Not so long ago, announcing redundancies was seen as an admission of weakness and management clearly didn’t have control of their business. Today, if you’re not restructuring you are regarded as out of step with reality. After all, we are facing economic Armageddon – aren’t we?

Apparently not, if the likes of Theo Paphitis and several other ‘self made’ business leaders are to be believed, this is the land of opportunity. It’s survival of the fittest and if you’re fit enough then you’re set to gain ground and grow your business.

Confusing messages to say the least. So, what should we be expecting of those who lead within our organisations? Let’s start with lower tier managers, a group that may well be finding themselves in unchartered territory. Luke Johnson the man who took Pizza Express from 40p to 800p per share and now chairs Channel 4 wrote recently in the Financial Times:
“It is becoming apparent that many leaders were really just suited to the good times. During a severe recession, when growth is irrelevant and all that matters is survival, their bullish attitude and denial of reality becomes positively dangerous.”

Many of our younger managers weren’t in leadership roles during the early nineties when the last recession took hold; in fact many weren’t even in the workplace. They find themselves in that emotionally-draining position of having to look colleagues in the eye and tell them that their role is becoming redundant. The anxiety of this alone could very well impair their ability to lead a team, not to mention the fact that they are very much a part of the credit consuming generation, possibly living with the very real fear of repossession at home. It would be naïve to assume they are all making good decisions.

However, the outlook isn’t completely bleak for this group. Costs are inevitably cut and an altogether more cautious approach is required, with many organisations looking for talent internally. After all, the risks of a bad hire are considerably less with an internal candidate, not to mention significantly cheaper than external recruitment. Add to this, as Johnson eludes to above, this climate does sort the ‘wheat from the chaff’; it shouldn’t be too great a task to identify the next generation of senior leaders.

Even at the most senior levels, the years of growth have meant that strategy has been driven largely by market growth. Decisions to grow businesses have carried great kudos; the popular leader is the one who starts new projects, shares new opportunities. Not the one that shuts production lines and discontinues products. For those that find themselves in rising markets, now is the time when leaders have to earn their above average salary more than ever. They have to make tough choices, often unpopular ones, swiftly and repeatedly.

There’s no doubt that the sheep-like mentality towards sub-primes contributed to this slow down, however true leadership isn’t about following the pack or gaining popularity; it’s about following convictions and clearly charting the way ahead.

This isn’t just uncomfortable for the troops, it’s equally troublesome for those who govern. Board members cannot become entangled in executive responsibilities, they must place great trust in their management team to find the funding, make the cuts and ultimately drive the business forward with a clear vision. This of course isn’t easy and we are all a bit more cautious and a little less trusting now, but control freaks rarely prosper.

Success will come to those who trust. Trust earns trust and in this new world where according to recent research trust in business leaders has dropped to 17%, smart businesses need to become open and honest with both their consumers and their staff, in fact I’d argue you can’t have one without the other. This means being open about the bad news alongside the good, admitting when we’ve messed up and demonstrating our integrity by going out of our way to right the wrongs. I doubt many larger businesses will be able to grasp this they are simply too cumbersome to make what is effectively a cultural shift, that said it never ceases to amaze me how an organisation’s culture mirrors its leader’s values and personality.

Time will tell which leaders are in fact able to lead their team through this crisis. I’m putting my money with those that have made the tough decisions, aren’t afraid of becoming unpopular and are casting a clear vision for the future. Your challenge is to find out who they are within your organisation.

Fresh Tracks are leading experts in corporate team development and have worked with some of Europe’s most recognised and reputable organisations.