Leading in Tough Times
IN 2001,Willem Roelandts was CEO of Xilinx, one of the world’s leading makers of semiconductors. The company was based in San Francisco to take advantage of the abundant talent in the area and to be close to suppliers. At the time, Xilinx had 2,650 employees and annual revenues of more than $1 billion. In 2001, the changes in the information technology industry led to a severe downturn in the market that threatened the survival of the company. Quarterly revenues plunged 50 percent in six months.
Roelandts faced a complicated challenge to keep the company from sinking. Some members of the Xilinx board pressured Roelandts to lay off staff—just as most other high-tech companies were doing throughout Silicon Valley. The CEO was concerned that laying off staff would damage the level of trust that employees had in management and the company.
Roelandts concluded that his challenge would be in keeping alive enough promise about the company’s future so that the various stakeholders—employees, customers, creditors, and suppliers—would not lose hope and abandon the company. He set out to convince people to protect the vital resources that made the company so successful.
Roelandts insisted that the human resources department work with him to help protect and preserve key resources without massive downsizing. Through a combination of actions—including taking a tiered approach to pay cuts (with the CEO taking the largest cut), providing sabbaticals, offering extended unpaid vacation leave, forgoing annual bonuses, and shutting the company down for two weeks annually—the company was able to survive. In the end, the company successfully rode out the IT downturn and turned its own fortunes around. In 2003, Xilinx ranked fourth in Fortune magazine’s top one hundred companies to work for in the United States.
What Roelandts did is called maintenance leadership. It centers on keeping an enterprise from falling apart during tough times. To achieve that objective, a manager must be able to draw on a wide range of tools and strategies.
Leadership interventions might include forcing the group to face the reality of the threat when they would prefer to be in denial; providing inspiration when the people are despondent and losing hope; reassuring people when they are having doubts; chastising the group when they violate their own cherished ideals and aspirations; and providing a strong, symbolic presence that embodies the values critical to the group’s survival.
In some maintenance situations, the leader can only draw on the slender resources of the group to help it tolerate its anxiety and pain until better times arrive. Such a situation is often difficult. No one wants to admit that only a few options are left and that the best the group can hope for is to endure a day at a time.
Therefore, the leader’s task is to help the group face the reality of its predicament. Only then can it stave off threats and try to remain healthy enough to flourish again when times are better.
At the same time that corporate leadership highlights the reality of the situation, it must also make sure that workers stay focused on the tasks before them.
One vital aspect of leadership for a maintenance challenge lies in keeping the fire of hope burning. For any group to survive, its sense of purpose and hope must be strong enough to keep people from giving up or fleeing.
Hope does not mean eternal optimism or unrealistic fantasies. The hope of leadership should be grounded in a realistic appraisal of the situation and an acknowledgment that if enough good people can be mobilized to do something about the problem, they will have a better chance to make it through the troubled times.
Hope is critical. It gives people the capacity to deal with the bleakness of their predicament. When what one is doing holds little meaning, or when the effort expended does not seem worth the little return, people will be inclined to reduce their efforts, give up, or flee. While this evocative component of real leadership is needed even when a group or organization is prospering, it is even more crucial when conditions threaten the survival of the group.
In the case of Xilinx, the CEO had to get his employees to realize that they were valued and that through shared sacrifice and committed effort they could prevail against the forces eating away at the company. He conveyed this hope through his demeanor, speech, and actions.
This role can be a heavy burden for a leader—to constantly be the one to shoulder the work of reviving people’s spirits and encouraging them to keep going. Nevertheless, the presence of someone to give people hope and shepherd them through a period of great trial is essential if the group is to survive.
In that role, the leader must manage his or her own emotions, fears, and needs, and cultivate a capacity to hold steady and not collapse under the load. He or she should have a strong and profound sense of purpose—so much so that helping others is consistent with, and even rejuvenates, that sense of purpose.
In maintaining the mission and core values of the organization or community, and the well-being of the group during dire times, little things can make a big difference. For example, Roelandts found there was enormous benefit in the little acts of leadership. He discovered that simply allowing people to come together and talk about their predicament was a useful mechanism for helping people deal with their anxiety and keep the company from falling apart.
He and his senior management team joined in the conversations, talking forthrightly about the realities of the marketplace, the threats to the organization, the financial condition of the company, and the nature of the sacrifices that needed to be made by management and staff alike. The process served to reenergize people and give them the confidence to remain focused on the work of maintaining quality in all functions of the company’s operations and performance.
A group or company need not wait until things go bad to orient its work force to be attuned to the values of the company. In fact, if it does not do so until a crisis arises, the attempt will be far less likely to succeed. Thus, every company should inculcate good habits in its top management in terms of how it treats employees so that they feel a bond with the company and believe in its core values.
Identifying the Problem
Usually when a group or organization faces a maintenance challenge, something threatens the survival of the group or organization. It could be a policy, pattern of behavior, or environmental condition, from within or without, that imperils the integrity of the system.
The cause of the company’s situation might be an economic downturn in its sector, as happened with Xilinx; it might be fast-changing technology that begins to make the company’s products obsolete; or it might be other forces beyond the company’s control. These forces endanger the value and worth that have been generated by the group. The leader’s task is to identify the force and protect the group, as much as possible, from assault.
Bold, moral, and strategic leadership is needed to ensure that the company survives such challenges.
Dark Forces Within
Sometimes a faction within a group or organization becomes a destructive force and thwarts the advancement of the people as they seek to enact their mission. This faction persists in pursuing a false set of tasks that have nothing to do with progress.
I once did some consulting work for an exceptional leader who was the superintendent of education of a large urban district in a southern state. The destructive force that was impeding progress in the school district was none other than the district school board—an elected body of ten people—who were preoccupied with petty politics, grandstanding, giving school contracts to friends and family members, and trying to control the superintendent for their own particular—and often selfish—purposes.
This was a low-performing school district. The students were mostly poor African-American and Hispanic children, many from single-parent homes. They needed all the support that they could get.
The superintendent spent more than 80 percent of her time attending to these political factions and keeping the board from further damaging the school system. Eventually she concluded that the powers of the board would have to be restricted. They had become too destructive.
She mobilized the business community, state and local legislators, and key citizens of the city to get the government to change the law relating to the duties and responsibilities of this school board. It was a long, painful process riddled with attack and counterattack, played out in public meetings and in the press.
The law was eventually passed, and the powers of the board were significantly diminished, thus allowing the superintendent to get on with reforming the ailing school district. She succeeded in mobilizing a consensus in the community to reduce the potency of the destructive force, which her four predecessors had tried to do but could not.
Even in good times, maintenance tasks must be attended to with focus and dedication. A leader must be conscientious in maintaining the integrity of the mission, the core values of the enterprise, and essential practices that allow a group to deliver on its purpose.
It is not enough to create a vision and expect people to follow. Leaders must intervene, even in small ways, to remind people of what is important. In dire circumstances, when the group is under serious threat, this work is critical.
Dean Williams is on the faculty of Harvard University’s Kennedy School of Government.
This article is excerpted from his book Real Leadership published by Berrett-Kohler Publishers in San Francisco. To purchase the book, call 800/929-2929 or visitwww.bkconnection.com.