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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Don't forget hope

In good times or bad, a leader must always emphasize communication and transparency when dealing with employees. And make no mistake, these are still tough times, despite the occasional indicator of economic growth. Many people are still worried about their jobs. They see friends, family members, and neighbors out of work, and they worry that the axe will fall on them next. So it's that much more critical for an organization leader to talk to his people in a sensitive and forthright manner.

If there have been staff reductions, the leader must explain the conditions that led to the cutbacks. This includes being as open as possible about the organization's financial condition. The somber part of the message also must be tempered with some hope. Explain to the staff that they will reap rewards - in raises or reduced workloads - when the economy improves and new people can be hired. It's important that this information is spread throughout the office, from the top managers to the supervisors to the staff. People need to feel that the corner will be turned and that conditions won't always be so difficult.

How will the turnaround be achieved? That's another important topic that a leader must address in this type of situation. He must indicate how the organization expects to return to profitability, how it plans to compete with its rivals, how it will survive and thrive in the years ahead.

I can't leave this issue without mentioning a pet peeve of mine: executive compensation in tough times. Executives have to realize that large bonuses for themselves are inappropriate when their companies are faltering. The New York Times just reported on executive compensation at some 200 public companies, and it found that compensation grew for many executives even as shareholder value declined. That's not right. If a CEO is getting a fat bonus when the company is in trouble, then that means the employees will be hurting. This hardly fits the definition of first-rate leadership.

By Yash Gupta

 |  January 5, 2010; 9:06 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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