By Ryan Gottfredson– author of Success Mindsets.
Over years of working with organizational leaders as a leadership development researcher and consultant, one thing that I have learned is that organizational leaders generally want to have a positive impact on those that they lead. They recognize they are in a unique position to positively shape and impact the lives of others, and they generally want to make the most of it. Stated differently, they want to live up to their ideal self to have their ideal positive influence.
But, actually having a positive influence is easier said than done, especially when the economy is not going well.
In fact, my heart goes out to all organizational leaders whose organizations are being negatively impacted by cancelled events and travel restrictions. Some businesses are losing incredibly meaningful sums of money that they were counting on. Many people are losing their livelihood and likely their businesses.
And even more broadly, with a slow down in money being put into the marketplace, we are seeing large hits in the stock market, essentially putting us in to a “bear market,” which is either currently affecting or will be affecting essentially all organizations.
It is during times like this that are truly going to test leaders.
Leading in a Bear Market
Leading during a slowing economy is difficult because the reality is that while leaders want to have a positive impact on those they lead, they are feeling a significant amount of pressure to protect themselves and their organization, which can come at the expense of those they lead.
Stated differently, truly effective leadership is hard when times are good, but it is even more challenging when times are bad because when times are bad, leaders face great pressure to protect themselves and their investments.
How Can Leaders Rise Above the Negative Pressures They Face?
The primary topic that I research is mindsets. Mindsets are the mental lenses that we use to see and interpret our world in unique ways. They are the reason why two leaders can see the same situation (e.g., a bear market), yet see the situation different (e.g., a problem versus an opportunity).
Fortunately, there has been 30+ years of academic research on mindsets that helps us to identify what mindsets leaders need to adopt in order to lead effectively, especially in a bear market, in order to have the positive influence that they innately want to have.
There are four sets of mindsets we need to consider. Each set ranges on a continuum from negative to positive.
Four Sets of Mindsets
Fixed and Growth Mindsets. A fixed mindset is the belief that you and others are unable to change your talents, abilities and intelligence. It differs from a growth mindset, which is the belief that you and others are able to change your talents, abilities and intelligence.
Since those with a fixed mindset do not believe that they can develop, they are inclined to internalize failure. Thus, they prioritize protecting and advancing their image.
Since those with a growth mindset do believe they can develop, they care less about their appearance, and more about their growth.
Over 30 years of research on these mindsets indicates that those with a growth mindset are going to navigate change and crises (i.e., bear market) much more effectively.
Closed and Open Mindsets. When leaders possess a closed mindset, they are not open to the ideas of others, often because they believe that what they know is best. When they believe that what they know is best, their primary focus is on being seen as right.
Leaders with an open mindset are open to the ideas of others and are willing to take those ideas seriously. This is because they acknowledge that they do not have complete information and can be wrong. With an open mindsets, leaders are not concerned about being seen as right; rather, they are focused on finding truth and thinking optimally. Because of this, they are more comfortable with ambiguity, more open to learning, and are more likely to make better decisions in a bear market.
Prevention and Promotion Mindsets. Leaders with a prevention mindset are focused on not losing and avoiding problems, while leaders with a promotion mindset are focused on winning and gains.
Leaders with a prevention mindset are primarily concerned about avoiding discomfort. As such, they are focused on avoiding problems, not taking risks, and maintaining the status quo. Leaders with a promotion mindset are focused on what is truly important: reaching a specific goal, objective or destination. As such, they anticipate problems, are open to take risks (believing that without risk comes no rewards) and seek to advance rather than maintain the status quo.
The ultimate difference between these two mindsets is that leaders that have a prevention mindset run from the problems associated with a bear market as a way to stay safe, even if it means walking away from goals. Leaders that have a promotion mindset are willing to face the challenges of a bear market, prepare for them, and take them head on, always looking for opportunities to advance closer and closer to their stated goals.
Inward and Outward Mindsets. Leaders with an inward mindset see the people they work with and serve as objects. Leaders with an outward mindset see them as people and valuable partners.
When employees have an inward mindset, they see themselves as being more important than others. This causes them see the people they work with and serve as objects.
When employees have an outward mindset, they see themselves as equals of, if not inferior to, their followers. This causes them to see the people they work with and serve as people and valuable partners.
Often during a bear market, leaders are inclined to take on an inward mindset and inclined to make decisions that make them feel more secure, even if it comes at the expense of those they lead. To navigate such an environment in a manner to have a positive influence, leaders must develop or maintain an outward mindset.
What Mindsets do You Have?
Do you have the mindsets necessary to lead effectively in a bear market? To help you answer this question, I have developed a free 20-question mindset assessment: https://ryangottfredson.com/personal-mindset-assessment. It will provide you with an individualized and comprehensive mindset report, including directions on how to improve your mindsets. As you awaken to the quality of your current mindsets, you will enhance your self-awareness and become empowered to become more of the leader you want to be and have more of the positive influence you want to have.