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The One Soft Skill Leaders Need Most During a Downturn

As the downturn hits, layoffs, hiring freezes, and depressing quarterly numbers are going to rear their ugly heads. Here's how to use “change management” stories to rally your team in these times.

Last December, 900 Better.com employees logged onto a surprise Zoom meeting. They were met with a dour message from their CEO, Vishal Garg. “If you’re on this call, you’re part of the unlucky group being laid off. Your employment here is terminated, effective immediately,” he said.

The tone-deaf speech quickly went viral—employees filmed the Zoom call, cursing out Garg as he spoke on a grainy feed. He gave no real explanation for the layoffs and showed little empathy. Instead, he lamented how the experience was affecting him.

“This is the second time in my career I’m doing this, and I do not want to do this. The last time I did it, I cried. This time, I hope to be stronger. We are laying off about 15% of the company for a number of reasons—the market, efficiency and performances and productivity.”

Externally, the press roasted Better.com. Internally, the team that remained was devastated. Three top execs quit immediately; a half dozen more quit soon after. Garg was even forced to take a brief leave of absence.

Garg’s story is a cautionary tale of what can happen when executives forget a crucial trait of good leadership: how to communicate with other human beings.

A lesson for leaders

You've probably been there. Whether it’s layoffs, a hiring freeze, or depressing quarterly numbers, an operations-focused CEO gets in front of the company with a drab account of what’s going on. There’s no rallying cry or inspiring vision of the path forward. Just a robotic announcement that makes you want to melt into the floor.

This happens way too often. A 2020 study found that only 15% of business execs were confident in their company’s top leadership to manage disruption and change—largely due to their inability to communicate a clear vision.

As the economic downturn continues, we need to fix that. Hopefully, most companies won’t need to lay people off. But there will be hiring freezes and cutbacks. Leaders will need to persuade employees to innovate and do more with less. After all, downturns are when the biggest shifts in the market occur and the most transformative opportunities emerge.

In order to meet the moment, there’s an underrated soft skill that top leaders will need at their disposal: the ability to tell a great story.

Tapping into your storytelling superpowers

As humans, we’re programmed for stories. They’re how we pass on knowledge and build connections. Stories are how we began our ascent from the middle of the food chain to the top around 70,000 years ago, when we developed language. Before this, human cooperation was limited to tribes of 50-150 individuals. But once we developed language, we were able to use stories to get thousands—and eventually millions—of humans to cooperate around shared goals, myths, and missions.

Neuroscience research by Dr. Paul Zak has even found that stories are what compel us to care about a cause and inspire us to take action—increasing oxytocin and dopamine production in the brain.

Most of us inherently understand the power of a great story to lead people through tough times. Think of the leaders in your favorite movies. When Bill Pullman had to inspire his ragtag army of fighter pilots in Independence Day, did he say, “Well, we’re so short-staffed that one of our planes is being flown by a crazy drunk. I’m going to have to report to the board that the forecast for humanity this quarter is not optimistic, and we’ll have to right-size the species going forward.”

Hell no! He gave an inspiring speech about how we’d prevail and inspired Will Smith to whoop E.T.’s ass.

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Even if you don’t feel like a gifted speaker, here’s the thing: We’re all natural storytellers.

As Jonathan Gottschall writes in The Storytelling Animal, even when we go to sleep at night, the brain stays up, telling itself stories. We may lose touch with that skill along the way while drowning in a sea of memos and Powerpoint decks. But our storytelling superpowers are inside all of us.

We just need to activate them.

Shane Snow—who co-authored The Storytelling Edge with me and wrote Dream Teams, maybe the best book on teamwork and leadership you’ll ever read—has identified three key principles of story-based change management:

1) Start with your company’s origin story

What’s the mythology behind how your company got started? What were the early obstacles you faced and overcame? Who were some of the early heroes? How did that impact where you are today?

This approach is powerful because research shows that nostalgia makes us more open to new ideas. It’s the apple sauce that makes the pill of change much easier to swallow.

2) Share your personal experiences

Highlight what your life was like during the tough times—how you struggled, how you made it through, and why that experience makes you optimistic for what’s ahead.

Since you’re talking to colleagues who work at the same company, your story will be inherently relatable—and relatability is the foundational building block of great storytelling. By being open and vulnerable, you’ll subconsciously signal to your team that you can be trusted.

As Shane explains: “When this happens, our brains secrete the chemical oxytocin, which makes us feel empathetic and emotionally engaged. This, in turn, starts what psychologists call a “Trust Loop."

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3) Tell the story of what’s to come.

End by previewing the journey your team is about to go on together. Get your Bill Pullman on. What is the singular mission you need to accomplish? What will it take to get there? And what will a better world look like once you accomplish your goal?

Research shows that teams with a strong mission not only drive greater innovation and profitability, they’re also happier and more engaged.

Do this well, and your team won’t walk away feeling like the downturn is the start of a death spiral. Instead, it'll feel like the first page of a new success story you’re writing together.

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