In the Classroom I

A Test of Leadership: Keeping Your Head in Stressful Times
(A "Best of Wharton@Work" article, January 2009)

Calmness can be a competitive advantage. "In the current turbulent times, clients, suppliers, employees, and investors are going to be pretty anxious," says Charles Dwyer, academic director of Leading and Managing People and academic co-director of Building Relationships That Work. "People are feeling dysfunctional stress, anxiety, and tension. You have a distinct advantage if you remain calm."

For leaders, negative emotions can ripple across the entire organization. "If leaders show fear, it can spread quickly. Negative emotions can be contagious," Dwyer says. "If you display kindness to other people, that also spreads. Think about FDR's famous statement: ‘We have nothing to fear but fear itself.' The people we admire most stay calm in situations where other people are losing it."

Stress Narrows Options

Stress makes it difficult for people to make good decisions. "Mild stress can sometimes activate people, but anything more than mild puts them into a secondary mode of processing," Dwyer says.

Stress leads to tunnel vision. People fall back on rehearsed reactions. "Stress wipes out options," says Janet Greco, academic co-director of the Building Relationships That Work program and a key faculty member in Leading and Managing People. "One thing that tends to go is flexibility. Whatever your rehearsed stress reaction is, and it could be a good one, that is likely to be the one that pops up. We tend to get too narrowly focused."

These impulsive reactions can be dead wrong if the environment has changed. "You might want to duck and take cover, or go with what you know worked in the past," she says. "But optimally you want to look for the most robust solutions."

Changing Perspective: Seeing the World Through the Wolf's Eyes

To generate robust solutions, you draw together diverse perspectives. Greco says that in her Organizational Dynamics class at Penn, she discusses a retelling of the fairy tale of "The Three Little Pigs" by Jon Scieszka, from the wolf's perspective. In this version, the wolf comes over to borrow a cup of sugar from his neighbors, the pigs. He has a bad cold, sneezes, and inadvertently blows down the little pigs' homes. You need to be able to see the world through the wolf's eyes, she says. "We need to take a broader view. We have to have the capacity to look at a situation from other perspectives so that we increase our understanding of complex situations and responses."

To benefit from the "wisdom of crowds," however, managers not only need to assemble diverse groups but also create the right processes to allow different voices to be heard. "If you just assemble people from different perspectives, then you may have a battle," Greco says. "You have to have good social processes."

In Building Relationships That Work, faculty use the Hermann Brain Dominance Index to help managers understand their own thinking style and the styles of others for better managing these social processes. "You can have many styles at the table, but if you don't make psychic and emotional room for them to be heard, it will sound like you are blocking the other person. Ask yourself: Is there a way I can work with the wolf? How is the wolf a spur to my own development?"

Management Judo

Greco says that it is important to have a personal strategic plan, and revisit it on a regular basis. Aligning your actions as much as possible with your goals gives you more power. Leaders also need to understand the goals of others to draw forth their efforts based on devotion rather than coercion. This is like judo, she says. "The more people are choosing to do what they do, the more power they bring to the task."

The current economic environment might require a detour from your goals. But with a plan, you can ask: How can I make whatever I have to do today move me toward something I can use in the future? It helps you to be wiser about selecting options. "Even if what you have to do to put food on the table is completely irrelevant to what you are aiming at, you can ask yourself what you can do on this detour to make you more ready for the next thing. How can you come out of this better?"

We need to remember that times of adversity can develop hidden strengths that cannot be discovered in more benign environments, she says. "You can see this period as developing the kind of strength that comes from the forging of a steel sword. It doesn't feel good to be hammered, but it makes you stronger."

Zen and the Art of Staying Calm

Meditation is one of the best ways to remain calm, Dwyer says. While meditation for some managers may still evoke images of The Beatles sitting with gurus in India, Dwyer says studies by Harvard researcher Herbert Benson and others have demonstrated the power of evoking the "relaxation response" through meditation. Benson demonstrated that evoking the relaxation response can reduce blood pressure, lower heart rate, change brainwaves, and improve health. Skilled athletes use these approaches to improve their performance.

Simple breathing exercises can have a dramatic effect. Once managers learn these meditation techniques, and practice them for a few weeks, they can instantly trigger the response almost anywhere. "One thing we know is that you can deal with almost anything much better if you can initiate a relaxation response," Dwyer says. "If you do this once a day for a couple of weeks, you can trigger this physiological response when you need it."

The relaxation response can help get rid of tension, and help you to learn new things more quickly and better respond to situations. "You are not suppressing tension," Dwyer says, "You are redirecting the brain not to experience tension."

Dwyer says the technique requires an initial investment of time, which may be why it is not more widely used. We live in a society that looks for quick fixes. Like changes in diet and exercise, meditation requires consistent effort. But the payoffs can be enormous.

Your Life Takes Place Between Your Ears

You may not be able to change the world. Your organization may be engaged in layoffs. Your investments and 401k may be under water. But you can change the way you look at the world. "There are real things going on out there in the world," Dwyer says, "But you can be more relaxed in situations where everyone else is losing it. Most people ‘awfulize,' but you don't have to."

While we may not be able to control the external world, we can control what goes on in our own heads. He points out, for example, that we need to make a distinction between "quality of life" and "standard of living." Our standard of living, or income, may decline because of the recession, but it does not necessarily follow that our quality of life, or satisfaction, has to go down.

"Your whole life takes place between your ears," Dwyer says. "All of our judgments about good or bad are based on an arbitrary base established by a series of accidents in our upbringing. We can change how we think and respond. If you can change yourself and remain calm, you can actually be very helpful to other people. External situations don't have to control the quality of your life."

• Leading and Managing People
• Building Relationships That Work