Many businesses weren’t expecting the cloud of economic uncertainty to return so quickly after the GFC, and it’s still a raw memory for most – yet the cloud is back and as many learned in 2008, it pays to have a plan.
Recruitment agency Kelly Executive is one firm with a strategy for the economic downturn, and general manager Sally Charles said now is not the time to go into ‘survival mode’, but to develop new and creative action plans instead.
“In the current economic climate, the first action of many leaders is to ‘bunker down’. This approach seldom generates exciting and positive results,” she said.
Instead, Charles suggests that smart employers will be focusing on growing their business and using this opportunity to take business away from their competitors who have chosen a more defensive approach.
“Outside the box thinking and high creativity are key factors for generating success in times of uncertainty, and it’s important to remember resources often already exist within the business particularly in the form of people,” Charles added.
The NSW government has put together a toolkit for businesses which offers managerial advice and guidance to employers, and provided the following key tips.
Maintain effective communication
While unpredictable business conditions may make it difficult for you to provide your people with certainty, you can at least provide them with open and honest information that will allow them to understand the real situation and make any decisions they need to about their future.
Providing an open and honest appraisal of the business situation to staff also helps to stop speculation or rumours about the businesses performance which can be damaging and often unnecessarily concerning for employees.
Articulate a clear direction
Planning should provide a vision of where you want to be after the downturn, so that decisions made during the slow-down give consideration to both the short term and the long term.
In reality, a changing and unpredictable environment is inherently difficult to plan for. In these conditions, many businesses use contingency or scenario planning techniques. Most simply, this involves undertaking "what-if" exercises to consider how the organisation might be affected in a range of alternative situations, and developing plans to address such an eventuality.
A key part of an effective planning process is undertaking regular reviews and meetings. This keeps plans relevant and helps communicate the plan throughout the organisation, so that everyone is better able to work in a common direction.
Management focus during uncertainty
One certainty of any recession is that growth will eventually re-emerge and positive market conditions will return, possibly sooner than expected. Understanding the drivers of long term success for your business is critical to the decisions you make during a recession.
Consider as an example the benefits of retaining staff. If you can find a way to retain your skilled employees during a downturn by arranging reduced working hours or re-deploying staff, it can be far cheaper than having to re-employ and train new people once conditions improve.
Tools and strategies
Joining a professional or business association or participating in activities organised by relevant industry bodies are commonly used to network with other business owners and managers, and learn from their experiences.
Some businesses have successfully taken the step of setting up an external advisory board consisting of experienced and respected experts from different fields. An advisory board may be used by a business owner to discuss and seek new approaches to solving specific business issues.