As everybody talks feverishly about the world economy slipping into a recession and people draw numerous parallels between previous depressions and the current situation, I thought about putting down 5 broad management principles that we can adopt and do things differently this time around:
- In most downturns, managers typically tend to narrow their focus on operational efficiency and cost-optimization alone. A better way to manage will be to be “ambi-dexterous” and maintain focus on both topline and bottomline.
- In most cases, downturns have trigerred the tendency to source talent from low-cost talent pools with a view to minimize costs and at the same time ensuring ‘adequate’ staffing. Instead, organizations should be looking at tapping diverse talent pools to build up a diverse work-force which ideates using different perspectives. This enriches the problem-solving processes with alternative thinking. Some cues can be found in the Creative Class.
- Most downturns are accompanied with a free-fall of the “axe” or downsizing. Instead, forward-looking leaders need to focus their existing people assets on most “high-yield” activities and maximize gains.
- Economic slowdowns tend to create a general environment of gloom and employee morale takes a big hit. It is critical to keep employees motivated and engaged during these trying times. And, who is better placed to drive engagement than the “people managers”. From “employee engagement” being a HR responsibility, leaders need to ask their managers to be accountable for employee engagement.
- Finally, like most situations in life, we tend to take a short term view in times of a slowdown. From a short-term focus on protecting margins and pleasing the stock markets as much as possible, leaders and managers need to take a long term view towards balanced and sustainable growth. We need to remember that equity, as an asset class, has a tendency to trend upwards. So, we just need to be doing the right things and in due time, value will be realized.
Also read this interview with Mark Mactas, CEO of Towers Perrin on “Leadership in Turbulent Times.”