Most executives are coping relatively well with the demands and effects of the economic crisis, but people problems loom on the horizon.
Executives around the world are working longer hours, taking on additional responsibilities, and experiencing higher levels of stress as they struggle to address the economic downturn, according to a McKinsey Quarterly survey.1 What’s more surprising, rather than feeling as turbulent as the economy, executives say they feel relatively stable and content about their companies, their work, and their performance as business leaders since the crisis began. All is not well, though. Beyond the averages—and the executive suites—middle managers report dramatically lower levels of contentment than their more senior colleagues do, as well as less of a desire to stay with their current employers.
In this survey, a range of executives—from corporate directors and CEOs to middle managers—were asked if and in what way the crisis has led to changes in their professional roles and the ways in which they spend their time on and off the job. They also responded to questions about their levels of physical and mental stress and its sources, rated their own performance as business leaders and the performance of their superiors, and identified the capabilities and mind-sets they have found helpful for tackling the new economic conditions.
Most respondents are working more hours since the crisis began, and nearly 40 percent have more responsibilities without the benefit of a new title. But although stress levels have increased, most executives say they can cope. Further, most find their work more exciting and meaningful than they did before the crisis, and almost all—95 percent—are at least somewhat satisfied with their own performance as business leaders. Far fewer are impressed with the work of their direct superiors. As for middle managers, compared with more senior colleagues, they are less committed to staying with their companies, less enthusiastic about their work, less satisfied with their own performance, and far less satisfied than more senior executives with how their bosses are doing.
1McKinsey Quarterly conducted the survey in July 2009 and received responses from a worldwide representative sample of 1,653 executives. Of these respondents, 47 percent are C-level executives or corporate directors, 33 percent are senior executives, and 18 percent are middle managers. (Note that these figures do not sum to 100 percent, because of rounding.)
Quantity and quality of work
More than 80 percent of executives say their organizations’ financial performance has suffered as a result of the crisis. Not surprising, just as many say their companies have already taken steps to reduce operating costs, or plan to do so in 2009, and almost half note efforts to reduce capital investments and increase productivity.2 Executives are working harder in this environment—55 hours a week on average, compared with 45 before the crisis. Two out of three are spending more time than before on directly monitoring or managing operating performance and cash flow. And just over half say they are putting extra hours into setting strategy and motivating employees; four out of ten into dealing with immediate and unforeseen problems and engaging with customers, suppliers, and other external stakeholders.
More than half of the executives who are satisfied with their own performance as business leaders were spending extra time on motivating people—compared with only 30 percent of those who aren’t at all satisfied.
Though monitoring financial performance is crucial in a crisis, the findings suggest that executives should place a higher priority on motivating employees than they are now. More than half of the executives who are very or somewhat satisfied with their own overall performance as business leaders say they are spending extra time on motivating people—compared with some 30 percent of those who aren’t at all satisfied with their own overall performance.
Even executives who are taking more time to motivate their people aren’t always taking the steps that, in our experience, are most effective. They most often motivate by talking about their companies’ values or direction and their financial performance; far fewer express interest in their employees’ lives outside of work or otherwise try to make individual connections with employees (Exhibit 1). A focus on the big picture, we have seen, can be insufficient for motivating middle managers and others when they are grappling with new responsibilities and downsizing programs in an atmosphere of great uncertainty.