Whether the numbers support it or not, the UK economy feels as if it is in recession and that’s a serious concern for many businesses. The critical challenges a recession throws up are typically sluggish cashflow, fewer sales as customers prioritise what they spend their money on and the subsequent anxiety for both business leaders and staff who are concerned about job security.
These are the visible signs, but are usually only the symptoms of the real issues that exist in the business. The most frequent issues I’ve seen are the lack of a coherent and shared plan for success, poor communication and an over-heavy cost base.
Addressing the symptoms on a superficial level won’t cure the problem. To survive well in a recession the business needs:
- A clear vision of success for the business. Making sure everyone in the business understands what success looks like and how they contribute to delivering it.
- To continuously prioritise activities within the business. Investing only in those that will deliver the long term vision of success. Rigorously and continuously manage the fixed cost base.
- To develop a culture of innovation and agility, engage the entire team and invite them to be fully accountable for their area of responsibility. Drive decision making downwards.
The buck stops here
When you’re the business leader or owner and the market gets really tough, it’s time to stay calm and plan. Give yourself permission to step out of the business operation for a short while. Take a step back and recognise that the period of difficulty will pass – as long as you respond to it intelligently you and your business can emerge from it stronger and fitter than you went into it.
Define the key issues that the business is facing. Prioritise ruthlessly your approach to addressing each of these issues. Develop a 100 day action plan that forces decisive action – quickly. Turn anxiety into concentrated activity by leading a WAR (weekly action review) session where progress is rigorously measured and blocks are removed. Get everyone on board by celebrating positive results. Identify your key contributors and encourage them. Tough times don’t allow for passengers so address areas and individuals where contribution is poor. Being seen to take positive and inclusive action will inspire the team.
Look for positive examples outside your business. Talk to other leaders and learn from their experience. If you can, get the support of a mentor who has experience of leading teams and businesses through difficulty. At the very least know where to go for help. Professional bodies such as the CBI and the Local Enterprise Partnership scheme offer support lines and advice.
For more extensive support consider engaging a board advisor, non-executive director or consultant to provide practical experience and coaching. There is a range of commercial organisations and local business clubs where senior executives can share and discuss issues and challenges.
I have led so many transformations and business turn arounds that I’m politely known as ‘the business fixer’. We turned Porsche GB around, taking the business from last place to first place for customer satisfaction in the UK market, in the depths of a recession with no cash available. Since then, I have led eight turnarounds and grown fifteen companies so I know that a structured process and inclusive approach will work.
To achieve positive results in a negative environment I follow an approach that I have developed over a number of years. I describe it as the three Cs.
- Commit – fully to a vision of success which is clear and understood by everyone in the business.
- Connect – the team with the vision of success by the development of a simple plan which allows everyone to see where they make a difference to achieving the goal.
- Create – a culture of ownership. Delegate authority. Move quickly. Communicate openly and frequently. Celebrate success.
My book Inspired Leadership provides more of the tools and techniques but these are the cornerstones of success – and they work even in a recession. They’ve inspired the teams that I have worked with to achieve extraordinary results and build world class businesses, even in very difficult circumstances.