It's been a long time coming, but the recession that has hit us will no doubt leave a similar legacy to those that hit us in the early 80s and early 90s; companies will rein in their spending, take their businesses back to basics and hope they're lean and mean enough to weather the storm. But does it have to be that way?
Clearly, if credit is in short supply and demand drops off then costs and headcount will always come under pressure, but with interest rates at a record low and prices falling by the day there are many opportunities for on-the-ball, innovative companies to not only ride out the storm but to positively benefit from it.
But besides effective cost management what is it, exactly, that successful leaders do differently to ensure their organisations develop and grow in turbulent times?
Communicate! Communicate! Communicate!
Communication is a staple of any Company Values statement, but in times of recession there's a danger that senior and middle managers retreat within the walls of hushed conversations and ambiguous rhetoric when discussing 'the problem'. It's a tricky business, of course, maintaining the right balance between telling people what you know, or think you know, and being so upfront that you put the fear of God into them before anyone really has a grasp of what's going on.
The problem with this mode of thought, though, is that it assumes management has all the answers, that they have to be telling staff something, when in fact they need to be spending at least as much time listening to them and having conversations with them as they do in telling them anything. It's not just employees that should be in on this conversation, either - customers and suppliers need to be in the loop, too. When times are tough, successful leaders double their efforts to talk with people, listen to people, chew the fat, see how everyone's feeling, learn where the hot spots are, where the bottlenecks are, tap into the resourcefulness of the very people they hired to do the job.
Build Trust
A remarkable thing happens when you engage people in conversation and really listen to them – the level of trust between you goes through the roof. And in a recession, trust is the one sure casualty that companies can't afford to lose. As Alan Webber, former editor of Harvard Business Review, puts it: “The most important work in the new economy is creating conversation....and in the end, conversation comes down to authenticity, integrity, trust.”
Trust is the lubricant that oils the wheels of co-operation, teamwork and commonality of purpose, and it's this element of collaboration that is vitally important if companies are to be ready and able to turn threats into opportunities and opportunities into profits.
Involve your Employees
When times are tough it's tempting for managers to become more directive, to lead from the front, if you like, but as a means of engaging an intelligent, well-trained and motivated workforce it takes a poor second place to more democratic and collaborative forms of leadership. The trick in managing at any time, and especially in a recession, is to tap into the huge well of skill, knowledge and energy that exists in any company and turn it all in the direction of achieving the outcomes the business wants. This can be achieved most successfully if companies create a culture of co-operation and goodwill, where people willingly and autonomously exchange ideas and resources and – even more importantly – use their considerable knowledge of the jobs they do to leverage these things to the best of their ability. In this way, any company can benefit from the efficient execution of day-to-day business while at the same time tapping into employee ideas for cost cutting and efficiency improvements.
The job of senior managers, meanwhile, is to scan the road ahead, keep an eye on how things are developing and be ready to move at a moment's notice to deal with whatever the recession throws up. The united and collaborative organisation will always move faster and more surely than the divisive and internally competitive organisation, and this will be a major factor in determining how companies fare over the course of the current recession.
So what is it, exactly, that successful leaders do differently to ensure their organisations develop and grow in turbulent times? Nothing at all, it seems - they just do more of what they did in the first place, only they do it faster.
Read 'Why Invest in Teamworking' and 'How does YOUR Leadership Measure Up?'
