There are several problems that today's CEOs know that they need to address--from winning the war for talent to keeping their employees engaged, to managing today's multigenerational workforce.

BY ROBERT H. ROSEN, Ph.D.

Their ability to cope with these issues and other leadership concerns today is critical to meeting a major goal of most CEOs: growing their businesses.
This raises another issue for CEOs: the ability to adapt and live with the anxiety that change causes.

During his tenure at PepsiCo, CEO Steve Reinemund made it his mission to "light the fire in every individual to grow as a person." He knew that "if learning isn't built person by person, there isn't anything there. Programs are interesting, but people make the difference." Under Steve's watch, company sales increased by more than $9 billion; net profits climbed more than 70 percent; earnings per share went up by about 80 percent; and the annual dividend doubled.

Steve Reinemund understands the value chain between individual and business growth. It's a straightforward formula: "Personal growth leads to professional growth, which leads to organizational growth, which in turn leads to financial growth."

THE MATTER OF ANXIETY

Growth creates anxiety. It's human nature to get upset when things must change and we must reinvent ourselves. We feel vulnerable and helpless. Many scientists and change experts say we're engineered biologically, socially, and psychologically to seek stability. We search for security. We long for predictability. These conditions, we've come to believe, are the signs that we have "arrived." We equate comfort with success.

Our evolution, though, proves that we are also engineered to grow and change. Today, more than ever before, growth--for individuals and organizations--is all about learning to live with anxiety. This is especially true now, with so many negative broadcasts and predictions about the economy.

Let's face it: anxiety is a fact of life. How we use it makes all the difference. If we let it overwhelm us, it turns to panic. If we deny or run from it, we become complacent. But if we use anxiety in a positive way, we can turn it into a powerful force in our lives. We can uncover the secret to growth and business success.

THE POSITIVE SIDE OF ANXIETY

The only way to achieve long-term organizational growth is to turn the anxiety that accompanies change into the positive, productive energy required to maximize performance. We need to create just enough anxiety (JEA) to cross the gaps between where we are and where we want to be. I'm basing this conclusion on five decades of life and my 30-year career as a psychologist, entrepreneur, and CEO adviser. It is grounded in the face-to-face meetings I've had with more than 250 top business leaders. In fact, my research has led me to three fundamental insights about growth and change:

1. It's time to embrace change, uncertainty, and anxiety as facts of life.
2. We can use our healthy anxiety as a positive force for growth.
3. Just enough anxiety is the key to living and leading in our complex world.

What is just enough anxiety? It is the right level of anxiety--at any given moment in time-- that drives us forward without causing us to resist, give up, or try to control what happens. It makes us want to do better. Just enough anxiety produces the optimal state of arousal that enables us to stretch beyond our current reality into our desired future. It unleashes our productive energy and allows us to close the gaps in our lives--between who we are and who we wish to be, and between where our organizations are and where we want them to be.

Leaders without just enough anxiety put their companies at risk. If they have too little anxiety, they run away from uncertainty and change, eventually becoming complacent and losing out to the competition. Their lack of anxiety gives people a false sense of security and fails to inspire continuous innovation. They simply stop growing. If they have too much anxiety, they are unable to manage change and uncertainty and soon become frozen in fear. Their excessive anxiety breeds chaos and confusion, lowers productivity, and destroys morale. It hijacks their growth.

Both too little and too much anxiety thwart growth and eventually lead to decline.
　

THREE KEY PARADOXES

Successful leaders--whom I call JEA leaders-- understand the dynamics of growth and change. They are at ease sitting with and talking about the anxiety that change produces, both in themselves and in others. They are able to assess where they are, where they want to go in the future, and how much anxiety is just enough to get there. They know that just enough anxiety lives in the gap between their current reality and their desired outcome, where leaders do their most important work. And they are astoundingly adept at living in paradox--displaying two seemingly contradictory qualities at the same time. In fact, it is their ability to master three key paradoxes--realistic optimism, constructive impatience, and confident humility--that enables them to create just enough anxiety throughout their organizations.

Realistic Optimism. Realism is all about seeking and speaking the truth--for yourself and others. Optimism is all about dreaming the future. When you combine the two, you are able to generate the energy you need to drive your organization forward.

Just ask Dennis Nally at PricewaterhouseCoopers (PwC). When the well-established audit and consulting firm was upended by changes in accounting standards, the anxiety throughout the organization was palpable. It was Dennis's job, as Senior Partner in the United States, to help people face the reality of the situation while painting a picture of the future that would inspire them to even greater heights.

Dennis faced the challenge head-on. "You can sit there and say, 'How am I ever going to deal with all this change? Can't we go back to the way things were five years ago?' Or you can embrace it all as opportunity. If you can get people to look at challenge as an opportunity, you can get much more positive energy around what you're trying to accomplish."

By focusing PwC's 2,200 partners on both challenges and possibilities, Dennis got everyone on board the same boat, headed in the same direction, and energized to reach the same goal. He led the partnership to the next level of growth.

Constructive Impatience. Being constructive is about creating a psychologically safe environment. Being impatient is about challenging the limits--pushing yourself and others to expand your capabilities beyond what you thought possible. It takes both to succeed.

Since taking the helm in 2003, Cadbury Schweppes CEO Todd Stitzer has led the 183-yearold confectionary maker--with brands like Dairy Milk and Trident--on an unprecedented growth drive. Under his leadership, Cadbury has undergone a $10 billion acquisition spree, ramped up profits, and outpaced Coca-Cola and Pepsi in market share growth in the U.S. soft drink market. It's now number one or two in 23 of the world's top 50 confection markets.

Todd's ultimate goal is to make Cadbury Schweppes the number-one confectionary in the world. And he knows that his ability to stretch people beyond their limits in a constructive way is the key to achieving his goal. By asking for the slightly impossible, he creates just enough anxiety to get people on board and move them forward.
"It's not about exploiting people's good will," says Todd. "It's about having motivated teams of people who can collaborate to be bigger, better, and more than ever before." And that's all about growth.

The ability to live and lead with just enough anxiety...enables you to travel into the unknown and to manage change and uncertainty. It helps you inspire and challenge people to stretch into their discomfort and perform beyond their expectations.

Confident Humility. Confidence and humility are polar opposites. It takes a great leader to master both--a leader like REI CEO Sally Jewell.

Since taking the reins of REI, founded in 1939 as the company of outdoor enthusiasts, Sally has brought the company back from the brink of disaster by building solid relationships with employees, customers, and the world at large. In her words: "We were a company in crisis and we didn't know it. So I started sharing the fundamental building blocks of the financial side of our business at town hall meetings. It was like a bucket of ice water on employees. They didn't realize that our performance had been declining on a number of key measures for several years. The company, on its present course, was not sustainable."

Fast forward to today and you'll find REI in a much different situation. It now operates more than 80 stores in 27 states, with more than 8,000 employees--and also has the largest outdoor store on the Internet. Company sales in 2005 surpassed $1 billion, with a one-year sales growth of 15 percent.

The ability to live and lead with just enough anxiety is the great differentiator. It enables you to travel into the unknown and to manage change and uncertainty. It helps you inspire and challenge people to stretch into their discomfort and perform beyond their expectations. It allows you to imagine possibilities and discover opportunities to expand your business. This translates into increased profitability and sustainable growth. For any executive seeking growth during today's era of uncertainty, just enough anxiety is the key.

Robert H. Rosen, Ph.D., is an internationally recognized psychologist, best-selling author, researcher, and business adviser to world-class companies. He is the founder and CEO of Healthy Companies International in Arlington, Virginia. His newly published book, Just Enough Anxiety (Portfolio, 2008) shows how you can use anxiety as a powerful force for change. For more information: www.justenoughanxiety.com or bob.rosen@healthycompanies.com