STRESS MANAGEMENT AND LEADERSHIP

Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership.

More companies die because of the rigidity of their leaders than any other single cause. —PETER DRUCKER

 According to an article in Forbes by Dina Gerdeman, she points out that less than 0.1 percent of firms in the United States make it to the age of 40 years. Amazingly, only 10 percent of firms founded in 1976 were still operating in 1986.

In addition, we are all well aware of those large, longstanding, seemingly infallible companies that collapsed: Polaroid (started in 1937), RCA (which was twice the size of IBM in 1955), Blockbuster, RadioShack, Borders, and many others. The lack of agility of the leaders in these organizations, perhaps combined with poor planning and execution of strategies for changing markets, led to their downfall. Gerdeman cites the work of Harvard Business professor Michael Tushman and Stanford Business professor Charles O'Reilly III who concluded, “The leaders of these companies were rigid in one way or another—unable or unwilling to sense new opportunities and to reconfigure the firm's assets in ways that permitted the company to continue to survive and prosper.”

Of course, they also present examples of companies whose leaders were successfully able to make these transitions. For example, IBM started out in 1913 as a mechanical tabulating machine manufacturer and is now a $100 billion company that gets 85 percent of its revenue from software and services that didn't even exist 50 years ago. Amazon, which began as an online bookseller, is now the largest web retailer and a major player in cloud-based utility computing. In order to succeed, these authors talk about leaders needing the ability to run today's business while simultaneously working toward the future. You need different skills and an adaptable mind-set to accomplish both tasks. Also, you must define your organization in a way that allows for both exploiting existing products or services and exploring new products and services. IBM has been able to define itself in a way that transitions itself over time:

IBM's own website states, “IBM's character has been formed over nearly 100 years of doing business in the field of information-handling. Nearly all of the company's products were designed and developed to record, process, communicate, store, and retrieve information—from its first scales, tabulators and clocks to today's powerful computers and vast global networks.”

This constant state of innovation is described by IBM CEO, Ginni Rometty as, “Digital is the wires, but digital intelligence, or artificial intelligence as some people call it, is about much more than that. This next decade is about how you combine those and become a cognitive business. It's the dawn of a new era.”

In other words, she's prepared IBM for the next decade and its continued exploration. By narrowly focusing on your current activities you run the risk of future disruption. Often it's the anxiety about change that keeps us locked in our present day mentality.

I started MHS as a narrowly focused test publishing company. We began by computerizing traditional paper-and-pencil psychological tests into the newly released (at the time) Apple (II and 2e) microcomputers. We soon discovered that psychologists were not on the leading edge but rather the trailing edge of technology. If they were to adopt computers at all it was most likely for office management purposes, not for putting their patients in front of. We then created a mental health office management system (called SHRINK) that was fairly successful. However, during that process we also ended up creating a paper version of our most popular computerized psychological rating scale at the time, the Conners' Rating Scales®, the first assessment used for ADHD.

Subsequently, as technology (and the times) changed we had to move (meaning rewrite the code for) our computerized assessments from Apple DOS on to MS DOS, MS DOS Networks, Windows (and each subsequent upgrade), SDK's (software development kits, for large institutional and state-wide orders), online (web-based), APIs (Application Program Interfaces), and cloud-based operating systems and platforms.

As well, we had to redefine ourselves as an organization. Over time, we no longer thought of ourselves as simply a test publishing company, but rather as an organization that helps professionals transform people's lives. In our clinical and educational division, for example, we help psychologists, psychiatrists, and other mental health professionals more accurately assess and diagnose ADHD, autism, depression, anxiety, and other disorders in children and adults so that patients get the right treatment that helps them cope better in life.

In our public safety division, where we measure risk assessment, we help probation and correctional officers keep our streets safe and ensure that offenders get the right amount of supervision. In other words, our assessments are used to ensure that we don't fill our jails with people who don't need to be there, and that we keep the dangerous people under lock and key.

In our talent division, we help human resource professionals and organizational psychologists identify the right people for the right job and develop leadership skills in high potential employees and new leaders. Our assessments offer actionable strategies to clients, thereby enabling people to reach their potential and giving organizations the means to function better.

Not only does redefining your mission help you find more purpose in your work, it broadens your vision, and leads to greater people engagement. By redefining what you do as something purposeful and meaningful to employees, customers, partners, and the community at large, you gain many advantages. Not the least of which it helps you stay relevant, as the world around you changes. It also makes disruption of your industry more difficult. To effectively lead organizations through change requires flexible leadership.

In terms of the vision of the organization, just as Ginni Rometty sees IBM as becoming a “cognitive business,” I see MHS as being in the business of scientifically predicting human behavior. By having a broad vision we don't stay focused on narrow tasks.

If MHS, for example, stayed narrowly focused on publishing psychological tests for psychologists on the computer system of the day, we likely would have disappeared as a company long ago. In fact, back in the early 1980s, when we started MHS, there were a number of such companies in my industry—Psychometrics, Psychologistics, PsychSystems, PsychoMeter, Software Office Solutions, and many others whose names I now forget. The point, however, is that they have all disappeared. Fortunately, we were flexible enough to enable the company to expand into new areas, with just the right amount of risk taking.

Leading an organization when times are good and things are going well is not when one thinks of flexibility. However, when times get tough, or we encounter challenges, that's when the need to be flexible as a leader arises. Even when those challenges seem far off in the distance, the importance of flexibility comes into play because flexible leaders are typically skilled at sensing potential sources of disruption.

The ability to remain flexible in times of stress or crisis is a skill that leaders can develop. There has been a fair bit of research on flexibility during difficult times, much of which is summarized by Gary Yukl of the University of Albany and Rubina Mahsud of Seattle University.

They identified the following steps flexible leaders take in anticipation and management of stressful events:

1. Become aware of early warning signs of crises that can affect your organization. Do not become complacent and ignore or minimize these warning signs.
2. Quickly analyze and better understand any immediate problems or crises.
3. Be receptive and open to new information or anything you may have overlooked as you confidently direct the response of your team.
4. Respond in a way that is consistent with the core values of your organization and high standards of corporate social responsibility.
5. Plan on how to avoid serious problems and make contingency plans for those problems you can't avoid.
6. Keep everyone informed about the problem and how it is being resolved.
7. After the crisis ends carry out a review session to determine what was done well, what mistakes were made, and what lessons were learned.

Stress Tolerance and Leadership

Craig was having a hard day. He is the CEO of a medium-sized technology company and he had been experiencing a high turnover rate among his software developers. He has several projects underway, but the deadlines keep slipping away due to the staff disruptions. In one case, because of the high customer demand, they prematurely released one of their cloud-based business management products. It had been rushed through their quality assurance process without proper vetting.

Between the high number of customer complaints over errors in the financial management program and staff resignations, Craig was stressed out. He felt uneasy in his stomach each morning as he entered his office building. Just flipping through the high number of service tickets registered by his tech support department made his head spin. Craig's stress level was getting to the point that it affected his basic functioning. His decision making was becoming questionable.

Sometimes the stress of running an organization can be overwhelming. This is especially true when the organization faces problems. If a leader struggles with the problems at work when they're relatively small and manageable, it can only get worse when the difficulties start to escalate. There's likely more than one issue at play in Craig's case. The first is whether he has the ability and right competencies as a leader to work through the problems his company is facing. He may need a skilled manager that can take charge of his product development and customer support issues. He also needs an experienced human resource person to manage his personnel issues. Next, he needs to be able to manage the stress he is experiencing. It is highly unlikely that he can properly focus and come up with solutions to his problems when distracted by the effects of stress.

Craig reached a point where he had to deal with his stress. It was consuming all his time and taking over his life. He realized, with some help from a CEO peer group he belonged to, that he needed to redirect his energy. The group encouraged him to engage a senior, experienced executive coach. It was important for Craig to gain some self-awareness of his current emotional strengths and challenges. The coach administered a Leadership EQ-i 2.0 to Craig and debriefed him on his results. His low scores on Stress Tolerance, Problem Solving, and Impulse Control provided the coach with direction in how to frame the intervention.

As part of the coaching initiative Craig learned more about his strengths and weaknesses, both emotionally and management-related. He learned to be more in control of his emotions and was more comfortable handing over control of a number of business functions to senior staff. By learning how to better manage others, and giving up his command and control style, things started to improve. He brought in and empowered an HR director and project manager to take over some tasks that he wasn't managing well. These tasks were a source of pain for him.

Over the course of a year there were significant improvements in Craig's company. Turnover was down, and projects weren't being released until there was a proper quality assurance process in place. Customer satisfaction went up dramatically, and revenue and profitability improved.

Managing stress is an important part of leadership success. Being a leader of an organization used to mean putting in long hours of continuous work, taking little time to enjoy life, family, or anything else. Most successful leaders I know today have learned how to balance their lifestyle. If they are putting in too many hours at work it usually means they don't have a strong team working with him or her.

I find it's important to schedule recreational and family times in my calendar just as I schedule product development and marketing meetings. Whether it's my band practice, time to work out, an evening at the theater, or an event with my grandson, I like to see it on my calendar.

When it comes to managing stress, there are many options to choose from. However, not everyone is comfortable using every technique available and no one method works for everybody. I recommend mindfulness and meditation to a lot of people, and I find it works for many of them. But, in all honesty, it doesn't work well for me. I find that I can feel much more relaxed after an hour's practice on one of my saxophones because playing and listening to music is a great relaxer for me. Some people do well going out for a half-hour walk or working out in the gym. I worked with one executive who enjoyed putting on boxing gloves and sparring with a punching bag. There is no one size fits all. You really need to find out what works best for you. If you are unfamiliar with mindfulness, meditation, or yoga, you might want to sign up for a trial class to experience it and see if it works for you.

How Can You Better Manage Your Time?

For many leaders, I see the attempt at even trying to manage their time as stressful. Using checklists and schedules may be helpful, but to really get control over your time I find that being values based helps a lot. So rather than starting with activities—time-limited occurrences at specific points in time—I like to start with values. I have leaders rank order the most important things in their life, such as:

1. Family
2. Work
3. Fitness
4. Health
5. Social activities
6. Friends
7. Vacation
8. Tennis
9. Dance
10. Travel
11. Live theater
12. Movies
13. And so on

Once you've established the values and activities that are most important to you, you can then set goals within each one. You can also specify a frequency and amount of time you want to spend in each area:

1. Working out—3 times/week for 1 hour each time
2. Senior Team meetings—1 time/week for 1 hour (Mondays)
3. Check on product development—1 time every 2 weeks

As you go through the exercise your priorities will become much clearer. You can move from there to scheduling the ideal dates and times for you to execute each of your activities. Of course, you must build in some flexibility, but try and stick with your plan. For example, I have band practices booked weekly into my schedule and my assistant knows not to book any meetings for that time. However, things happen: I travel, we get an out-of-town author or business associate visiting us, and so on. So be prepared to adjust (flexibility) and reallocate your time.

The Half-Full Glass

Imagine Bryan, the company CEO, coming out to address 50 of his staff at a town hall meeting after having the worst financial quarter of the company's ten-year history:

Unfortunately, I'm here to deliver some bad news. As you all know it's been a tough few months. We lost out on some major bids and we lost a couple of our long-term customers to our competition. We also lost a couple of our sales reps. It's been a bad quarter. In fact, this has been the worst quarter in our entire history. I don't really know what we can do to get out of this. I was hoping to deliver better news. But I can't. We're just going to have to tighten things up. We'll have to cut back on expenses. We'll do less travel. Our sales are really down. We have to get them up somehow. I just don't know how yet. I think we all should just work harder. I don't know if we can get out of this downward spiral. I guess we'll have to try and see what happens. The future doesn't look good.

Okay, let's go out there and win!

Now if you read that again, but slower, how does it make you feel? Does it inspire you? Are you ready to go all out and win for the company? I know of one case where a similar speech led to people dusting off their resumes and starting their job search.

On the other hand, what if Bryan had delivered the following speech?

Hi everyone. I know it's been a difficult few months. We've had a tough quarter. Things didn't go quite as we expected. But you have all worked hard, and as managers, we really appreciate your efforts. We had a few rough breaks, but I'm confident that we, together, can overcome that. We've seen some tough times before. I've been meeting with the senior team, looking at ways to turn this around. Together with the senior team we've already thought of a few things that can make a difference for us. As well, we'll be putting together a cross-company team with someone representing each department, to get together and brainstorm some new ideas that we can go forward with. With everyone's help and all of us pulling together I am confident we will break out of this. We have the talent and will to have a great year. Together we're going to make it happen. Let's all work together to get there. I'm proud of you all and I know we can do great things.

So, let's go out there and win!

How do you feel after that speech? As a leader, I know that speech is more likely to get the results you need. As with most leaders, I've been in that place, where sales were down and things were tough. I've had to give a speech like that one. And, in fact, we did pull together and get out of the hole we were in and were able to rise to a much better place.

Optimism is much more than saying the glass is half full. Optimism, as we see it and measure it in emotional intelligence terms, is more about resilience. It's not just seeing the world through rose colored glasses. It's acknowledging the reality of where we are, and having a vision of where we need to get to. It's the confidence of maintaining that vision even though the going gets tough sometimes. If you lead an organization, as I have, then you know how scary it can be having responsibility for the financial welfare of other people and their families. The risks that you take can affect not just your own wellbeing, but that of dozens, or hundreds, of people and their families who are depending on the success of your organization. On the other hand, I feel great pride when I see people in our organization buying a new car, getting a new house, growing their family. One of the real joys of leading a successful company is knowing that something you created has given so much, both emotionally and materially, to the people who have contributed to it. It gives me a great sense of gratitude.

There are several studies demonstrating the importance of optimism in leadership, but one that still stands out for me, over the years is the study carried out by Dr. Marian Ruderman of the Center for Creative Leadership (CCL) in Greensboro, North Carolina. Founded in 1970, the CCL is a world-famous, nonprofit, top-rated global provider of leadership development. It's ranked by the Financial Times as one of the top five worldwide executive education programs.

Several years back, when the concept of emotional intelligence was still relatively new, I received a call from Marian telling me about their programs and about how leaders from all over the world came to their center. She pointed out that while they had many top-level, excellent leaders coming to enhance their skills, they also had some struggling leaders who, in fact, were one step away from being dismissed from their positions if they didn't shape up. This, she explained, was a great opportunity to see if emotional intelligence was important in leadership. Their group had reviewed the various measures of emotional intelligence available and had decided that the EQ-i was the best validated tool to use for this. As well, the EQ-i model of emotional intelligence would be a good fit for organizational leaders.

Of course, I jumped at the opportunity. In those days, I hadn't really thought very much about the potential impact of emotional intelligence and leadership. Here was a world-class organization willing to do an independent study on our tool, which was selected as the best among the various emotional intelligence tools starting to crop up. In the CCL study, 302 leaders and senior managers, ranging from very successful to barely struggling along, were tested for emotional intelligence with the EQ-i. They were also assessed for their on-the-job performance with Benchmarks®, a tool designed to get a clear picture of leadership performance from superiors, peers, and subordinates.

One of Dr. Ruderman's findings was that emotional intelligence, as measured by the EQ-i, accounted for roughly 28 percent of leadership performance. This finding is consistent with other studies that have used the EQ-i 2.0. The findings, comparing high-performing, average, and low-performing leaders can be seen in Figure 9.1.

Figure 9.1 EQ-i Scores of Leaders Participating in Leadership Training at the Center for Creative Leadership

Three of the areas that significantly differentiated the high performing leaders from the unsuccessful leaders were Interpersonal Relationships, Stress Tolerance, and Optimism. While poor interpersonal relationships were found to be the best predictor of leader derailment, optimism is a good predictor of leadership success. Good interpersonal relationship skills enable leaders to manage all of the people aspects of the business. The ability to manage stress enables a leader to remain grounded and confident, even when dealing with crises. A confident leader, even in difficult times, is reassuring to others on the team, and allows them to deal with what they need to do more effectively.

There have been many similar studies carried out, some published and some kept within the confines of the organization carrying out the research. They have spanned across different types of organizations, industries, and geographic locations. Consistently, the EQ-i (and EQ-i 2.0) has helped differentiate the more effective leaders from the less successful ones.

Cheryl Meredith at Capella University carried out a study of executive leaders across several nonprofit, faith-based organizations based in Colorado. The leaders of these organizations were assessed for their transformational leadership style, as well as their emotional intelligence with the EQ-i. Transformational leadership styles were, once again, highly correlated with emotional intelligence. Further analysis revealed that five components of emotional intelligence accounted for over half of the variation in transformational leadership behavior.

 The five were 

(1) optimism, (2) self-actualization, (3) empathy, (4) problem solving, and (5) assertiveness. 

The leaders scored higher than the general population on all of these scales except for empathy. The study concludes by highlighting the importance of training leaders in emotional intelligence to maximize their effectiveness.

In summary, we all have preferred ways of managing our own stress. Our ability to be flexible, tolerate stress, and be optimistic all contribute to how well we can lead others through stressful situations and have the potential to influence the long-term health of our organizations. Developing these skills, which can be effectively accomplished through a professional coach, is an important part of leadership development.

The EQ Leader: Some Things to Think About

1. Do you consider yourself flexible?
2. Think of some of the major changes and adaptations you have made career wise. How easy or difficult did you find these changes?
3. How have some of the leaders you've worked with managed change?
4. When changes happen at your workplace do you tend to be an early adopter or do you have more of a “wait and see how this turns out” approach?
5. How do you normally deal with stress?
6. What is your most effective way of “de-stressing” yourself?
7. When there's stress at work, are you seen more as a calming influence or do you tend to get caught up in the mayhem?
8. Do you tend to think that things will always work out or do you focus more on how bad a problem is?
9. An exercise we have trained people in at MHS is to come to their manager with solutions, never with a problem. So, whenever something has gone “wrong,” you should have two or three possible solutions, with one recommendation on how to go forward.
10. How can you train yourself to be more (realistically) optimistic?

Thanks for reading my blog.

Are you Leading?

Dr. Deepak A. Patil

CEO, Lead ThySelf