03/30/2012 01:27 pm ET Updated May 30, 2012

About Leadership: Pressure and Its Consequences

When I became Chairman of AEA Technology, we were probably less than three months away from losing the Company. Debt was moving beyond our limits with the bank, we had issued two profit warnings in the space of three weeks, we were overstaffed, the person who was Chairman and CEO had left and the two posts split, and all of this left our employees with a lot of uncertainty about their futures. This in a business that was all about selling the skills of our employees to solve difficult problems for others.

In this situation, what was the first thing that I said to the new CEO and the Finance Director? It was this: Yes we are in trouble, yes we have to take some radical actions to get out of trouble, but no matter what, no matter how difficult things become, you are never to act in any way that is unethical. We don't cheat; we don't lie to each other, to the board, to our investors. Indeed, because we are in trouble we are as strict on our ethical behavior as possible. As a company, and for the three of us as individuals, never try to push the boundaries of what is ethical. If you are a leader, you will know that you have to put people under pressure, sometimes under extreme pressure, to perform. We achieve great things because of that pressure, because we don't approach our jobs casually but with great intensity. But we need to be alert to the possibility that the pressure will cause people to do things that they know are wrong, just because it is the only way they can see to satisfy the boss.

Some years ago, when I headed the Products Division in BP Oil, we were developing a new lubricant product, a project that was high profile and late. It was late because any new lubricant, before it goes to market, must pass a large number of tests, and these are difficult when the product is meeting the highest standards with some new attributes. We had failed a few of these tests first time through. My colleague Tony Roxburgh, as Director of Marketing, knew the sort of pressure the team was under, and he himself was under pressure from our business units to get the product out. In this situation, he had the courage and insight to ask me to form a small independent group to review all the test results, and only when that group was satisfied would he release the product for sale. Because while getting the product to market was a big deal for the team and for him, he realized that there was a bigger deal at stake, the reputation of the Company for integrity in its offer.

While leaders have a right, even an obligation, to exert pressure to perform, they have to think about the consequences of that pressure for the people involved. One of those consequences is the possibility that people will do something that they themselves know is not right, because we have left them no way out. Checks on this happening are, in effect, providing them with a way out, and clear thinking leadership will see that such checks are in place. There is another consequence of pressure that requires alertness and sensitivity from leadership. The physical and mental health of the team members. Of course we should always be watching this, but when the team is under pressure, perhaps struggling to achieve objectives, I am especially looking for unexplained absences, explosions of temper, team members going off on their own away from colleagues, changes in dress or physical appearance, anything signalling a person not coping physically or mentally. It is useful for a team leader to know if any team members have a history of problems under pressure, but this is not usually something that is shared with the leader by HR or by individuals themselves. Remember also that problems at home can become aggravated in pressure situations at work.

Putting pressure on the team is a tool for leaders to use in order to achieve extraordinary performance. We learn that setting expectations beyond what people believe is possible can lead to great achievements. None of what I have said by way of caution is meant to deter you from using this tool but as with any tool it must be done with attention to safety.

About Leadership: About Leadership is a series of 52 columns on corporate leadership -- essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?