Berkshire Hathaway Inc. Chairman and CEO Warren Buffett once said: “Only when the tide goes out do you discover who’s been swimming naked.” Today’s housing market is about to become a living, breathing example of that — our tide is going out and we’re going to find out exactly who looks ready to swim.
In a Harvard Business Review article by contributor Kelsey Miller, the author cites research that found 53% of leaders become “more closed-minded and controlling” during high-pressure situations, and 43% of leaders become “angry and heated.”
Reacting to a challenging situation with anger or indignation will never solve the problem. Instead, the more complex the conflict, the more necessary it is to face the situation with calm, rational and intentional thinking.
And while there may be negative connotations to a softening market, it’s not a bad thing. It simply means those who are ready, focused, committed and willing to do whatever it takes (the hard and not the easy) will prevail. Those who don’t, won’t.
If you’re wondering what that commitment, focus and determination looks like in tangible terms, here are a few ways to prepare for a downturn in the marketplace:
Have a plan.
Having a great plan is the backbone of resiliency and effectiveness for any leader navigating through more challenging times.
Remember, the playbook you used in easier circumstances may not apply in a downward-turning market. McKinsey & Company analyzed the performance of about 1,000 large, publicly traded companies through the 2008 financial crisis and found there was a small group of companies that outperformed similar companies in their industry.
By 2009, those companies’ earnings went up about 10%, while the other companies saw earnings fall by almost 15%. The difference, McKinsey found, was that the more resilient companies had effective operational action plans in place, then executed with excellence on those plans.
Educate your team.
When you educate your team, you develop future leaders from within your organization who can help strengthen the company and provide guidance to their departments. More education leads to higher efficiency in all levels of the organization. Studies continually show when managers are better educated, their teams are more engaged; and highly engaged teams positively correlate to increased motivation and productivity.
Grow and hone your skills.
As we say, arrogance is the precursor to disaster. Once you think you know it all, your slide to mediocrity has already begun. In a downward-moving market, there is simply no room for mediocrity. Anything short of excellence won’t cut it. Become a perpetual student of your industry and expand your skill set. Read more. Listen to more podcasts. Attend more conferences, whether virtual or in-person. Enhancing your skills will help unlock any challenges presented by a more difficult market.
And the skills you grow shouldn’t just be task-oriented; you should also hone your skill set to expand your emotional intelligence. This will allow you to create deeper connections with your team, express ideas clearly and display rational thinking, especially under pressure.
Develop good habits.
Having good habits is the best way to execute on what you know. By creating great daily habits, you can ensure you’re capturing your share (or more than your share) of the market. Remember habits guru and “Atomic Habits” author James Clear’s tip for developing habits: stack them. If you already have an existing habit that is positive, stack another one on top. You’re more likely to stick to a habit if it’s attached to one already existing in your routine.
For instance, if your habit is to go for a run every morning, you can stack that habit with drinking 16 oz. of water after your run is completed. Habits shouldn’t just be developed for your morning routine, though a solid morning routine will set you up for success throughout the day.
Your daily habits should focus on sticking to the Wildly Important Goals you have for your business. Remember Clear’s message: “You do not rise to the level of your goals. You fall to the level of your systems.”
Lean on your support system and mentors.
The strongest leaders know they cannot lead alone. John F. Kennedy relied on his brother, Robert Kennedy, for advice and guidance. Steve Jobs had a Silicon Valley mentor in Bill Campbell. Walgreens CEO Roz Brewer — the highest paid female CEO, according to a 2021 report — said this to the Atlanta Business Chronicle about how a board of directors at a college should function to help leadership, and the sentiment is universally applicable: “They need a confidant, they need guidance and help and support to pull off a pretty big job.”
Be like Bill Campbell. One of Steve Jobs’ most trusted advisors, Bill Campbell, was known around Silicon Valley circles as “the coach.” He coached CEOs like Larry Page, Sergey Brin, Sundar Pichai and Jobs, and was the head coach of Columbia’s football team from 1974 – 1979. At one point in his renowned career, Campbell was brought on to help senior leadership at struggling tech company, Go.
When Go CFO Randy Komisar was asked by Harvard Business Review author Robert I. Sutton what made Campbell so special, able to guide the leaders during a particularly hard time yet still allow everyone to feel invested in the success of the organization, Komisar said: “Campbell’s door was always open for one-on-one meetings with every team member of the company, regardless of their title; he singled out people during company presentations to compliment them on a job well done; he knew how much his attention meant to the team and held people accountable based on this idea — if someone met their commitments, they received more attention from Campbell; and he was highly visible at all levels of the organization.Resist being casual about anything. Casualness creates casualties.”
Even the smallest task should not be taken with a casual attitude. As Yoda said: “Do or do not. There is no try.” As Ralph Waldo Emerson once said, “Do the thing, have the power.”
So, what’s the message? A downward-turning market is not a hindrance but a welcomed challenge, and “challenge” is defined in the Oxford Dictionary as ”a call to take part in a contest or competition.” Leaders, this is your call to take part, this is your chance to show the world what you’ve got. When you do, you’ll lead — and succeed — through anything.
