Our Strategic Partner, Prof Sattar Bawany shares his views on what leaders should do to successfully lead through turbulent times ahead.

1. 19/04/2017 Leading through turbulent times, SME - THE BUSINESS TIMES
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http://www.businesstimes.com.sg/sme/leading-through-turbulent-times
Leading through turbulent times
In a downturn, the "climate" within an organisation - when workers get together and talk - can adversely a ect results.
 Tuesday, April 18, 2017 - 05:50
IN recent years, Singapore has shown a slowdown in economic growth and this is expected to continue in the future.
SATTAR BAWANY
by
While running leaner is a must in a sluggish economy, not every money-saving measure is an e ective one. Within organisations, negative feelings are
compounded as colleagues interact. SME leaders must skilfully address the unspoken needs of their sta . PHOTO: ST FILE


2. 19/04/2017 Leading through turbulent times, SME - THE BUSINESS TIMES
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The reality is that businesses today operate amid uncertain global economic conditions, heightened geopolitical risks and a backlash
against globalisation. At the same time, the digital economy is rapidly transforming business and disrupting operating models.
Against this backdrop, the Committee on the Future Economy (CFE) and the 2017 Budget had announced measures to make it more
conducive for Singapore to continue to develop a digital economy to encourage innovation and promote entrepreneurship.
Impact of economic downturn on SMEs
With the looming economic downturn, SMEs that need to reduce costs seem to fall back on one natural response - budget cuts. While
running leaner is a must in a sluggish economy, not every money-saving measure is an e ective one. Unfortunately, most business
owners make the mistake of reducing employment costs rst, since eliminating salaries immediately frees up a large amount of
capital.
However, there are alternatives to retrenching employees. Flexible wage structures, for example, can help many SMEs to reduce wage
costs quickly to save jobs and stay cost competitive. The monthly variable component (MVC) mechanism, which has been
implemented successfully by many organisations during the last nancial crisis, allows these companies to adjust wages in response
to changes in the business environment without having to wait till the end of the year to adjust variable bonus payments and other
annual variable components.
SEE ALSO: P&G makes US$100m digital innovation move at Singapore centre
What must SME leaders do to ride out this economic storm?
The suddenness and severity of the current economic downturn has inevitably generated a shared sense of shock and foreboding.
The media's relentless reporting of the latest bad news fuels this mood and only adds to a sense of insecurity and lack of con dence
in the future.
SMEs should also resist the urge to react to a downturn by putting the brakes on their training and marketing budget, because it can
help a business gain a competitive advantage over its competitors. SMEs should instead focus on developing their human capital as
well as building up their brand and business in the industry they operate in. It is critical to view human capital development or
training as well as marketing as an investment rather than an expense.
Within organisations, negative feelings are compounded as colleagues interact. Research and experience demonstrate that feelings
and states of mind are highly contagious. In the workplace, all employees can be in uenced by a prevailing mood of anxiety, which
gradually dominates the organisational "system". Negative thoughts and feelings predominate while more positive views become
subtly excluded or di cult to express. This creates an intangible but powerful emotional backdrop that can be termed "systemic
anxiety".
SME leaders must understand the dynamics that lie "below the surface" of their organisations and skilfully address the unspoken
needs of their sta . This takes maturity and skill but will maximise the chances of weathering the economic storm and emerging
strengthened when times improve. Those businesses that do not achieve this will nd their commercial problems compounded by
destructive internal dynamics and underperformance. Leaders also often fail to appreciate how profoundly organisational climate
in uences organisational results. Research has shown that it can account for nearly 30% of nancial performance.
Today's turbulent business environment demands that individuals and organisations perform at higher levels and with greater speed
than at any time in the past. Organisational leaders and team members alike must place a new emphasis on learning and the
harnessing of individual and collective creativity.

3. 19/04/2017 Leading through turbulent times, SME - THE BUSINESS TIMES
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During the turbulent times, SMEs leaders will face the almost overwhelming task of restoring con dence and respect of their
employees in leadership and business. They are being called upon to guide organisations through times of turbulence and
uncertainty, to show the way forward and to set an example. And all this in the face of a recessionary economy and in a climate of
cynicism and mistrust - tough economic and political circumstances by any standards.
Aligning people is about generating awareness and understanding of the di erences between individuals in the way they prefer to
work and the way they make decisions or manage relationships. By creating a common understanding - a common sense of purpose
and a shared commitment to action evolves.
The writer is CEO of the Centre for Executive Education
SINGAPORE SMES
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