The last few months have forced governments across the globe to take unprecedented actions, confined billions of people to the constraints of their homes, separated families and friends, and may prove to be the start, if the International Monetary Fund is to be believed, of economic contractions unseen since the Great Depression. The impact on people's lives may indeed far outweigh the Great Recession of 2008.

The aftermath of the Great Recession twelve years ago saw many companies go out of business with huge numbers of people losing their jobs. It was the beginning of unheard of interventions by governments and central banks. Quantitative easing, the attempt to counteract the detrimental effects through increased monetary stimulus by central banks, is still being felt today in the form of, for instance, low interest rates.

First and foremost, however, the crisis at the end of the first decade of the 21st century, was, just as the current crisis, a human tragedy. As aforementioned, organizations shut down, employees feared for their jobs and managers were forced to reconsider their leadership approach. How do you lead your team through a major crisis? How can I keep my employees motivated and performance at a high? For leaders from across the globe, this became a pressing question.

Companies were laying off staff, colleagues sometimes didn't even get the chance to say their Good Byes, millions were worried about being next in line. Most people would probably consider the Great Recession the epitome of crises. Levels of employee stress and the strain on both economy and people stretched to the max. It was for good reason that it was named after the Great Depression. Then came Covid-19, the coronavirus that would take the world hostage, leading to governments shutting down their countries, their economies. We have only just witnessed the beginning of potentially the next depression. The IMF has predicted an economic downturn only equal to the Great Depression, the mother of all crises in the last one hundred years. Whether the global economic contraction will indeed be as profound as during the Great Depression remains to be seen - hopefully it won't - but one thing is certain, leaders from across the board need to adapt to the current situation.

Leadership in crisis

In 2013 I wrote a number of articles based on data from over 1,000 leaders in the banking, consulting, and multimedia sector. The articles explained the manner in which leaders ought to adapt their leadership style during a crisis. Keeping motivation and performance high in their teams demanded changes in their leadership behaviors.

One important point upfront: leading employees during a crisis deviates substantially from what generally makes successful leaders in stable times.

In order to better understand the reasons for why leaders need to change their behaviors and interactions with their employees, let's first look at what constitutes a crisis. Crises are periods and incidents that often arise without much prior warning leaving little time to react. Most crises create situations in which organizations are suddenly faced with great uncertainty and great risks to their business and even their survival. Crises put enormous pressure on leaders and employees alike. The pure nature of a crisis requires swift decision-making under immense time pressure. The strain a crisis puts on leaders and employees will frequently stretch a company's resources to their limits and beyond. 

Which brings us to the particular role of leaders. During a crisis, leaders embody much more than their core leadership function. They are looked toward for explanations, tangible actions, hope, solutions, and stability. Leaders are the stable rock employees can trust in, the safe haven providing a sense of stability and safety. Decades of research have shown that the perception of leaders changes with the context. A team leader, for instance, who is very hands-off during calm times of prosperity may be considered lacking the necessary strength to carry his team through a crisis. Conversely, a leader that is seen as ruthless may suddenly be seen as the right person to steer the organization through a troubling period. 

How to lead employees during the crisis – evidence from the Great Recession

 Crisis leadership requires rethinking on the part of leaders. Employees facing high levels of pressure including fear of job loss and uncertainty from potential organizational restructuring tend to respond to leadership behaviors differently than they would in normal times.

The rise of many strongman leaders in the political sphere is observable across the globe. Is becoming a strongman, or strongwoman, the answer to the question of how to lead employees during the current crisis?

What we know from the last major crisis over a decade ago: the reality is far from it. Leaders in business are advised to refrain from engaging in authoritarian behaviors. Thus, this insight is nothing to shout about.

Interestingly, however, leadership behaviors that are effective in times of stability are also limited in their effectiveness when the world is in crisis mode and organizations, their management and employees, shareholders and other stakeholders face unprecedented uncertainty.

Performance targets, for instance, no longer hold the same magnitude as a leadership tool as during times of stability and prosperity. Even delegating tasks and responsibilities to employees, certainly something advisable for leaders to do under normal circumstances, loses its appeal and affects employees differently in a crisis. Or take the importance of enthusiasm for a project that leaders are generally well served to convey to those around them. During a crisis as grave as the current one, leader's enthusiasm for a project holds little importance for employees whose thoughts are preoccupied with job security. It is other leadership behaviors that prove more beneficial when faced with a crisis.

Rewarding employees for their contribution

 We all know of the importance to reward employees for their hard work and valuable contribution to the organization's success. Does this hold true in the current environment? It does.

The reasons for the positive effect of providing employees with performance rewards are manifold. For one, rewards, from a purely monetary vantage point, impart a sense of much needed financial security. Particularly during crises such as the current one, employees across the globe and across sectors, uncertain about their professional future, welcome any reward to bolster their financial cushion to counteract potential financial knock-backs or monetary shortages.

Aside from the added financial security that concerned employees may experience, rewards also serve as a form of feedback. A phenomenon that is not exclusive to crises, but indeed more pronounced. This holds particularly true when confronted with uncertainty of the current magnitude.

Providing employees with performance feedback 

 Regular feedback is a vital element in a leader's toolbox. Regular feedback provides an employee with essential information on their performance. The feedback acts as a benchmark, a stimulus to increase their work contribution where necessary. During a crisis this carries additional value. High performance may shield the individual employee from layoff. Rewards serve a similar function. When viewed within the context of performance feedback, employees are reassured that their contribution is valuable and acknowledged. In turn, this reduces the perceived risk of being made redundant.

During the Great Recession it was leaders who utilized rewards and feedback who benefited from highly motivated teams. Their reassurance of their employees' worth resulted in not only highly motivated employees, but also in team members' self-efficacy.  In other words their belief that they possess the right competencies to significantly contribute to the success of team and organization.

Emotional intelligence - the importance of listening and understanding your employees during a crisis

 The importance of emotional intelligence in leadership is nothing groundbreaking. Its vital role in leading your team through a crisis should therefore not come as a surprise.  
But why is emotional intelligence ever so pivotal for the motivation and performance of employees during tumultuous times? 

At any time, understanding one's employees, their needs, listening to their concerns, and showing genuine interest in them as individuals, both on a personal and professional level, is quintessential to successful leadership. During a crisis the need for emotional intelligence is even more profound.

Employees face great uncertainty, some, such as younger employees, may have never experienced a crisis of great magnitude. The unpredictability as to when the situation will improve, what the next weeks, months, and years may bring may prove difficult to bear for a large part of the workforce. Emotional intelligence plays a special role in positively influencing the motivation and performance of employees. They seek a safe haven, someone able to turn to, someone who understands their concerns and who realizes that a temporary performance drop during a crisis is just that, temporary and frequently crisis-induced. Only with emotionally intelligent leaders will these employees find productive ways to tackle the impact of the crisis.

In essence: An employee who is worried about the survival of the organization and his or her livelihood needs a team leader who is willing to listen to concerns and demonstrate an understanding for their professional and personal needs. Only then will leaders be able to maintain motivation and engagement in their teams and organizations.

The role of teams during the coronavirus crisis

 This leads us to a related issue: teams. The amount of time we spend with our colleagues often exceeds the time we spend with our families. The role a good team atmosphere, ideally a tight-knit team, plays for employee motivation and performance during this crisis is paramount.

When the entire world around us starts collapsing and the daily news discusses one terrible scenario after another, a solid team unit is essential to keep spirits high and employees engaged. Not only does the individual profit from a supportive and reliable team, employees who feel part of a true team will do their utmost to work for the benefit of the team. Who would you rather go the extra mile for, a team that you feel close to or a team that is merely a group of other individuals working for the same organization? Employees working in a tight-knit team will go above and beyond to make sure that their team gets through the crisis unscathed.

During the Great Recession over a decade ago, team leaders who instilled a strong sense of team-spirit, emphasized close collaboration and relationships within the team saw a substantial uptick in employee motivation and performance. The one magic ingredient was that successful leaders in the last crisis emphasized relationships that went beyond a purely professional nature.

One can think of the psychodynamics as such: As much as the team is the backbone, the support for the individual during the crisis, each individual contributes to the strength of said backbone.

Convey a vision to motivate during the crisis

 With so many unknowns, everyone yearns for some good news, an end to the crisis, something to look forward to. It is one of the magic ingredients that turns regular managers into charismatic leaders, a vision.

During the Great Recession team leaders with an appealing, clearly communicated vision experienced a significant increase in employee motivation.

The reasons are twofold: Firstly, a vision that appears worth working for is motivating in itself. The vision serves as a goal, the light at the end of the tunnel worth pursuing. Secondly, an appealing vision serves as a distraction from the current gloomy reality. Picturing a positive, appealing future gives employees a break, enables them to focus on positives in lieu of a threatening present. The now no longer appears as gloomy as a better future awaits. A future that people have control over, a vision that can be achieved through each and everyone's efforts.

The latter is essential. The vision not only needs to appeal, it must be realistic, achievable. A vision can only motivate and improve employee morale when its appealing and achievable. It was those leaders in the last crisis that enjoyed a motivated workforce, that reported high levels of team performance where others reported substantial drops.

Give them control and power

 The most successful leaders in the Great Recession added a sixth element to their toolbox, empowering their employees. As much as a realistic vision conveys the sense to be back in the driving seat and in control over one's destiny, sharing power, delegating tasks, and giving autonomy in achieving objectives had a strong positive influence on employee motivation during the last major crisis slightly over a decade ago.

Why would employees be more motivated when they feel that they are in control, that they have the power over how to accomplish their work? It was mainly about regaining a bit of control that was, to a great extent, taken from them at the onset of the crisis. The events unfolding around them were out of their control. Being in control at work and being in charge over the successful completion of tasks and objectives instilled a sense of recouping at least some of the lost control.

Of course, empowering employees is important in normal times, but add a major loss of control due to unforeseen, uncontrollable factors, and the effect on their motivation multiplies tremendously.

Don't control, don't be overly enthusiastic

 Two leadership techniques that fell short of positively influencing employees during the Great Recession were strict performance guidelines and being overly enthusiastic.

Let's look at the former first. Strict performance guidelines and standards are crucial elements in successfully leading a team in normal times. They make tracking the contribution of each team member possible, allow team members to hold lagging members accountable, and are essential in effectively rewarding employee performance. During a major crisis rewards, as aforementioned, serve an added role, safety. Performance standards will frequently be broken during an episode as severe as the current coronavirus crisis. The overall business is unpredictable and things may change on a daily basis.

Take, for instance, the quick response around the globe regarding teleworking. An HR practice that was previously considered a perk has suddenly become the norm. Existing performance guidelines can no longer serve as the only measure of employee performance. Many standards have suddenly become redundant as they are no longer fit for the current work environment. Insisting on performance guidelines and standards did not serve leaders well during the Great Recession and are even less likely to do so in the current atmosphere.

From rational guidelines to leadership enthusiasm. Leaders in regular times have always been well served to show great enthusiasm for a project. During the last major crisis over a decade ago, this did not prove the case.

Overly enthusiastic leaders failed to instill greater levels of motivation among their employees. The reason is simple: employees who are worried about keeping their jobs are preoccupied with doing everything in their power to do just that – work, don't take too many risks, perform, and stick to the script to keep your job. Their cognitive resources are already exhausted in attempting to meet all these goals. Enthusiasm equals an uptick in mental energy. For one to become enthusiastic, one has to have energy available to get enthusiastic about an idea. Leaders who were greatly enthusiastic about a project were met by employees already exhausted by the many demands posed by the crisis. They had little energy left to enthuse over a new project or even their work. The daily agenda had become: survival.

Be a trusted leader in a crisis

 The most powerful leadership asset during the Great Recession? Trust. Leaders who enjoyed high levels of trust succeeded in significantly increasing their team's motivation. Not only were employees more motivated when working with a leader who they trusted, they also regarded themselves as more capable. Leaders who were trusted by their team benefited from employees who considered themselves more able to perform at a high level. They perceived their skills set as more elevated than employees working with leaders that they did not trust. 

The reasons were manifold: firstly, rewards and feedback delivered by trusted leaders were viewed as a true reflection of their abilities, not a potential attempt to merely influence employees into working harder. Rewards and feedback carried a much stronger psychological weight.

Or take emotional intelligence. Trusted leaders who showed interest in their employees were genuinely believed to be caring and truly, well, interested in their employees. In turn, employees were more willing to open up and share their concerns and ideas with a leader they trusted. When these were taken on board by the leader, it frequently resulted in even stronger performance and motivation leading to an upward spiral of leader-employee interaction and performance.

Trust is obviously established over an extended period and hoping to build trust in only a few days will yield very little in terms of increased motivation and performance. However, even if strong trust is currently not present, leaders are well advised to work on their relationships with their team members to develop trust. Not only will it serve them well in the current crisis but also when the dust has settled.

Leadership in crisis differs from leadership in times of certainty and stability. Understanding these differences enables leaders to remain as effective in this current crisis induced by the coronavirus as they were when things were more upbeat.