6 keys for leading into the storm during a market downturn

We are facing into the wind. As we navigate a market none of us have seen before, numbers are down, and morale is in short supply. If you are the leader of a team, the question is, “How do you keep your team members motivated when they must do substantially more work to earn dramatically less income?”

The answer, of course, is effective leadership. The challenge, however, is that agents who entered the business after 2011 have never encountered a significantly down market and, in many cases, have little or no idea how to respond to the new reality.

In his book, Leaders Eat Last, Simon Sinek provides key insight into why some teams manage to effectively traverse difficult seasons while others seem to come apart at the seams.

The good news is that providing great leadership is not rocket science: it just takes an understanding of the fundamentals and a willingness to follow the roadmap regardless of its impact on you personally. And therein is the rub: Effective leadership begins with the idea that it is not about the leader – it is about the team.

Ironically, we tend to view effective leaders as those who can build large organizations and make massive amounts of money for themselves and the few individuals at the top. A glaring example would be the individuals who led the way into the foreclosure crisis — and who, at the end of the day, avoided legal prosecution and managed to extract, from the ruined ashes of their corporations, massive personal gain in spite of their ruinous behavior.

True leadership is the opposite: Effectiveness is measured from the bottom up — if those in the lower ranks of any organization are flourishing in a nourishing culture, feel vibrant and cared for and are reaping the rewards of their efforts, then the leaders at the top are truly successful.

Sinek states, “If our leaders are to enjoy the trappings of their position in the hierarchy, then we expect them to offer us protection. The problem is, for many of the overpaid leaders, we know that they took the money and perks and didn’t offer protection to their people. In some cases, they even sacrificed their people to protect or boost their own interests.

“This is what so viscerally offends us. We only accuse them of greed and excess when we feel they have violated the very definition of what it means to be a leader.”

Based on Sinek’s book, Here are 6 key truths about effective leadership:

1. Effective leaders eat last

Sinek: “The true price of leadership is the willingness to place the needs of others above your own.”

Effective leaders understand the needs of their team and consciously work to meet those needs before meeting their own. Every time I write about real estate teams, I receive comments from those who disparage teams as places where team members get used, burned out and cast away in the name of the team leader making a profit for themselves.

While that may be the reality in some teams, I know of many other teams where the opposite is true.

As an example, when the market shifted dramatically in May of 2022, the result for many teams was a dramatic loss in income. In order to survive, it became necessary to slash expenses. Some organizations chose to trim expenditures by laying off staff. In contrast, other team leaders, desiring to keep their highly trained team together, asked for short-term voluntary salary reductions while they themselves cut their income to zero until such time as they could restore salaries and return to profitability.

Sinek echoes this sentiment by declaring, “Great leaders truly care about those they are privileged to lead and understand that the true cost of the leadership privilege comes at the expense of self-interest.” Unfortunately, in many cases, the exact opposite is true.

2. Effective leaders lead with purpose

Sinek: “Good leadership is like exercise. We do not see any improvement to our bodies with day-to-day comparisons. In fact, if we only compare the way our bodies look on a given day to how they looked the previous day, we would think our efforts had been wasted. It’s only when we compare pictures of ourselves over a period of weeks or months that we can see a stark difference. The impact of leadership is best judged over time.”

Put succinctly, they have the long game in view.  Mark Buonassissi, director of information technology at Evolv Consulting, explains, “Developing your long game as a leader is essential for creating a strong vision for the future and aligning goals accordingly. This involves building robust relationships with team members, empowering them, and nurturing a culture of continuous improvement.”

Sinek adds, “I know of no case study in history that describes an organization that has been managed out of a crisis. Every single one of them was led.”

Obviously, management is important. It can be defined as controlling a group of individuals to meet a specific task or objective. Leadership, on the other hand, is the act of inspiring, motivating and enabling others to achieve success. One focuses on the immediate, the other the long term.

Management simply requires a job description; leadership requires a well-articulated mission, vision, purpose and values.

3. Effective leaders provide safety

Sinek: “Leaps of greatness require the combined problem-solving ability of people who trust each other.”

Trust always flows from the top down. There are so many examples of companies that failed to flourish because subordinates knew there were issues and even had the ability to solve them, but never felt they had the freedom to express their concerns for fear of being ignored, chastised or even fired.

Stress is a killer in the workplace. According to Joe Pindar of Champion Health, surveys done in the UK reveal that the top four stressors are

1. Workload
2. Lack of control
3. Lack of support
4. Senior staff members

All four of these are environmental issues controlled by leadership. It is also interesting to note that the same survey reveals that workplace stress increased from 2022 to 2023.

Sinek clarifies, “Stress and anxiety at work have less to do with the work we do and more to do with weak management and leadership.” In other words, the key stressors in a work environment are the result of the leadership failing to provide a safe, nurturing environment where team members, even if the workload is heavy, feel that they have the support they need to succeed.

4. Effective leaders listen

Sinek: “It is not the genius at the top giving directions that makes people great. It is great people that make the guy at the top look like a genius.”

If this is true, then great leaders are great listeners. The age-old adage “My way or the highway” is a classic holdover from top-down management that gives no credence to the idea that employees or team members might actually know more about their jobs than the leader.

Visiting an automotive manufacturing plant a number of years ago, I observed a well-positioned bulletin board with employee names prominently displayed along with the suggestion they had made that had, in turn, been implemented. There were numerous names on the board arranged in order of the cost savings realized by their suggestion.

The suggestions were not major: An example was the exclusion of an unnecessary screw that, over the product run of thousands of vehicles, added up to significant savings, not only from the cost of the fastener, but the time required to install it.

By listening to the team on the production lines, the leadership was able to realize extensive cost savings, all the while building morale by honoring those who had made the suggestions and opening the door for more participation from those on the lines.

A leader I admire has often stated, “There are no sacred cows in our workplace.” Put another way, “There is nothing in our organization that does not warrant close scrutiny and ongoing evaluation by anyone on the team.”

Since the goal of a leader is to hire people better than themselves for every position on the team, it goes without saying that the leader should listen to their team members when suggestions come from their sector. While leaders should always have the final word, that comes only after everyone at the table has had a chance to present their opinions and advice.

5. Effective leaders provide inspiration

Sinek: “Returning from work feeling inspired, safe, fulfilled and grateful is a natural human right to which we are all entitled and not a modern luxury that only a few lucky ones are able to find.”

As the nation’s workforce was sequestered at home during the pandemic, many began to realize that they were not happy with their current jobs. This growing dissatisfaction led to what has been coined, “The Great Resignation.”

A Pew research paper states, “Majorities of workers who quit a job in 2021 say low pay (63 percent), no opportunities for advancement (63 percent) and feeling disrespected at work (57 percent) were reasons why they quit, according to the Feb. 7-13 survey. At least a third say each of these were major reasons why they left.” 

Joseph Fuller and William Kerr of the Harvard Business Review disagree that the pandemic was the cause of The Great Resignation; in their view, the sequestering of the workforce merely highlighted an already existing problem.

They explain, “In our view, five factors, exacerbated by the pandemic, have combined to yield the changes that we’re living through in today’s labor market. We call these factors the Five Rs: retirement, relocation, reconsideration, reshuffling, and reluctance.

“Workers are retiring in greater numbers but aren’t relocating in large numbers; they’re reconsidering their work-life balance and care roles; they’re making localized switches among industries, or reshuffling, rather than exiting the labor market entirely; and, because of pandemic-related fears, they’re demonstrating a reluctance to return to in-person jobs.”

CNBC weighed in in a post by Leah Collins (Aug. 12, 2022), citing a Gallup poll stating that

“along with dissatisfaction, workers are experiencing staggering rates of both disengagement and unhappiness. Sixty percent of people reported being emotionally detached at work and 19 percent as being miserable. Only 33 percent reported feeling engaged — and that is even lower than 2020. In the U.S. specifically, 50 percent of workers reported feeling stressed at their jobs on a daily basis, 41 percent as being worried, 22 percent as sad, and 18 percent angry.”

In contrast, leaders who inspire are more likely to retain employees and team members, according to Maya Hazelgrove of Stanton House, who states:

“Inspiration in the workplace can be a powerful tool to boost productivity and increase engagement among employees. Inspiration is defined as the process of being mentally stimulated to do or feel something, especially to do something creative. In the workplace, inspiration can come in many forms, such as a new idea, a challenging project, or a motivating leader. When employees are inspired, they are more likely to be engaged, motivated, and productive.”

Simon Sinek sums it up: “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” The better you inspire, the more likely that your team members will stay and flourish.

6. Effective leaders defy convention

Sinek: “When a leader embraces their responsibility to care for people instead of caring for numbers, then people will follow, solve problems and see to it that that leader’s vision comes to life the right way, a stable way and not the expedient way.”

Instead of looking for ways to milk the team for their own benefit, effective leaders work hard to ensure their team members are succeeding at the highest level. Christen Killick agrees, stating,

“It seems a simple conclusion to me then, that regardless of what we need to get done today, we are people leading people — and there is no other way to succeed at that than with a people-focused approach.  There are times when we must remain elevated and able to make ultimate, big-picture decisions; but we must be eye-to-eye often with those we lead if we’re going to make those decisions in ways that maintain trust and security. We must ensure continuity, but not at the expense of leaving loyal and dedicated people behind because we have jumped too far ahead.  Leaders are only leaders if they have someone to lead, and ultimately the success of their leadership will be decided by whether those they lead continue to come along with them, investing their energy as they do so.”

The only real question, then, is are you willing to pay the price required to become an effective leader?