It's when times are toughest that everyone most clearly sees authentic leadership. This is when much-repeated claims like "our people are our most important assets" ("leaderspeak") are proven true, or just so much hollow rhetoric. How managers handle economic downturns and sudden cost-reduction pressures, for example, speaks volumes about their leadership – or lack thereof. If an organization has strong leaders who truly care about people and want to build long-term trust, layoffs are always the very last, desperate step. Such leaders operate from core values of partnership and participation. They don't look at people within the organization as "heads," "FTEs (Full Time Equivalents)," "warm bodies," or faceless "human resources" to be acquired and disposed of like assets on a balance sheet.

Leading successfully in tough times calls for openness, a willingness to outline the difficult situation clearly, and provide cost-reduction guidelines, as well as an ability to express our own pain. Leaders use all the methods at their disposal – including surveys, meetings, e-mail exchanges/polling, focus groups, town halls, and phone hotlines – to facilitate brainstorming, get input, set priorities, and make joint decisions and action plans.

Then they communicate, communicate – and communicate some more. Leaders know that it's almost impossible to tell people too much about what's going on and why. "Overcommunication" is rarely a source of poor morale and dissatisfaction. (Information overload, however, can be very demoralizing. A leader knows there's a huge difference between dumping information and truly communicating.)

Respectful partnering and participative leadership means that we don't act like cowards, making secret layoff decisions behind closed doors, hiding behind press releases, and getting external consultants or the HR department to do the dirty work of laying people off. Management can be tough, but leadership takes real courage. We can pay the price now or pay a much bigger price later.

Great leaders have long understood the empathetic importance of a heartfelt gesture, no matter how insignificant it might seem on the surface. On a rainy day in 1943 a battalion was lined up waiting for an inspection by Lord Mountbatten. The officers wore raincoats, but the troops had none. They were soaked. Mountbatten's car pulled up and he emerged wearing a raincoat. After taking a few steps, he turned around and went back to the car to shed his raincoat. He then turned to make the inspection. The troops cheered.

One of the greatest soldiers of all time knew how inspirational strong leadership could be in the most difficult of times. Alexander the Great was leading his forces across a scorching terrain. For 11 days they pressed on and the soldiers were weary, their throats parched. On the twelfth day, those in his advance guard brought Alexander a helmet containing a cup or two of water that they had been able to find. The troops watched with envy as the water was presented to him.

Alexander never hesitated. He dumped the water on the hot sand at his feet and said, "It's no use for one to drink when many thirst." His troops desperately needed water, but what he had in his helmet represented only a drop or two for each individual. He didn't have the quantity of water they needed, but he gave them something else – inspiration. They found water later, but at that moment he gave them something that was more important – leadership.