IN times of economic tumult, business managers who believe in and practice transcendental leadership have a better chance of bringing the ship to shore, according to Prof. Pablo Cardona, eminent human resource guru of IESE Business School based in Barcelona.

Cardona, who was in Manila recently for a series of lectures for top executives of companies and institutions such the Bangko Sentral ng Pilipinas and the Young Presidents Organization, strongly urged members of top management to embrace the principles of transcendental leadership.

According to Cardona, leaders who espouse the transcendental approach imbue a sense of mission in everyone in the organization, put themselves at the service of their subordinates, are more demanding of themselves, and share success rather than keeping all the medals.

By doing so, they reinforce commitment and enthusiasm in their teams, more so in times of crisis.

An example of a truly transcendental leader for Cardona was Carl Elsener Jr., CEO of Victorinox.

The market leader for Swiss Army knives was a prospering company before their pocket knives were ousted from any airport shop worldwide as a consequence of the terrorist attacks on Sept. 11.

?Since airport shops made up the bulk of Victorinox?s turnover, this announcement posed a great threat,? Cardona said.

So what did Elsener do? Instead of reducing the number of employees, Cardona says that Elsener personally took his highly skilled employees to other companies in the area and asked CEOs to employ them at a reduced salary for a few months.

After Victorinox restructured its product range, which included bright red travel gear with big white crosses available in airport shops worldwide, he got back his people.

The Victorinox CEO was able to count on his people in dour times because employees saw him acting in agreement with the shared mission they all had profited from in good times before Sept. 11, said Cardona. Transcendental leadership had even spurred Elsener to act with a greater sense of urgency since the mission was at stake but with a greater sense of responsibility.

?When measures to combat the crisis ensure the collective interests of shareholders, clients and employees, they will stand a greater chance of being understood and accepted by employees, even when they involve layoffs,? says Cardona.

Another example that Cardona cited was William George, who increased Medtronic Inc.?s stock market valuation from $1 billion to $70 billion over a decade as CEO of the firm. The employees were able to adapt to major strategic changes and at the same time make extraordinary sacrifices because they were fully confident in their leaders.

In contrast, authoritarian CEOs, CFOs and managing directors sheerly focusing on the numbers in the balance sheet might be able to navigate their companies successfully through the financial turmoil by taking ?tough? decisions, said Cardona.

But once the economy picks up again, such leaders will find that they can no longer motivate their workforce to follow a mutual goal. In fact, statistics showed that the majority of these leaders were ousted after failing to motivate employees at the end of the crisis, and hence actually hurt their own careers by taking ?tough? actions.

Transcendental leaders, on the other hand, were able to reinforce workers? commitment and enthusiasm in times of crisis. Once the crisis was over, leaders who maintained their commitment to the mission during tough times did not only survive the downturn but were better prepared for new challenges of the future, Cardona said.

In times of crisis, Cardona noted that many CEOs and their top management revert to an outdated form of leadership that harms both their individual hierarchical positions in the organization as well as the company?s ability to ride through the tough times.

In the past, before the recent global financial crisis, many organizations adopted what is known as transformational leadership. Companies embarked on highly ambitious plans, with objectives such as to double turnover in five years or to become the best company in its class. This was embodied in a vision statement, a strategic plan, and corporate objectives. The role of a leader was to motivate the team.

With the crisis though, ?this leadership style seems to have been abandoned in recent months,? said Cardona. Many companies had to shelf ambitious plans and adopt urgent fire-fighting measures to survive.

?For many, what used to be an exciting project is now muddled with confusion and uncertainty. This, coupled with the lack of short- and medium-term vision, has prompted many executives to consider a return to the old style of leadership, known as transactional leadership,? said Cardona.

In transactional leadership, the key objective of a CEO is to ensure the company?s financial well being through the adoption of an authoritarian (command and control) style of management.

?To some extent, it distills down to a style of leadership motivated purely by financial objectives, which engenders power and fear. This type of leadership is attractive as a fast way of implementing quick short term measures, but it raises fear and centralizing power that undermines employees? motivation and initiative,? said Cardona.

With transcendental leadership, though, the company?s vision and strategy are grounded in a shared mission. According to Cardona, this form of leadership could also be described as mission-driven where during hard times, the leaders could rely on support for this shared mission to convince employees to make necessary sacrifices and changes.

Transcendental leaders also do not limit leadership at their level but rather strive to spread it throughout the organization.

?They are leader-generating leaders, transmitting a sense of mission to their subordinates at each individual level of responsibility,? he adds. ?Transcendental leaders view their function as a service to their subordinates so that they in turn will be able to carry out the mission at their level in the hierarchy. As leaders of leaders, they demand greater responsibility and prefer to share success with subordinates rather than keep all the medals for themselves.?

Cardona, who specializes in organizational development and people management, is noted for having introduced the concept of transcendental leadership as early as 2000. His visit to the Philippines is part of a program sponsored and organized by the University of Asia and Pacific (UA&P), IESE?s Associated Business School in the Philippines.

In the past year, over 1,000 senior executives from diverse sectors in the Philippines have participated in conferences delivered by various IESE professors. Since its founding in 1958 in Barcelona, IESE Business School has gained a reputation for its management education programs and is consistently ranked among the world?s best.

IESE programs are designed and delivered by faculty who are recognized for their global mind-set, dedication to research, highly personal teaching style, and close ties to the international business community. While based in Spain, IESE delivers courses all over the world.