Illness, natural disaster, global conflict—when the economy takes a turn for the worse, the cause is often unpredictable and unavoidable. But as a leader, you’re tasked with guiding your company through ups and downs—even if those downs are crises that bring unprecedented circumstances.
Leading through crisis isn’t typically taught in business school, nor is it necessarily learned through experience. That’s why, when the market deteriorates, companies can quickly go into survival mode. High stress, high stakes situations can lead to quick decisions that have ripple effects throughout an organization. As a result, performance, motivation and results suffer.
What separates great leaders in the midst of a crisis? A purposeful leadership style, deliberate talent plan, thoughtful investment strategy, agile adaptation of processes and focus on effective change management.
Lead with Purpose and Empathy
Employees view leaders as venturesome, driving and undaunted. While these traits are important, uncertain conditions create anxiety that compels leaders to be empathetic and makes communication skills more important than ever.
While leaders should embrace uncertainty and act decisively in crises, the reasons behind decisions must be clear so employees don’t become confused, disillusioned and disengaged. As employees search for purpose amidst chaos, crises can create opportunities to clarify a company’s mission and values; communicating and connecting decisions to company values makes leaders seem purposeful, strategic and authentic. As a result, employees are more confident in their work and contribution to the organization’s success.
Plan Talent Strategically
Employees are a company’s most valuable asset—and the most expensive. This creates tension when every expense counts. But just as leaders must be purposeful in their leadership style during a crisis, they must also be deliberate in their talent strategy.
If an organization has to halt hiring or lay off employees during an economic downturn, leaders still need to plan for the other side. When conditions return to normal, who will fill the gaps to achieve goals? Knowing employees’ strengths and how they can stretch allows leaders to do more with fewer resources, so they’re not caught on their heels when the market rebounds.
Prioritize Spending Realistically
Economic downturns brought on by crises make leaders and consumers alike think twice about every dollar. That doesn’t mean leaders need to slash spending across the board; approaching reductions strategically causes fewer disruptions and less anxiety.
Leaders should look at every scenario and weigh their options. What are the revenue implications if a crisis lasts two months versus 18 months, and how will the company’s spending accommodate those possibilities? Which expenses can be put off—hiring, for instance—and which should be eliminated entirely, such as subscriptions for non-essential resources? Finally, do benefits and rewards need to be revisited?
Financial decisions in an economic downturn aren’t easy to make. But if they’re done strategically and communicated to employees early and honestly, leaders will emerge with their employees’ respect and trust intact.
Adapt Proactively and Quickly
Crises affect not just the way leaders approach spending, but also the way companies operate.
Longstanding processes may need to be revisited in the face of changing circumstances, and leaders who can confidently challenge the status quo and adapt with agility will be better equipped to ride out the storm.
As more companies shift to fully remote work, tailoring processes for seamless virtual collaboration is critical. But leaders are often left wondering whether participants are distracted by any number of things at home or online. Repurposing existing presentation materials isn’t enough; leaders should adapt materials to encourage engagement and participation in order to make the most of their meetings and maintain—or even increase—productivity.
Take a Walk in the Customer’s Shoes
Crises can upend normal processes not just for companies, but for customers as well. Leaders must be able to see through their customers’ eyes in order to really understand what’s driving purchasing decisions. What’s a nice-to-have versus a need-to-have? What are they willing to spend money on, and is there a threshold? Does the value justify the cost?
Leaders should communicate a value proposition that makes their offering indispensable. During a crisis, customers are more scrutinizing, so adapting the sales process and content to be empathetic to their mindset will pay dividends when they feel that a product is a necessity and worth investing in.
Engage Through Change
Organizational change in any economic environment is difficult. Add in the stress of a crisis situation, and the effects are amplified. When employees are preoccupied with change—why it happened, what it means for their futures—focus on work slips, engagement drops and productivity plummets. Leaders are left with an even steeper hill to climb.
But this doesn’t have to be the case. Leaders who keep a pulse on engagement and manage change effectively are more likely to succeed. In fact, studies have found that highly engaged teams are 21% more profitable than teams with low engagement. How do leaders cultivate engagement? It starts with understanding what’s on employees’ minds—what’s keeping them up at night and what do they need to focus on their job? Leaders who internalize and communicate frequently and transparently about these concerns will be seen as trustworthy in the face of uncertainty and change.
Additionally, leaders who provide a forum for employees to openly share feedback will elicit confidence and drive. A recent study found that employees were 4.6 times more likely to perform at their best when they felt like their voices were heard. When leaders need every ounce of productivity possible, lending an ear will pay off in spades and accelerate results when the crisis has passed.
Accelerate Digital Transformation
One of the hallmarks of a crisis is how it seizes routines and shatters them. Longstanding processes and approaches to daily activities are forever altered in an effort to avoid a repeat. For instance, after 9/11 airport security routines were drastically changed. Post-COVID-19, companies and schools must be ready for a new age of digital learning.
Leaders who ensure these new norms are embraced and operational throughout the entire company will be better prepared to navigate future crises, both big and small, without inflicting major disruptions to business or employees. Audit current processes to identify gaps and familiarize employees with new technologies to vet their effectiveness and accessibility. This type of adaptability and forethought will lead to more efficient crisis management and market resilience.
CoreAxis can help your team with Pandemic Training and Incident Management. Learn more about our Pandemic Training Solutions here.