How a leader handles adversity or a crisis can make or break their legacy. Handle it properly and people will follow. Handle it improperly and people will distance themselves.
Leadership currency is created in the handling of various situations. The better those situations are dealt with, the more leadership currency is accumulated. The reason leadership currency is important is because once some has been accumulated, people will give you the benefit of the doubt when you make a mistake. The more leadership currency you have, the more forgiving people will be when you make a mistake.
And although this may sound counter-intuitive, you can actually accumulate more leadership currency by the way you handle a mistake that you have made.
So how do you accumulate leadership currency?
- You are transparent about issues and problems within your organization. You tell the truth about what is happening, what is being done about it, and how long it will take.
- You take accountability. You accept blame where appropriate and don’t point fingers at others.
- You show leadership. You stay in the forefront and deflect criticism away from your team members and peers. You lead the charge in dealing with broader issues that affect your entire industry.
- You show emotion. You show genuine compassion and sympathy for those that have been impacted.
- You act decisively. You take action quickly, even if that action is unpopular. The greatest fear is the fear of the unknown, so you need to remove that.
Some examples of leaders who accumulated a great deal of leadership currency during adversity include Michael McCain of Maple Leaf food during the listeria crisis, Rudy Giuliani after 9/11, and Lou Gerstner when he first took over at IBM.
What are you doing to build up your leadership currency?