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Guest blog: Corporate turnaround specialist Anthony Holmes - A little turbulence is good for you

Cover of Managing Through Turbulent Times by Anthony Holmes A little turbulence is good for you.

Turbulence, instability, chaos, disorder and turmoil provoke anxiety, indecision, risk aversion, aggression and disagreement. These are defensive responses to potential danger. They are the observable elements of the process through which we decide to run away or fight.

The psychological impact of turmoil in the workplace is no different. If you work in finance, negative effects may even be magnified as the consequences of turbulence are often denied and disregarded until they are revealed in adverse financial performance; attention turns to financial professionals to restore stability.

But some turmoil might be worthwhile, especially if it promotes beneficial change that otherwise would be avoided, increases people?s alertness, hones their reflexes and generally improves capability. Too much, on the other hand, can be more debilitating than motivating.

Psychologists recognise three ways in which people cope with stressful situations;

1. Problem-focused

Through analysis, people try to seek out the cause of the problem and attempt to remove or rectify it. If the cause remains obscure or if remedial action is beyond their competency, the more enlightened will recruit new expertise.

2. Appraisal-focused

People modify the way in which they think about the threat. This tends to begin with denial and, when the adverse reputational consequences become apparent, they avoid blame by distancing themselves. More realistically, this should be called avoidance-focused!

3. Emotion-focused

People allow their emotional reaction to the problem to dictate their behaviour. They can become intolerant, impatience, aggressive or indecisive, arbitrary, paranoid.

These are not traits that people deploy only when a threat emerges. Each of us regularly employs all of these responses in some combination but the balance changes as a problem develops.

In corporate life there is a further dimension that enriches our understanding. In times of expansion people manage rewards whereas in a difficult atmosphere they focus on lowering exposure to higher risk. Crudely, maximisation of profit becomes avoidance of loss.

A period of turbulence is accompanied by a veil of uncertainty that descends between the short and the medium term. This disables many of the conventional processes in the managerial toolkit that rely on the expectation of a stable or predictable future.

Perhaps the only predictable feature of any period of turbulence is that it is unsustainable and will end. The storm will pass. Who will endure and in what condition are the key considerations.

The natural tendency of managers is to adopt a coping strategy and rely on surviving in good financial health long enough for the turmoil to dissipate.

Faced with uncertainty, people tend to retreat into the short term where predictability is higher. Protection of their personal interests and those of dependents are paramount. Banks, for example, focus on their survival and if doing so necessitates the demise of your business, then so be it.

So, to manage through turbulent times you must build resilience ? a dynamic process in which individuals increase ?adaptive behaviour? to minimise their response time to unforeseen adverse events.

Too often, we conclude that problems imply that we can?t have practised managerial rituals satisfactorily and that salvation lies in their more intensive application. More data, deeper analysis, greater control, reduce costs and cancel advertising.

Get back to basics and let convention dominate because no one can criticise you for being orthodox. But conventional behaviour will not calm the gods of turbulence! This is logical, understandable, hard-wired behaviour but it?s the wrong approach.

Novelty and flexibility are vital. Novelty because turbulent times are disorderly and because the conventional managerial toolkit functions effectively only in conditions of comparative stability.

Flexibility because the uncertainty of outcome means unproductive plans must be abandoned without remorse in favour of an alternative.

Always have a plan B.

A volatile environment may increase your business risk but it also conditions stakeholders to recognise that this is a climate of elevated uncertainty. You can make use of this and rather than trying to reduce risk, embrace rather more of it.

Embrace the counter-intuitive. Deliberately explore the opposite course. Double marketing spend, increase prices, invest in new assets, take on new debt, liquidate the business now and begin again in a small way.

Rather than adopting a grand strategy that cascades through the organisation, visualise the operation as a guerrilla campaign.

Guerrilla fighters teach us much about operating in turbulent times. They operate in small groups, they are motivated, focused, flexible and adaptive and they utilise whatever resources they can find. Rather than engage their adversary in a direct confrontation they are satisfied with several small victories that gradually erode their opponent?s will to fight and often achieve negotiated concessions that would have been inconceivable at the outset.

Coming through the window when others enter through the door may be achievable only by someone new. The preservation of management is not the goal. The objective is clear and simple. Survival, ideally as a healthy enterprise. How you get there doesn?t matter. Prosperity and predictability comes late.

Anthony Holmes is a corporate turnaround specialist and transitional leadership expert. His book Managing Through Turbulent Times (published by Harriman House) identifies significant differences between leadership and management and explores leadership in crisis. http://anthonyholmes.org/default.aspx/
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