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By Andrew Wilkinson, chairman of Wales Management Council

The greatest danger in any economic downturn is that talk of market gloom can become a self-fulfilling prophecy.

After all, confidence is the very fuel that drives the world economy; prompting people to invest, innovate, spend and consume. It's when there is a serious break in that cycle of confidence that we suffer a downturn.

Frustratingly there is little individual managers can do to influence the depth or length of a downturn. However they can do much to avoid adding to the downward dynamic.

Employees whose morale is affected by talk of a slump can easily experience a dip in work performance which, if replicated across thousands of firms, can ultimately hamper the economy's struggle to regain momentum.

Obviously managers know their staff are reading press stories daily about redundancies, repossessions and mortgage squeezes. It's bound to have some impact on them.

This is precisely the time for managers to bring their leadership skills into play, communicating confidence not just in words but also in body language. It's no use saying positive words while looking at the floor or fidgeting with a paperclip.

Managers shouldn't gloss over any threats either. They inspire their teams by being credible in what they say, so they must be honest about the challenges ahead and offer plausible solutions.

They need to get the message across that things may become tough but, if everyone is prepared to adapt to changed circumstances, there is a good chance of getting through the problems.

Even if they have to break bad news, for example a lost order or even redundancies, they need to show they are keeping their nerve and have a strategy for handling the situation.

They may not have all the answers but their team still needs to feel the manager is in control.

Moreover, it is perfectly reasonable to present options for dealing with the problems but still invite the team to proffer ideas of their own. Done properly, this will make the team feel more involved without the boss losing face or authority With an impending economic downturn there is always a danger that morale may drop, so a good manager needs to detect any subtle changes in the atmosphere and be aware of all information staff are receiving from both internal and external sources.

In particular the manager needs to keep a close eye on the pessimists and cynics - the proverbial bad apples - who can convince colleagues there are major problems looming.

Challenging them openly at team meetings and countering their negativity may be difficult to do, but it is an important part of a leader's role. Bad attitudes are corrosive and must be nipped in the bud.

Unattractive tasks like that are among many extra duties for managers which come with choppy economic waters.

But then again no one said it would be easy. It's more likely they said, when the going gets tough, the tough get going'.

11:01am Tuesday 3rd June 2008

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