“…Exciting as it is to be living through historic economic drama, you can’t just stand by and watch. You have to act–yet you have no script. So much of today’s turmoil is unprecedented that we can’t find much guidance by looking to the past. For managers across the global economy, as well as for Team Obama on its way to Washington, today’s great question is, What do we do now?”
Geoff Colvin “How to Manage Your Business in a Recession” Fortune magazine January 19, 2009
New Zealand may be initially sheltered to some extent from the global recession but 2009 will still be a year of tight budgets in the public and private sectors. Despite optimism in some official circles and the recent efforts of the G20 nations, the recession won’t be over by Christmas. Global economic cooling could still brew the perfect storm.
The global downturn is already taking its toll on management and workers with lowered morale and job uncertainty. Internationally, public trust in big business, particularly in the finance sector, is at a low ebb. A recent survey by the UK Chartered Management Institute found one in five managers worried about job security while half its survey sample of 1100 found work had become more stressful because of tightened economic conditions. With a third reporting a freeze on new recruitments, there was a stronger focus on developing the skills of key internal staff and 80% argued that improving management and leadership skills would help them survive the recession.
Closer to home, a March 2009 Auckland Chamber of Commerce survey, which found that businesses are preparing themselves for a medium period of little to no growth. The survey received 1450 responses, 74% of which expected their own situation to stay the same or improve. Looking at the general business environment over the next six months, the pessimists outnumber the optimists with 47% expecting the situation will stay the same or improve and 53% anticipating it will deteriorate.
Positive affirmations are important, but not enough. We need to strike a realistic, albeit cautiously optimistic, balance between the world views of Chicken Little and Pollyanna.
Through a combination of agile strategic thinking and focused teams, some organisations have the opportunity to do well in tough times and leave their competitors trailing.
This is the time for acting on the feeling that we are all in this together: if your end of the boat sinks so does mine. This is also the time for business leaders to lead by engaging the commitment and the energies of their people to make the changes which will make a difference in challenging times.
Knee jerk reactions like cutting staff, cutting marketing or cutting training are understandable, but may be literally counterproductive.
A new business strategy for uncertain times won’t work unless organisations develop the people strategy to make it happen. The keys to surviving and thriving are what your people know and do and how well they collaborate.
If business organisations are really going to keep up in the downturn the people who work for them need more than corporate Viagra to see them through.