The Eagle Blog

Managing Through a Downturn

John Izzo is an author and speaker, and I subscribe to his regular newsletter called the Enlightened Leader. I have mentioned John in previous blog entries and I particularly enjoy his compassionate, yet pragmatic views on the workplace.

In previous blogs I talked about John’s book the 5 Secrets You Must Discover Before You Die, and I also wrote a blog entry entitled Dream big!

In John’s latest newsletter is some very good advice for business leaders faced with an economy that is hurting. I highly recommend that you subscribe to John’s newsletter at his website, but read the following article for an example of John’s work.

I hope your summer was an enjoyable one. One that found time for relaxation and for some renewal. We all need it with the constant headlines of “gloomy economic news.” In the last few weeks, companies ranging from Citigroup and GM to Starbucks, American Airlines and Air Canada have all announced significant layoffs. High fuel prices and a slowing world economy mean that tough times may be ahead for many companies. But how do leaders keep people engaged and motivated during tough times? How can you keep your people on-side and productive even while you adapt to a potential slowdown? Remember that how leaders navigate tough times is the ultimate test of a corporate culture.

Rule # 1: Stay focused on selling your long term vision. In tough times it is tempting to focus on the current challenges. The CEO and other leaders must remain positive and keep reminding people about the long term vision. Show how you plan to weather the storm and come out ahead down the road. Remember no one wants to work hard for a losing team or a sinking ship. You can bet the folks at Starbucks aren’t telling people they are abandoning their long-term vision which is to “be one of the world’s most admired companies.”

Rule # 2: Communicate more than you think you need to. Remember that in tough times, employees get nervous about job security and employee insecurity means lost productivity. Wise leaders keep the channels of communication wide open, keeping people informed about what is happening and the how the company is responding. When rumors do emerge, respond promptly.

Rule # 3: Be visible. During tough times it is tempting for leaders to “hide” away in the office. Do the opposite. People need to see more of you. Remember when the flight is going well, the pilot should let people enjoy the movie. When turbulence comes, they want to hear the soothing voice of a calm pilot telling them how long the turbulence may last. Make regular rounds putting it on your calendar as a priority.

Rule # 4: Ask your people for help. Tough times usually require belt tightening and your employees are your best resource for finding ways to keep costs down and service/quality up. During change, people need to feel like they are doing useful things to help. Engage your people and ask for their ideas on how to reduce costs while keeping quality high. Instead of having people sit around worrying, get them involved in solving problems.

Rule # 5: Focus on Gaining Market Share. Downturns are often the best time to gain market share. While your competitors lose focus and serve up disengaged people you can gain advantage. As you tighten your belt, engage your people in looking at ways to serve the customer during the downturns. Add value even to those who aren’t buying right now. When things turn around, your market share will rebound.

Rule # 6: Finally, let people know that “we are in this together.” If we are asking our people to sacrifice, leaders must make them as well. The senior people at most airlines took bonuses amidst record losses while the CEO of Delta Airlines turned down his yearly salary. No wonder a recent business column said Delta was “least likely” to go out of business of all major U.S. airlines. This is not the time for management bonuses while initiating layoffs or keeping fancy perks for some people while others lose the basics. The main point here is use common sense-perception matters.

Remember that how we manage the downturns says as much or more about our corporate culture than how we manage the growth cycles.



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