Good leadership is good leadership, regardless of the economic climate. However, during difficult times, top-notch leadership skills become even more important. Second-rate leaders might be able to keep a company going in a strong economy. However, you need high-performing leaders to succeed in tough times.
Of course, you need leaders who can control costs and conserve cash. However you also need leaders who see opportunity – and who will strive to seize that opportunity – despite all the negativity. You need leaders who remain committed to their people. And you need leaders who can transfer their positive outlook to the people and processes around them.
In an economic downturn, you need to conserve your resources so that you can survive. However, you also need to position yourself to benefit as competitors falter, and to be ready when the economy recovers. An economy in decline is often an opportunity to regroup, rethink, and renew. To take advantage of new opportunities, consider doing the following:
- Review your strategy – Figure out which objectives you’re meeting, which ones need more emphasis, and which ones you should reconsider or drop as the environment around you changes.
- Lead by example – Now, more than ever, you have to lead ‘from the front’ by setting an example. Take personal responsibility for customer care and contact. Actively help pursue new business. Show that you’re willing to make extra effort to commit to the organization’s success.
- Add value – One of the ways that leaders can gain greater market share and improve operations is by really listening to their customers. Look for innovative ways to add value without adding costs, and win customers who aren’t being well served by your competitors.
- Use market conditions to create a stronger business model for the future – If you’re a senior manager, consider looking for bargains, in terms of mergers and acquisitions, which will improve your company’s future competitive position. Whatever level you’re at, negotiate more favourable rates with suppliers, which you can continue to enjoy after the economy recovers.
- Take the opportunity to trim costs – Encourage cost-consciousness within your team or organization. Now is a great time to do this – everyone knows that times are tough, and people will be more willing than ever to cut unnecessary costs.
- Implement a continuous improvement plan – Look at your systems and processes to find efficiency opportunities. Lead the way in building a culture of continuous improvement, and don’t forget to continue development training for your staff so they can maximise their potential.
Negative messages are all too common during economic downturns. People are losing their jobs, unemployment rates are going up, and personal and corporate bankruptcies are increasing. This can weaken morale, both in the workplace and in society as a whole, and it can tip people into panic, severely damaging their productivity.
It doesn’t have to be that way. Don’t abandon your people. Use this time to reinforce how important they are, and build the skills they need to help the company survive.