Overcoming Economic Uncertainty
There’s a whole lotta hedging going on right now. Is it a recession? A different version of a recession? Will there be a recession? Are we in one now? The pundits can’t agree and so uncertainty prevails.
When preparing for economic uncertainty most leaders fall back into defensive mode and the traditional practices of cut and protect. They cut people, operating costs, CAPEX, R&D and CSR programs to protect cash and the company. Seems like the right thing to do and bankers are happy. In the short term. But it does raise a couple of problems.
Traditional practices like this worked successfully in years past, but we are in a new world of work now. The markets are different, the economic environment is different and our working relationships with talent and customers are different. Cut and protect just isn’t as effective in this different world we work in now. Which lead us to problem number two.
Cut and protect practices cut into the company’s resilience, responsiveness and relevance; three critical factors needed to navigate this age of disruptive change. Here’s why; resilience, responsiveness and relevance make the company’s brand and products meaningfully different, the company incomparable to competition and the first choice for talent and customers. Companies without these advantages must throw out the cut and protect anchor instead, leaving themselves unprotected and unprepared for the return of economic certainty.
Instead take a balanced approach to not only overcome economic uncertainty but find growth opportunities within it.
Conserve don’t cut talent.
Strengthen your company’s resilience by retaining and if necessary, redefining work relationships to protect expertise, intellectual capital and capacity for innovation.
Optimize don’t reduce resources.
Boost responsiveness to change by optimizing company processes and R&D to changes in needs and behaviours for future growth opportunities.
Bolster don’t abandon your unique advantages.
Double down on company Purpose, customer Promise, CSR programs and meaningful work for employees to improve retention, loyalty and engagement and become the first choice for talent and customers.
The result will be that your company will sail through economic uncertainty and work, make and sell better for best-ever results. Prepare for whatever lies ahead with a balanced approach to planning and operating that puts your talent and customers first. And yes, your bankers will thank you too.