Title: Time to step up

Sub-title: During periods of hardship, the leadership that entrepreneurs provide is increasingly crucial.

Robert Rudy’s job is tough even during good times. The company he heads, AHF Aerated Home Furnishings, markets pillows, comforters and other bedding products, which its retail customers often regard as commodities. So over the years, this seasoned entrepreneur has been forced to keep his pencil sharp. However leading this large manufacturer and distributor through Canada’s current downturn is proving particularly challenging.

“Consumers are increasingly savvy about where price points should be on nearly every product. That means when many are trying to their stretch dollars to the limit, we need to find more ways to remain relevant,” says the Montreal-based entrepreneur. “Just as importantly though, our employees know how hard it is out there, and they are concerned too.”

AHF Aerated Home Furnishings is better poised than many to navigate the current downturn. The company has been around for more than 30 years and has lived through the recessions of the early 1980s and the early 1990s. Even better, Rudy, its current leader, has clear ideas regarding where he wants to take AHF.

Vision, communication, adaptation and motivation

“My biggest priority is keeping our employees on board and making sure that we are all moving in the same direction,” says Rudy. “So we decided to be straightforward about the challenges we are facing, right from the start.”

Another important move that Rudy made was to identify key trends and to find ways that AHF Aerated Home Furnishings, could adapt to them. For example, it’s no secret that Canada’s manufacturing sector has been going through tough times. Freer trade, China’s ascension to the WTO and increasingly sophisticated supply chains have pushed hundreds of thousands of jobs overseas.

However Rudy was also quick to notice an increasing number interest groups lobbying for the implementation and protection of local manufacturing solutions as a way to reduce greenhouse emissions. “I am a big environmentalist and a couple of years ago I went to a sustainability conference that was attended by students, businessmen and labour representatives. I was surprised to realize that a lot of us are in the same boat on a lot of issues,” says Rudy. “One example, almost everyone was behind these “buy local,” movements, which are now springing up all over the world, as a way of reducing the energy consumption caused by excessive transportation.”

Rudy decided to jump on the bandwagon. Along with 20 or so employees, he launched discussion groups, spoke to clients and even produced a video about the advantages of buying Canadian-made products. “I realize that this initiative is not the only solution,” admits Rudy. “But it does provide a common goal that we can all work towards.”

Leadership during tough times

According to BDC’s President and CEO Jean-René Halde, entrepreneurs like Rudy are right to focus first on motivating employees. “Building leadership capacity is now even more critical as it will help you successfully ride a turbulent economy,” says Halde. “Everything we do happens through people. We bet on people, not strategies or systems.”

Eileen Fisher, a professor of entrepreneurship and family enterprise at York University’s Schulich School of Business agrees. But she adds that guidance needs to come right from the top. “Unlike in bigger companies, in which leadership is often transmitted indirectly thorough many levels, in smaller and medium sized businesses, an entrepreneur’s influence on employees is often immediate and direct,” says Fisher. “That means their actions, particularly during times of stress, are crucial.”

Another key says Fisher is that entrepreneurs need to balance their need to keep employees informed about the challenges they face, with staying optimistic and putting a brave face on things. This is particularly important if employees are being asked to endure sacrifices such as temporary layoffs or reduced work hours.

“Small businesses, which tend not to carry too much debt, are often surprisingly better placed than larger ones to hunker down during tough times,” says Fisher. “Furthermore, SMEs are often to a large degree extensions of the owner or the president. So if he can provide good leadership, they are off to a very good start.”

Sidebar: Leadership during tough times: practical advice from the greats

"All great leaders have had one characteristic in common: the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership."

John Kenneth Galbraith

Leaders need to be optimists. Their vision is beyond the present.

Rudy Giuliani
 

“Inventories can be managed, but people must be led.”

Ross Perot

"Leadership is a combination of strategy and character. If you must be without one, be without the strategy."

Gen. H. Norman Schwarzkopf

“In the past a leader was a boss. Today’s leaders must be partners with their people…they no longer can lead solely based on positional power.”

Ken Blanchard.

"Leadership is not magnetic personality — that can just as well be a glib tongue. It is not 'making friends and influencing people' -- that is flattery. Leadership is lifting a person's vision to high sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations."

Peter F. Drucker

Peter Diekmeyer (peter@peterdiekmeyer.com) is a Montreal-based freelance business and economics writer

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