Tuesday’s annual general meeting of Credit Suisse featured a lot of apologies. Chair Axel Lehmann told investors that he was “truly sorry” for the events that led to its takeover by rival UBS. “I apologise that we were no longer able to stem the loss of trust,” he added, after stating that the bank’s leadership had found itself in a bind “no one could have anticipated”.
I doubt shareholder fury will be substantially eased by such words, particularly given that senior managers of large organisations are widely expected to anticipate events that are hard to foresee. Putting in place robust risk management is very much job number one in the big-bank leadership handbook.
Many have felt unsettled by the wobbles that have rippled out from Credit Suisse, adding to the apprehension already plaguing the economy.
The flurry of deals that we report on this week – including Blackstone’s £700m swoop on Industrials REIT – disguise a sector that is largely still holding its breath.
In these nervous times, good leadership will count for a lot in firms of every shape and size.
I recently discussed these challenges with Knight Frank chair William Beardmore-Gray, who emphasised the importance of maintaining relationships even when there are no deals to be done. “Get close to [clients], sit with them, advise them and don’t expect anything in return because they have nothing to give you,” was his advice for staff in times of paralysis. “You’ll get paid back in spades for showing that kind of approach in the future.”
He also emphasised the positives in today’s situation: “Actually, people are beginning to see clients start to look forward again – after a massive pause.”
The pause is amply demonstrated by the recent collapse in the volume of new construction projects. Contract tracker Glenigan this week published data showing residential construction starts in the first quarter of 2023 were 51% down on the same period last year, with commercial project starts down 42% and the industrial sector in particular down 61% against the first quarter of 2022.
Climbing back out of the doldrums is hard, and managers may do well to brush up on their leadership skills.
There are many pitfalls to avoid. Management experts I’ve interviewed over the years tend to emphasise the value of visibility – nothing unnerves employees like their leaders vanishing from the scene, leaving the rumour mill to fill in the blanks. Body language is another factor that’s easy to forget – if a leader looks stressed, or downtrodden, that posture will rapidly become contagious.
Back at the start of the pandemic, I was given some memorable advice by Ian Smith, chairman of workplace wellbeing firm Welbot and a veteran tech sector leader, about the risks of procrastination: “There’s the right decision, the wrong decision and no decision,” he observed. “No decision can work out – if you’re a big believer in luck. Unfortunately, the outcome is completely out of your hands and probably in the hands of your competitors. So I would much rather make the wrong decision than no decision.”
But if you do make a big call and get it wrong, don’t expect anyone to accept your apologies. That, unfortunately, is part of the business of being in charge.
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