Resources

Managing Uncertainty in an Economic Downturn

Our economy is proof-positive that history repeats itself. Over the course of every decade or so, the economy seems to slump, recover and boom. As we await the up-swing, leaders and managers must tend to themselves and employees to ensure that fear, turnover, "survivor’s syndrome," lack of hope and sinking morale don’t sabotage performance or damage the company culture, and thus, the company’s prospects for turning the corner of this latest downturn. Both leaders and employees (and leaders are employees in many companies) can take steps to encourage positive mindset management and peak performance during this current cycle when the economy is listless.

What Leaders Can Do

Skillful leaders will stay abreast of their reading about the economy and tuned in to the organization’s strategy and status. They’ll also honestly and effectively communicate economic realities and the resulting company strategy, as well as a vision for how the company and its people can emerge stronger when the economy begins to lift. As a leader, you can rejuvenate yourself and shore up your positive thinking by:

Focusing on your vision: Fear-based decisions, such as slashing every expense to the bare bone, can immediately redirect your organization’s course, in addition to instilling fear in stakeholders (employees, investors, etc.). If these constituencies joined your company because of its vision, they’ll most likely stay because you maintained it, even through the tough times. On a personal level, the organization’s vision is a manifestation of who you are and how you want to operate. Use it as a source of inspiration and a touchstone that grounds you when you’re feeling unsettled and unsure of what to do next.

Using tension as creative fuel: Stress is an inevitable outcropping of economic downturns. However, stress is also the foreshadowing of innovative breakthroughs and tremendous ideas. Channel any tension you might be experiencing into brainstorming sessions or solution-based thinking. These activities and their resulting action also help reduce stress. Start with the question, "If we don’t want this, then what do we want?"

Spending "found time" on new adventures: Slower business cycles allow you to attend to the ideas, professional development, and business-maintenance that you always wished you had time for. Use this time to reconnect with your vision, to develop specific areas of your business, to improve on what you’re already doing well, etc. Build these activities into your weekly rhythm, ensuring that they remain when your enterprise is flush with business again. Why? They are the cornerstones of a fulfilled leader and a successful business.

Revisiting successful approaches from the past: This is most likely not the first downturn that you’ve experienced. Reflect on the approaches that have worked well in the past, and that suit your vision, to earn new business. This thought-technique also strengthens your self-confidence, allowing you to see that you’ve successfully weathered storms in the past, and will again.

Help Employees to Help You

Leaders cannot and should not try to steer the ship solo. Employees are the people who help put your vision and strategy into action. Your positive, productive mindset will go only so far without the employee complement. To help employees manage the uncertainty of an economic downturn, try these tips:

Communicate consistently & honestly: Without straightforward, ongoing communication about the company direction and next steps, employees will fill the information void with fear-based projections. Understand that every business has a grapevine of communication, and if you don’t feed it, someone else will. Your honesty will help to engender confidence with employees, which can increase loyalty and quell uncertainty.

Ensure employees reconnect with the vision: Employees are invested in your vision, too. Give them the opportunity to reconnect with the vision as a group, refuel with its message and recalibrate their actions to its purpose. You’ll have a team of aligned people focused on the same positive goal, and a heightened awareness of what the group is doing and why.

Encourage employees to explore the possibilities: Unleash all creative juices and brainstorm with employees how you can make your vision a reality. Don’t just "think outside the box"--throw the box away altogether. Fresh ideas, stretched minds and energetic interactions can lead to higher morale, cohered teams, a keen focus on what’s most important, and a clearer picture of desired opportunities (allowing you to better recognize them when they appear).

What Employees Can Do

A sense of purpose and action that demonstrates self-responsibility are valuable traits to any business owner or leader. During tough times, these traits can be priceless. Employees who pitch in to help weather rough seas not only increase the likelihood of success, but also help the leader stay focused on the vision rather than worrying about the details. Employees can:

Have--and demonstrate--individual responsibility: As an employee, it’s in your interest to do what you can to help keep the company healthy in every way (unless you want to be searching for a new job). "Earn your keep" (and paycheck) by offering ideas and support that benefit the business. Don’t take your position and compensation for granted. Look for ways to expand the gifts that you contribute, and the ways that you contribute your gifts. Don’t wait for or expect someone to tell you what to do. Assess the business and your role in it from a whole-systems view (not only from your standpoint), allowing you to see more clearly what’s happening, what’s needed, and how you can help. If you have questions about how else you might enhance the performance and strength of the company, ask. Consider why you are part of the organization, and ensure that your actions fulfill those expectations.

At the very least, have respect for the fact that, in a tough economy, there are people who lay awake at night thinking of new ways to ensure that you receive your next paycheck and are able to stay happily employed with the company without worry. These same people will appreciate your efforts to bolster the ship! (And if they don’t, shame on them. Still, you’ll have the satisfaction that only proactive, self-empowered action can bring!)

Proactively support marketing: Provide unsolicited suggestions for the organization to reach out to appropriate contacts, refresh relationships with colleagues and prospects, and "cast the net" wider. Creative or alternative thinking can help invigorate an outreach effort and open the door to more fruitful opportunities.

Look for ways to eliminate unnecessary expenses: Are you sending a glut of express-delivery mail when proper planning or e-mail could eliminate this costly expense? Do you receive publications that you don’t read, or have memberships or attend meetings that don’t expand your job-related abilities? Do you charge your employer for memberships, meetings, or meals that are more social or personal networking oriented than they are valuable to your company? There are many common activities and expenses that add up to big bucks over the course of the year. Scan your environment for potential fund-leaks, and recommend ways to plug them up. Don’t be stingy, just wise, and remember that saving the company from unnecessary expenditures ultimately benefits you.

Recalibrate activities to concentrate on key priorities: Lean or uncertain economic cycles might require a change of course, ensuring that the company’s or department’s resources are channeled in the most appropriate and effective manner. Plan your days and weeks according to the organization’s most important and strength-enhancing priorities.

Make mindful decisions: While one hopes he or she is always doing this (not just in an uncertain economic environment), ensure that every decision you make is closely tied to the organization’s vision and goals. You should be able to answer "yes" definitively to the question, "Will this help us achieve our goals?" Do not run through the paces of the day, simply checking tasks off of your list. If you’re unclear of the priorities and goals, ask.

Staffing for Uncertainty

Will it be a boom year or bust? Will your new project take off or be indefinitely grounded? All businesses, in every economic climate, must deal with uncertainty. Often, the biggest challenge is determining how to "staff up" for the work at the least cost and with lowest risk.

Consider this game plan:

  1. Forecast your best case and worst case scenarios (for the company, business unit, or project).
  2. Determine the staffing levels (by job title and number of employees) under each circumstance.
  3. Evaluate likely employee attrition.
  4. Calculate the gap (or excess) in employment for each scenario.
  5. Develop an appropriate staffing strategy for fulfilling the gap, which may include:
    • Hiring full-time employees

    • Hiring part-time employees

    • Training current staff

    • Using temporary and project staff to extend resources or provide specific expertise

    • Retaining consultants to provide specialized expertise

    • Outsourcing non-critical tasks

    • Re-deploying current staff (and back filling with temporaries as needed)

The most sophisticated organizations plan their permanent staffing at the level needed to maintain their minimum goals. Rapid response plans are then developed (often in partnership with trusted staffing vendors) for adding supplemental personnel as required to meet peak work volumes and special projects.

These organizations also proactively recruit for both anticipated and unexpected hiring needs. They may run their own ads or work with a staffing service to develop a constant flow of new candidates. Even when no positions are open, this proactive recruiting allows the employer to constantly seek the best and brightest people in the market, so they will know who to call when the need does arise.