering employees to become key participants in the organization's growth story. Shikha holds a Bachelor of Engineering degree with a specialization in electrical engineering and an MBA in Personnel Management and Industrial relations


  1. A great article during at a time of global crisis. These are testing times to identify genuine leaders from those who are perceived to be so called leaders.


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