Today's economic quandary is further evidence that nobody really knows the future of our domestic or global economy. Yet there is one thing we can be pretty sure of: Leadership, while always integral to an organization's success, becomes especially critical during periods of uncertainty.

A 2008 survey by the Center for Public Leadership at Harvard's Kennedy School found that 80 percent of the American people believe we have a leadership crisis in the country today. Unless we get better leaders, 79 percent feel that the United States will decline as a nation.

Business leaders rank near the bottom of the list, with only 45 percent reporting confidence in them, down from 59 percent last year.

For many leaders, the criticisms may be well deserved — yet leading a company, or even a small team, in a slowing economy has plenty of challenges. The range of potential outcomes of leadership (or lack of) in today's turbulent economy is so wide that many companies may not survive.

"... Decisions made in the immediate future are critical, for they will influence how well organizations manage themselves now and compete over the longer haul," says The McKinsey Quarterly. "The winners will be companies that make thoughtful choices — despite the complexity, confusion and uncertainty — by assessing alternative scenarios honestly, considering their implications and preparing accordingly."

Perhaps the most basic but no less profound of these challenges is approaching and answering the question, "What should I change, stop or continue doing?"

Don't Ignore the Crisis
Don't pretend there isn't a problem, as withholding information from staff can erode morale and destroy trust.

Be candid about the challenges and opportunities ahead. This downturn is producing huge volumes of anxiety and questions among workers, yet many company leaders haven't been communicating with employees to address the current situation. In a recent survey of 514 employed Americans, more than half the respondents had not heard from company leaders at all regarding the impact of the financial crisis on their company.

"Pretending that bad news will stay away is a losing strategy, yet many corporate managers do try to avoid the subject," notes Harvard Business' Leadership at Work. "Be straight with people; explain what the downturn means and the implications on your business."

Don't Panic
Overcome the inclination toward apathy, cynicism and defeatism. Yes, things are scary right now, and panic is a common response to tough times. But fear-based decisions can be costly.

Instead of trying to turn the organization around, make small changes that matter. Rather than obsess over finding a new deal or creating a new business model — a result of the panic-driven assumption: "We better do something radically different to get through this" — keep doing what you do best and reevaluate the areas that can be improved.

Articulate Vision, Values and Focus
Employees need to understand where their organization is going. They also need to have some idea of how they are going to get there. Leadership takes clear, honest communication with employees, describing the destination that attracts enthusiasm and figuring out roadmaps that lead to engagement.

"On a personal level, the organization's vision is a manifestation of who you are and how you want to operate," Inc.com noted during the 2001 downturn. "Use it as a source of inspiration and a touchstone that grounds you when you're feeling unsettled and unsure of what to do next."

That is as important as ever.

Set the Example
"Leadership is critical in codifying and maintaining an organizational purpose, values and vision," as the new book The Ownership Quotient puts it. "Leaders must set the example by living the elements of culture: values, behaviors, measures and actions. Values are meaningless without the other elements."

Real leaders explain what they expect of you, and whether you are doing it or not, while recognizing your contributions to the organization's success.

Leaders should set the example and assess themselves in these areas. Are they as committed to the same values and vision? Are they making the same sacrifices? Are they carrying their load?

Don't Waste the Crisis
Don't fail to realize that the competition is having problems just as you are! The way to stay ahead (or move ahead) is to "figure out how to increase the perceived value premium of your service," says Management-Issues. This involves "hundreds of small and big, CLEVER changes that your competition doesn't understand because they are focused on margins rather than value."

The biggest way to waste this crisis is by overlooking the workforce. In a recent survey of 150 senior executives, one-third of respondents said lack of open and honest communication with staff members tops the list of management missteps.

Leaders should be listening to employees and recognizing the potentially awesome returns wrought by investing in workers. It is crucial that leaders be visible, listen with genuine concern and communicate with honesty.

What we're experiencing right now is causing anxiety everywhere, particularly in the workplace. Organizations should be using this stress as innovative fuel. "A crisis is a chance to break ingrained structures and behaviors that sap the productivity and effectiveness of many organizations," says McKinsey.

Randstad USA recently reported that just over 40 percent of workers felt their "bosses were open to new ideas." Employers should be exploring new possibilities by getting employees involved, having them brainstorm and unleashing all creative juices, but keep focus on the business' vision.

It's not absurd to presume it will be this untapped talent that will help the company survive the downturn. Rather than expound on such platitudes as "Our people are our most important resource," Leadership at Work says, prove it.

What leadership practices would you recommend during these tough times? Let us know in the Comments below.

Resources

National Leadership Index 2008
by Seth Rosenthal, Todd Pittinsky, Sadie Moore, Jennifer Ratcliff, Laura Maruskin and Claire Gravelin
Center for Public Leadership - Harvard Kennedy School, Nov. 20, 2008

Leading Through Uncertainty
by Lowell Bryan and Diana Farrell
The McKinsey Quarterly, December 2008

Company Leaders Not Communicating With Employees On Financial Crisis
Weber Shandwick, Oct. 13, 2008

In a Downturn, Please Put Aside Pathetic Platitudes
by John Baldoni
Leadership at Work (Harvard Business Publishing), Aug. 22, 2008

Managing Uncertainty in an Economic Downturn
by Jamie Walters
Inc.com, September 2001

The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage
by James Heskett, Earl Sasser and Joe Wheeler
Harvard Business School Press, December 2008

Do Not Waste This Crisis
by Stew Friedman
Better Leader, Richer Life (Harvard Business Publishing), Nov. 25, 2008

Recession Survival Strategies
by Max McKeown
Management-Issues, Jan. 5, 2009

Lack of Communication with Staff Most Damaging to Morale
Accountemps, Nov. 6, 2008

Focusing on Employees Can Pay Future Dividends
Randstad USA, Oct. 20, 2008

Additional

How to Manage Your Team in a Downturn (and Come Out on Top)
by Lindsay Blakely
BNET, July 2008

Failed Leadership Caused the Financial Crisis
by Bill George
U.S. News & World Report, Nov. 19, 2008

Here We Go Again: Leading in Tough Times
by Lee J. Colan
Change This, Dec. 3, 2008

A Leader's Manifesto
by Kelley Eskridge
Humans at Work

International Management Survey: Employees Assess Their Manager
BPI/SSP-BPI Group, Feb. 25, 2008