Business Opportunities Weblog

February 18, 2009 by Dane Carlson | 6 Comments

photo credit: Damon | Photography

The following is a guest post is by Allen Smith.

I recently met with a number of people across the United States. What I heard was quite frightening. Apparently the current economic downturn in some places is being referred to as “turning off the light switch”. Quite a stark and frightening comment to say the least!

Yet, day after day, throughout the world, the economy is now being compared to the “dirty thirties” or the “big depression”. In terms of employment that meant many business closures, family farm abandonment, and job seekers “riding the rails” across the country looking for work. In other words, this is the most challenging time most people today have ever experienced. Just the thought sends panic through people’s minds.

What does this mean for leadership in your company? First of all, an economic downturn has multiple impacts on your business; suddenly, the little things you may have neglected will now become big things. In fact, everything will seem blown out of proportion. The challenge ahead is to keep employee productivity, corporate performance and growth on track in spite of difficult times. Therefore, leaders must be vigilant in applying a positive, win/win leadership style and provide an even stronger focus on the basics of the business. What exactly does this mean?

First of all, leaders need to recognize and accept that fear really does exist within the hearts and minds of their employees. When they see their relatives, friends, neighbors and even adult children and spouses lose their jobs, they too are deeply affected. In many cases, because the economic downturn has happened so quickly, many are not prepared and are facing extremely difficult financial times.

As you can expect, employees experiencing stress are particularly challenged to concentrate on work in times like this. The result is often a decline in productivity, increased employee absenteeism due to stress and illness, plus an increase in accidents both at home and at work. It is then important that leaders demonstrate they care, understand and empathize with their employees’ turmoil. It is crucial to build in extra supports for emotional counseling if this service is not available through your employee assistance plan. Maintain as much consistency as possible by sticking to established routines and avoid changing any policies and practices.

At the same time, leaders under pressure are also experiencing personal turmoil and may even slip into panic mode. As a result, many leaders revert to a leadership style that relies more on basic instincts and natural style rather than applying the skills they’ve learned through training such as Results Centered Leadership. Instead, they often retreat to their office, close the door and forget that in challenging times trust and open communication is needed more than ever.

As a leader, you have the responsibility to keep your organization going in the right direction. The following tips will help you stay practical and focused on the basics of your business:

• Business survival requires strength – this is the time to build on the strengths of your business. Focus on confirming your value proposition, staying connected with customers and managing your financials closely. Keep in mind, only the strong will survive.
• Rally employees to the cause – drive home the fact that greater efficiency, effectiveness and employee productivity is key to everyone’s success. Reinforce your vision and goals. Get employees enthused about your strategic direction. Involve them in problem solving and decision making. Ask them for ideas and solutions…..participative management is a great way to rally the troops.
• Focus on customer needs – use this opportunity to stay in close touch with customers. What changes are occurring for them and how can you help? This might lead to new products or service development.
• Go the extra mile – it is tough times for everyone. Determine how your organization can go the extra mile for your customers. Keep in mind that old family saying, “What goes around comes around”. In other words, reciprocal relationships are the key to long term success.
• Review unproductive services/products – now is a good time to clean house and rid your company or organization of unproductive services, products and/or unprofitable customers and clients. Take time to review your customer list and focus on your “A” clients.
• Be ready for tomorrow – when the business cycle goes into an upswing, more than likely new skills, new technologies and new services will be required. Make sure you are ready for it by staying current and creative. Find new ways to satisfy customers.
• Be transparent – job and personal security is a key issue for employees during a difficult economy. Be open and honest with employees, communicate frequently and be transparent in everything you do.
• Ensure effective decision making – avoid making a decision if you’re in panic mode. Take time, evaluate all of the aspects and impacts of the decision. Think long term.
• Improve organizational data – conduct a review and ensure your information is accurate, credible and timely. Good decisions are only made with good information that is trusted by all.
• Maintain positive vendor relationships – vendors also have corporate accountabilities and want to be assured that information you are providing is accurate. If necessary, make arrangements for different payment schedules, but always be open and honest. They will stick with you through hard times.

While economic downturns are challenging, they also create opportunities to innovate products and services, mobilize employees toward a common vision and strengthen customer relationships. These business elements will ensure that your organization is one of the “strong to survive”.

Allen Smith is from Kansas City, KS. He is a writer that cares about small business around the world.

In Guest Posts | 6 Comments