It doesn't take a financial analyst to realize that the economy has gone south. Starting with the dot.com bubble bursting and continuing with financial markets drying up, the economy is in a dark hour. The events of September 11 exacerbated what was already happening in the markets and overall economy.

Say you're a CEO and are beginning to feel the pressure. Sales have turned down. Or, as an entrepreneur, you can't get any traction with the moneymen. Your employees are braced for job cuts and productivity seems to be declining. Everyone is walking around the office with long faces-a natural human condition during these troubled times.

Just think -- it could be worse!

In the leadership class I teach at Brandeis University, a number of the students question why we are even studying leadership at this time. They believe that the leaders of today's organizations have the upper hand since employees can't readily move to another employer. The students surmise that the leaders, in the confines of their offices, say "So why do I have to be nice to our employees"? The students, or at least some of them, think that today's leaders - given the current economic state - can disregard employee human emotion and "demand" improved productivity. Nothing is further from the truth!

Excellent CEOs will think more broadly of their employee base by recommitting to a transformational leadership perspective at this time. They will raise the consciousness of their followers to a higher level by appealing to ideals - asking them to think of the larger organization as opposed to their own self-interests. Transformational leaders have a huge impact on their followers; followers feel immense trust, admiration, loyalty, and respect toward their leader. This is not about exchanging money or options for services, otherwise known as transactional leadership. After all, the last time I read the high and low range of the stock listings most of these options were under water.

Now is when transformational leaders need to motivate employees to feel good about themselves and the vision of their enterprise. This may be easier said then done. But just like raising capital or achieving sales targets, it's our job to figure out how to accomplish the objective.

Looking toward the advanced levels of Maslow's Hierarchy of Needs, "feeling good" is about belonging, self-esteem, and self-actualization. If we can help our workforce feel part of a corporate community and help them master their jobs, their motivation will increase substantially.

Two weeks ago, I wrote about a small company that had to shut its doors due to lack of funding. Since then, I've been surprised by the genuine interest of many of the former employees to stay connected. In this case, they are doing it through a Yahoo Groups e-mail community. Even though these individuals do not have jobs, they are still highly motivated to help each other through this difficult period.

In this time of downturn, employees who are able to master new skills and make improvements in work processes will increase their self-esteem and productivity. Now and in the future, they will serve the company or organization well, especially when the economy turns around - which it will! All of us like to feel pride in what we are doing and many of us are perfectionists. A healthy self-esteem is a great medicine during these difficult economic times.

As leaders, our job is to bring the best out in people and we can do this in a variety of ways. I encourage you to seek opportunities that help employees build community while increasing their skill level. This is transformational leadership, and as a leader, you will be highly respected by your followers for this approach. Money is important but far more important is recognizing that the human condition starves for a pat on the back, acceptance, and feeling good about their meaningful contribution.

Now ask yourself... Am I a Leader?