The Influential Leader January 5, 2010, 2:21PM EST

Joseph Grenny: What the Recession Taught Me

With a new year facing us, I reflect on the lessons from 2009 that I plan to carry into 2010—and beyond

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Like many of you, my business partners and I approached 2009 with a sense of dread. At this time last year, capital markets were in free fall, the housing markets had collapsed, and personal and corporate balance sheets had evaporated.

As our company approached our annual planning exercise, we took a definitively defensive posture. Our primary goal was to survive the predicted apocalypse. Many of our competitors had already announced deep staff cuts. Some of our peers were wrapping up 2008 with reported declines in revenues of 30% to 40%. Convinced that a vanishing tide would most certainly drop all boats, we planned for a variety of negative scenarios.

How would we respond, for example, to a 10% decline in revenue? What if we took a 50% hit? It was a nauseating exercise, complete with drawing new organizational charts with far fewer names on them. Because we love the people we work with, we went so far as to talk about how to discharge our ethical duties to our dear friends when ushering them out the door.

Before I proceed, let me be clear that I think we would have been foolish not to consider these eventualities. However, in the midst of defensiveness, we whipped ourselves into a funk. Fear-based planning left the more interesting questions not only unanswered, but unasked. That's one of the lessons of 2009 I never want to forget.

You see, as we wrapped up our bunker-mentality discussions, a new thought occurred to us. The shift began when one of my colleagues said: "We're not General Motors in 1980 with 45% market share. So who cares if spending across our industry declines? We're not so big that we'll necessarily have to absorb any of that decline."

In fact, opportunity was calling us

That got our attention. "The crucial question is," he continued, "do leaders need what we have to offer right now? In fact, do they need it now more than ever?"

This was not a hard question to answer. Our company has spent decades perfecting methods that enable leaders to engage their people far more effectively. What better time to worry about the problems we solve than when those problems are most acute?

"Even if industry spending dropped from $100 billion to $50 billion, couldn't we get a far bigger share of the smaller market if we do a much better job going after it?" He sat back in his chair and concluded: "The economic problem isn't the end of the discussion. It's the beginning."

I can still remember the moment when the new discussion began. A powerful new energy filled the room. It wasn't denial of our grim reality, but a matter of viewing things with fresh clarity. If we had to compete for dollars yesterday, we'd have to compete for them today. And if our services mattered yesterday, they might matter even more tomorrow. The turning point in our discussion came when our focus changed from defending to serving.

We concluded that if we could not find a way to compete in 2009, we didn't deserve to lead our company. The real test of influence is not leading when all is sunshine and roses. Real leadership is about influencing an organization to thrive when times are toughest.

recession: a terrible thing to waste

We laid out some principles to guide our strategy in 2009. And now that we've closed the books on a trying, but successful, year, I'm starting off the new year determined to retain these crucial influence lessons.

A recession is a terrible thing to waste, because:

• We were not the only executives on the planet whose peripheral vision was narrowed when our survival instincts kicked in. Others were similarly locked into the tunnel vision of defensive planning—cutting back on marketing, sales, product development, etc. However, we eventually chose to lean into the headwind rather than hunker down. In the process, we made many more friends this year than we could have in happier times. We invested more in research, product development, marketing, and sales than we had in any previous year. Most of those investments paid off.