Berkshire Hathaway Inc. President and CEO Warren Buffett once said, “It’s not until the tide goes out that you find out who’s been swimming naked.”
Today’s real estate market is about to become a living example of this. Our tide is going out and we are going to find out exactly who looks ready to swim.
In a harvard business review article by contributor Kelsey Miller, author cites research that found 53% of leaders become “more closed-minded and more controlling” in high-pressure situations, and 43% of leaders become “angry and passionate” .
Reacting to a difficult situation with anger or outrage will never solve the problem. Instead, the more complex the conflict, the more necessary it is to approach the situation with calm, rational, and intentional thinking. And while there may be negative connotations to a falling market, that’s not a bad thing. It just means that those who are ready, focused, committed and ready to do whatever it takes (the hard not the easy) will win. Those who won’t. If you’re wondering what that commitment, focus, and determination look like in practice, here are some ways to prepare for a market downturn:
Have a plan. Having a good plan is the backbone of resilience and effectiveness for any leader going through tougher times. Remember that the playbook you used in easier circumstances may not apply in a falling market. McKinsey & Company analyzed the performance of nearly 1,000 large publicly traded companies during the 2008 financial crisis and found that there was a small group of companies that outperformed similar companies in their industry. In 2009, the profits of these companies increased by about 10%, while the profits of the other companies fell by almost 15%. The difference, McKinsey found, was that the most resilient companies had effective operational action plans in place and then executed with excellence on those plans.
Train your team. When you educate your team, you develop future leaders within your organization who can help strengthen the business and provide guidance to their departments. More education leads to greater efficiency at all levels of the organization. Studies consistently show that when managers are better educated, their teams are more engaged; and highly engaged teams are positively correlated with increased motivation and productivity.
Develop and hone your skills. As they say, arrogance is the precursor to disaster. Once you think you know it all, your slide into mediocrity has already begun. In a down market, there is simply no room for mediocrity. Anything short of excellence will not suffice. Become a perpetual student of your industry and develop your skills. Read more. Listen to more podcasts. Attend more conferences, whether virtual or in person. Improving your skills will help you unlock all the challenges presented by a tougher market. And the skills you develop shouldn’t just be task-oriented; you also need to hone your skills to develop your emotional intelligence. This will allow you to bond deeper with your team, express your ideas clearly and display rational thinking, especially under pressure.
Develop good habits. Having good habits is the best way to perform what you know. By creating good daily habits, you can ensure that you capture your share (or more than your share) of the market. Remember habit guru and “Atomic Habits” author James Clear’s advice for building habits: stack them. If you already have an existing habit that is positive, pile another on top of it. You’re more likely to stick with a habit if it’s attached to an existing one in your routine. For example, if your habit is to go for a run every morning, you can stack that habit by drinking 16 ounces of water after you finish your run. Habits should not just be developed for your morning routine, but a solid morning routine will be prepare for success throughout the day. Your daily habits should be geared towards meeting the extremely important goals you have for your business. Remember Clear’s message: “You are not rising to the level of your goals. You fall at the level of your systems.
Lean on your support system and mentors. The strongest leaders know they cannot lead alone. John F. Kennedy relied on his brother, Robert Kennedy, for advice and guidance. Steve Jobs had a mentor in Silicon Valley in Bill Campbell. Walgreens CEO Roz Brewer — the highest-paid female CEO, according to a 2021 report — told the Atlanta Business Chronicle on how a college board should operate to help leadership, and the sentiment is universally applicable: “They need a confidant, they need guidance, help and support to accomplish quite an important job.”
Be like Bill Campbell. One of Steve Jobs’ most trusted advisers, Bill Campbell was known in Silicon Valley circles as “the coach.” He coached CEOs like Larry Page, Sergey Brin, Sundar Pichai and Jobs, and was the head coach of the Columbia football team from 1974 to 1979. At one point in his famed career, Campbell was hired to help the senior management of a struggling technology company, Aller. When Go CFO Randy Komisar was questioned by harvard business review author Robert I. Sutton what made Campbell so special, being able to guide leaders through a particularly difficult time while allowing everyone to feel invested in the success of the organization, said Komisar: Campbell’s Door was always open for one-on-one meetings with every member of the company’s team, regardless of title; he singled out people at business presentations to compliment them on a job well done; he knew how much his attention meant to the team and held people accountable based on that idea – if someone kept their commitments, they got more attention from Campbell; and he was very visible at all levels of the organization.
Resist the flippancy anything. Casualness creates victims. Even the smallest task should not be taken with a flippant attitude. As Yoda said, “Do or don’t. There is no try.” As Ralph Waldo Emerson once said, “Do what you want, have the power.
So what’s the message? A falling market is not an obstacle but a welcome challenge, and ‘challenge’ is defined in the Oxford dictionary as ‘a call to enter a contest or competition’. Leaders, this is your call to participate, this is your chance to show the world what you have. When you do, you will lead and succeed through anything.
This article is adapted from Blefari’s weekly column titled “Reflections on Leadership” company-wide. HomeServices of America.