If you navigate through a recession strategically, your business has the opportunity to rise well above your competitors. To do so, leaders have to manage the current chaos while pivoting their teams to succeed in a post-crisis socioeconomic environment.
Most leaders are fully capable of doing this; the challenge is figuring out how to get started. As a result, research from three global recessions found that 17% of companies don’t survive, and only 9% experience significant growth within three years.
To help you set yourself on a productive path forward, we’ve mapped out the six actions you need to take to help your business thrive during a recession.
1) Develop a Unified Internal Communications Strategy
One of the most stressful parts of a crisis is that information changes so quickly. If the emergency is sudden, people will initially struggle to fully grasp what happened and all the ways that it’s going to affect their lives.
However, once the shock wears off, your team will have serious questions about how the crisis will affect your business. If you don’t have a unified communication strategy in place, rumors are going to fly, and getting your team to focus will be much harder.
To get ahead of your employees’ concerns, assign a top executive, ideally the CEO, to give frequent and candid updates that cover:
- How your company is affected. Most people will be less anxious if they understand what’s going on than if they’re left to imagine their own scenarios.
- What high-level actions each department is taking to address the challenges they’re facing.
- Messages of support for the personal challenges that people are likely experiencing.
Additionally, your frontline managers should have Q&As with your team and explain the specific changes to their team. Ensuring that everyone is on the same page will help your organization remain productive through the volatile period.
2) Make Your Offering Essential, or At Least Affordable
As soon as your customers start cutting spending, you need to ask yourself if what you’re selling essential. If yes, you’re probably doing fine right now. However, if it’s not, you need to either:
- Tailor your offering to address a problem your prospects are currently facing
- Offer steep discounts to help customers who still want your offering
Often just shifting your marketing messages to reflect relevant ways that people can leverage your offering will help you retain some sales for the time being. If you don’t take one or both of these steps, your prospects will struggle to justify purchasing your offering.
Though you’ll likely have to lower your margins, you’ll sustain a stronger market position and endure fewer losses if you maintain a happy customer base.
3) Look for Every Opportunity to Maximize Efficiency
When your business is growing fast, it’s easy to push forward with lots of new systems and processes without pausing to evaluate their effectiveness. Slowdowns create an ideal environment to improve efficiency across your organization.
According to West Monroe Partners, companies that come out ahead post-recession focus on maximizing productivity in three areas:
- Processes and automation. Think of all the tedious tasks your team does and find ways to eliminate them or significantly reduce the time required.
- Work design. Think about your team structures, systems, and operating models and identify ways to eliminate ineffective resources and improve inefficiencies.
- Employee capabilities. What skills does your team need to perform better than your competitors? Even if you don’t have room in your budget for additional training, you can help them build the skills by working on experimental projects.
Reducing inefficiencies across your organization will improve your employees’ resilience and help you make strategic cost reductions.
4) Think Strategically About Who Your Essential Staff Are
Every good business leader will make layoffs a last resort; however, sometimes, it’s unavoidable. If you reach this point, you need to think carefully about who you let go since it will have dramatic implications on your company’s ability to recover.
Experts have found that simple layoff strategies such as last in, first out, and rank and yank cause a variety of extra barriers to recovery, including falling behind due to lack of innovation during the downturn, increased difficulty securing top talent, and lower employee morale.
Instead, you need to identify and retain your essential staff by asking yourself:
- Which employees are going to be hardest to replace due to their specialized skills
- What teams can help set your company up for a successful recover
Figuring out who your essential employees are will help you make as fewest cuts as possible and to areas that have minimal impact on your business’s long-term success.
5) Plan Your Longer-Term Pivots
Once you’ve stabilized your company as best as possible, you have to have candid conversations with your team to determine if your current offerings and business model will continue to thrive in a post-crisis world.
Every market and buyer persona is affected differently by crises. You need to map out the changes in your industry so you can develop a clear picture of what you need to do to succeed in the long-run.
Planning your pivots during the early stages of a crisis gives you time to develop a comprehensive strategy that is ready to launch as soon as the recovery begins.
6) Rally Your Team Around a Goal
Crises are often debilitating because not only are employees worried about the negative events that have happened, but they also become scared since they don’t know the best ways to move forward. One of the easiest ways to motivate your team during a crisis is giving back their sense of control.
To do that, you need to rally them around an ambitious, but achievable, goal that has positive implications for them. Ideally, some of your teams will be assigned short-term goals around improving efficiency and taking other actions to improve your company’s current position. Some of them will be assigned projects related to your long-term pivot strategies.
Let them know that if they achieve the goals assigned to them, they’ll reap specific benefits that they can look forward to. Keeping your team focused on the future ensures that they stay motivated to build your company instead of feeling defeated by all of the negative news around them.