How the financial markets affect your staff
It happens eventually to those in a position of authority or rank. Above all the day-to-day managing, strategy and tactics, leaders must bring something additional to work: presence. This presence — the ability to consistently exude confidence, calm and posture — is oftentimes what separates a successful organization from unsuccessful ones. And it is what causes your staff to look toward you, the leader, for more than just work-related discipline and direction. They also look to you for leadership during today’s volatile and confusing financial times.
Aside from the potential liabilities present in advising an employee on financial matters, your credibility with your entire staff is on the line. In any organization, word travels fast. Your response to a seemingly harmless financial question or two can dent your leadership armor permanently, unless you deliver it properly.
First, understand your staff is more nervous than you. The days of pensions and corporate ladder climbing have been replaced by 401(k)s and the need for an ever-updated resume. Technology has not only ruled many jobs obsolete, but it has also created smartphones that notify the entire world of corporate layoffs in an instant. Your employees live in an environment that is constantly changing. To them, the world of finance is not only foreign, but it creates even more uncertainty and stress.
Second, recognize where you can make the greatest impact. If your employee is asking a personal financial question, it isn’t because they have more money than Bill Gates. Rather, the severity of their financial circumstances has passed the point of silence, compelling them to finally speak up. This is not the time for a hot stock or mutual fund you think will pop. Preach prudence. Use your position to aid staff in being honest with themselves and helping them assess their situation and associated risks. Your calm, realistic attitude will do more than any quick tip or heightened knowledge.
Third, know your limits. It may be inappropriate for you to give significant financial advice to an employee, and you may not be good at it. You may be a professional, but are you a professional investment adviser or financial planner? The most effective way to yield your position of authority is by openly admitting weakness. Telling your employees, “I don't know,” may be the ultimate display of leadership. There is a big difference between guidance and advice. Don't be the expert, refer them to one.
As a leader in your company, your words weigh heavy. By being honest and providing calm, assertive direction, you will improve your staff's financial circumstances and strengthen your role as the leader of the organization.
Jonathan Citrin is founder and CEO of CitrinGroup (www.citringroup.com), an investment advisory firm located in Birmingham, Mich. He is an adjunct professor of finance in the School of Business Administration at Wayne State University.