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Leadership Tips for Economic Uncertainty

A man looks pensively at his laptop computer.

In economic uncertainty, leaders face many challenges. How you handle these challenges determines how well your business emerges. While there are several variables out of your control, there are things you can do to weather an economic storm. Returning to the organization’s basics and focusing on the mission provides a strong foundation for innovation.

Employees also look to you for guidance and reassurance. Many fears come with times of uncertainty. Transparency and clear communication unify leadership and employees to solve problems together. When you value and recognize your employee’s feedback, concerns, and ideas, they are more likely to be loyal instead of jumping ship. Here are 10 practical leadership tips for recessions and beyond.

1. Anchor to the Mission, Vision and Purpose

Although there is much uncertainty during a recession, leaders can look to mission, vision, and purpose for guidance. Great leaders can navigate uncertainty and overcome challenges by staying connected to the company’s guiding principles. Make sure that decisions align with business values. You’ll have to make difficult decisions to ensure the longevity of your business. But they must still align with your values and purpose. 

Some ways to stay anchored include:

  • Lead with vision: During economic uncertainty, great leaders lead with vision. They motivate and inspire their teams to continue implementing the business mission. When business leaders stay focused on the business purpose, even during hard times, it fosters a culture of respect and transparency. Workers can trust leaders to guide them in a direction and in a manner that is best for the organization.
  • Reffirm the mission with employees: Ensure employees know the company mission statement and vision. Leaders must communicate them effectively to employees and get them excited about them. Sharing all the way down to individual teams ensures that the workforce is aligned and focused on customer needs. Consider displaying your mission statement for employees to see. 
  • Communicate decisions: When communicating decisions, relate them to your vision. Employees should see how your choices drive the business forward during. Clarity results in better alignment, allowing executives to focus their full attention on culture, strategy, organization, results, and execution. 

2. Align Strategies With Goals

Giving clarity to teams on the business goals during a recession helps stabilize the business’s pulse, maintains momentum, and helps employees understand how to measure success. Company goals also keep your teams on track. They can quickly make course corrections if they deviate from their objectives. 

align company strategies with goals

Consider these approaches:

  • Ensure strategies align with goals: Businesses must ensure business strategies align with goals. Executives’ main concern during an economic downturn is the company’s strategic direction. As a senior leader, it’s essential to understand problems. Executives need your solutions to support strategic decision-making.
  • Consider contingency plans: While strategizing, you should also consider contingencies. Contingency plans better equip leaders to stay calm when problems arise. Instead of panicking, you can execute your plans. 
  • Translate strategies into objectives: When you have decided on strategies, translate them into actionable team goals and objectives. Communicate them to all management levels to ensure alignment. Refrain from assuming that teams know the business priorities. Economic uncertainty can cause some groups to slow down and make others very busy. Aligning business goals can help your workforce navigate changes.

3. Increase Communication Cadences 

Consistent communication is vital during uncertainty. Communicating with employees helps to maintain a positive work environment. A lack of communication from senior leaders heightens stress. When employees don’t hear from executives, they think of worst-case scenarios. 

Employees need employers to be a stable force they can count on. By making an effort to communicate with your workforce during hard times, you build trust with all levels of the company. Employees deserve to know how the company is performing, what is currently happening in the business, what the challenges are, and what you will do to ensure the business’s longevity. 

Communicate the strategic plans you have to solve problems. Meet with employees regularly to communicate changes and get feedback. Some ideas include:

  • Monthly or quarterly updates about goal progress
  • Meet and greet events
  • Company-wide town halls
  • Employee forums

Make sure to be transparent with your answers but also be calm. Communicate plans in a way that workers can also understand by providing projections and numbers with context. Good leaders can communicate a strategic plan and commit to regular progress updates. 

4. Empower Accountability

Putting company goals on a public platform creates transparency and drives accountability. When leaders communicate company goals and KPIs, it encourages employees to be innovative and think of solutions. Some leaders believe that displaying plans and setting high expectations for success, especially during a recession, may negatively impact morale. The opposite is often true. When everyone can see the goals, the workforce is motivated. Each individual wants to contribute to the success of the business. 

Too often, leadership communicates goals as complex ideas, and too many objectives and deliverables can cause confusion. When employees need clarification about what to do, they continue in their same work patterns. They aren’t able to act, resulting in minimal impact. To empower accountability amongst employees, strategies and goals must be straightforward enough that each person knows how their role in the company helps execute them. Here’s how: 

  1. Start by explaining the challenges the business is facing and why they are essential. 
  2. Give clear directions so everyone knows where the company’s focus is. 
  3. Explain what the priorities are to ensure you get there. 
  4. Give a clear explanation of the actions everyone needs to take to achieve goals. 

When you provide clarity, teams can make things happen and act responsibly and ethically to meet targets. 

5. Allow Ideas to Flow Upward

Upward communication is essential during challenging times. Great leaders break down hierarchies to cultivate mutual respect. They show empathy and encourage employees to speak up. Employees who can freely provide feedback, share ideas, and raise concerns are less likely to look for prospects elsewhere. Leaders who prioritize this communication can help improve employee retention. 

Upward communication creates a culture where employees feel valued and trust their employers by:

  • Cultivating a healthy work environment and increased engagement: Workers who feel heard are 4.6 times more likely to feel empowered to perform their best work. When employees feel their sharing of voice is encouraged and appreciated, they have greater satisfaction in the workplace and morale increases.
  • Understanding how employees feel during tough times: Most people worry about their job security during a recession. Leaders need to recognize the realities that employers are facing and prioritize their concerns. Executives can only empathize if employees have the freedom to speak up. 
  • Encouraging employees to speak up: Managers play a crucial role in upward communication. Yet many don’t want to or need to learn how to encourage employees to speak up. Many organizations use technology solutions to enable employees to share their ideas. These communication channels need to be available to the entire workforce. 

6. Continual Investment in Employees

employee are your biggest asset

Employees are your biggest asset, so you should continue investing in them, even in tough times. Development and training are often among budget cuts during an economic downturn. Many companies must correct this because growth opportunities increase employee loyalty and commitment. Employees value learning opportunities for career development. They feel secure in their jobs when an employer invests in their growth. Your employees are more likely to stay if learning and development opportunities are available. 

Inadequately trained staff impacts a business’s performance. They can contribute to low productivity, an unsafe work environment, and high staff turnover. Continuing with training and development equips staff with the skills and knowledge. It exposes them to innovative ideas they can harness to overcome business challenges.

Even in a recession, leaders should recognize exceptional staff for their achievements. To retain your top talent, give promotions to employees who deserve them. Celebrate and reward staff for their wins. By showing workers that they have a promising future, they will be motivated to stay. 

7. Emphasize Basics

In a rush to solve problems of economic turmoil, businesses often need to pay more attention to the basics. Forgetting the basics causes teams to perform at suboptimal levels. When leaders find themselves in times of chaos, emphasizing the basics is the best way to rationalize and align the workforce. When there is significant uncertainty about the future, reinventing and revolutionizing your business is often unnecessary and unsustainable, especially if the basics need improvement. 

Getting the basics right creates an opportunity for innovation. When organizations are consistent in basics and do them well, opportunities for growth and creation arise. Refocusing attention on your business’s foundation helps maintain growth and momentum. 

To ensure teams stay the course, prioritize monthly meetings focusing on basics such as prospecting, time management, and the sales process. Establish direct and open lines of communication to keep teams on track and determine if anything needs to change. 

8. Show Opportunity — Share Bad News With Good News

Transparency is essential during times of turmoil. Some leaders worry that sharing negative news will discourage employees. Being open stops rumors, gossip, and fear from spreading. Forthcoming leaders can unify their workforce to work together towards a common goal and find solutions. Even though employees are aware of the recession, they’ll need clarity on how it affects the business. Link the economic landscape and your business. 

Talk about where the company was and what is happening, then transition to what comes next. Avoid playing out all of the possible worst-case scenarios. Be honest about the challenges and share the possibilities in the face of turmoil. Even in adversity, great leaders seek out opportunities. An economic crisis may be the perfect chance for you to eliminate mundane tasks that add little value or don’t improve the bottom line. 

Be authentic and speak plainly when you share the bad and good news. How you connect with your employees and follow up with actions will resonate with employees. 

9. Create a Work-Life Balance.

healthy work-life balance

Having a healthy work-life balance in times of chaos is essential. The stress from a regular work day compounded with pressure from an economic downturn can be detrimental. It affects your relationships, health, and overall happiness. It’s wise to create clear boundaries between work and personal time to have a work-life balance. 

Many people believe that by working more, they can get more done. The reality is that working smarter is a more productive approach. The better care your take of yourself, the better you can show up for meaningful relationships and tasks. 

Consider these steps to create a better work-life balance and encourage employees to do the same:

  1. Write down your high-priority relationships and activities. Create boundaries to allocate your time to these people and activities. 
  2. Once you know your priorities, trim down on time-wasting tasks. Focus on the activities and people that reward you the most. 
  3. When spending quality time alone or with loved ones, shut your phone off. Constant notifications inject an undercurrent of stress, making you feel less in control. 

Be intentional with your calendar. Create time blocks for your work and quality time. 

10. Prioritize Physical and Mental Health for Healthier Leadership

Taking care of your physical and mental health is essential and even more so during stressful times. Leaders that neglect their health are typically more anxious and stressed. In difficulty, your workforce looks to you for assurance. The last thing that your team needs is to experience disruptive emotions from you. To be a healthy leader, you must block out time for exercise, maintain good nutrition, get enough sleep, and have fun. 

Physical exercise is an effective stress reliever for leaders.It helps to improve your mood, and it can help you to stay calm and focused on your daily tasks. You can choose virtually any form of exercise. The most important thing is to choose an activity you enjoy so you will stick with it. 

Find healthy ways to reduce stress and improve your mental health. For example, instead of turning to alcohol, deep breathing exercises or five minutes of meditation in the evening are healthier ways to destress. The more you do activities like these, the more you activate your parasympathetic nervous system, which helps to calm everything down and relaxes your body. The benefits last after your exercises too. 

Recruit Exceptional Leaders

With Diversified Search Group

Recruit Exceptional Leaders With Diversified Search Group

Exceptional leadership during a time of change is crucial. Great leaders know how to lead teams well through adversity. They also know how to care for themselves, provide assurance to teams, and lead well. In uncertain times, transparency and clear communication are essential to strengthen relationships between employers and employees and build trust. When mutual trust exists, leaders involve their teams in finding solutions, and workers feel more connected and valued. Organizations can emerge stronger after an economic crisis by seeking opportunities and cultivating a healthy culture. 

At Diversified Search, we attract and recruit transformational, inspiring executives who bring exceptional talent and vision to the organizations that they lead. We put your organizational needs first and prioritize finding the best candidates to realize your mission, grow your business, and drive business performance. We help you forge a new path and recruit transformational executives to lead your business in these changing times — partner with us by contacting us today for your executive search needs.