Are we or aren’t we – headed towards recession, that is? Are we already in one? The debate is in full swing, with economists still examining the data. While we have had two quarters of declining growth, consumer confidence and the job market have remained strong. This juxtaposition has caused the confusion over exactly what is happening with our economy.
But one thing is for sure, economic change is coming, and a slowdown globally is occurring. As a leader, you need to be prepared. The labor market is already tight, and while a recession may mean layoffs and more availability of workers, keeping team members engaged and motivated can be challenging when times become uncertain.
Uncertainty, left unaddressed, breeds fear, and fear has a negative impact on your team, your goals, your customers, and your company. It directly, and not positively, shuts down innovation and creativity. These are the two strategies you need to overcome obstacles and move through change. It drives down engagement, the level to which your team is motivated, focused, and determined—making the team less productive at a time when you need them to be more productive. And all of that negatively impacts the bottom line.
So whatever the “experts” decide we are going through, one thing is for sure. Your ability to lead your team through uncertain times will directly impact your ability to serve your customers and grow your company.
3 Strategies To Lead Through An Economic Downturn
1. Focus Long-Term – a recession or downturn is a shift in the economy, and economic shifts impact decision-making. Yours, your customers, and your team. You need to focus on the long-term. Instead of focusing on the short-term balance sheet and goals, focus on what can keep your team and your company healthy as you move through the shift.
Back in 2008, wow, that seems like a million years ago, my husband (he is a dentist) had several patients who were in or worked closely with the real estate industry-one of the first industries to be hit and hit hard.
Now just because the economy shifted did not mean they did not need their teeth cleaned or a broken tooth fixed. But as you can imagine, money was an issue for these patients. They were scared. I must have heard my husband say a million times, “We are all in this together, let’s see how we can help you and keep the cost low.” In other words, his focus was on caring for these patients first and knowing that his company’s growth was not the priority right then.
Today, those patients are still with him, and spending a lot more money, given the housing market in the last few years. Not to mention referring new patients to him.
So, let go of short-term thinking and focus on moving through this. The great thing about economic downturns is it eventually turns into economic upturns.
2. Be Transparent – Be open, honest, and incredibly transparent with your team members. If your company is struggling to hit your numbers – share that with them. If the supply chain is messing up your ability to get product out the door, then tell them that. Tell them the good, the bad, and the ugly.
Uncertainty again breeds fear, and your team can handle negative information, what they can’t handle is the unknown. If you do not share any struggles you are having, they will fill in the blanks themselves. And believe me, any information they come up with on their own will be far worse than any information you could share.
3. Give Them Control – in other words, give them a voice, a say in how things are going. When uncertainty hits, the one thing that people want is the one thing they cannot have, and that is control. The closest thing you can give them is a voice and a say in how to solve problems and navigate change.
Your team actually wants to help you with the challenges you are facing, and you just need to let them do that. The result will be less stress for you and more of a feeling of control for them. So how? Lead through the power of the question. Every challenge or problem that you are dealing with, simply ask the team HOW to solve it.
When you ask people how, you simultaneously give them voice, responsibility, and a level of control. You engage them at a point that makes them as passionate as you are about your company’s success.
Anyone who has been in business for longer than 30 years knows that economic ups and downs are just part of growth and survival. They also know that the key to getting through these tough times lies in the ability of the leader. Strong leaders can get a team through even the toughest obstacles. So ask yourself, are you ready? Put these strategies into place, and you will not only lead your team effectively, you will turn all of this uncertainty into your greatest competitive advantage.
