10 Steps to Survive a Recession

Businesses that take 10 important steps have a better chance of emerging from the current recession in a position to succeed, according to The Forum Corp., a Boston-based consulting firm that helps organizations execute strategy through people.

“By looking at past recessions, we’ve identified 10 steps that can make the difference between success and failure in managing through our current downturn, and they all come back to leadership,” said Ed Boswell, CEO of The Forum Corp. “Following these steps will be particularly valuable in organizations that are undergoing cost-cutting and layoffs, which challenge managers to do more with less.”

Finances

1. Reduce costs and control spending. Focus on a few critical priorities that will offer your organization a clear lead against your competitors.



2. Refrain from across-the-board cutbacks. Maintain products and services that customers value most. By cutting in all areas, organizations find that they cannot maintain strong service and deliverability to customers. Customer surveys can reveal a company’s most valuable products and services.



3. Consider alternatives to layoffs. Although downsizing may deliver a short-term boost to a company’s bottom line and stock price, it can create long-term negative effects. Before laying off workers, consider cutting management bonuses, freezing salaries and reducing compensation options. Remember to offer employees a clear explanation about the reasons for cutbacks.



4. Invest in opportunity. Bargains in assets and talent are often available during an economic downturn. Emphasize investments in research and development, marketing and customer-perceived quality.


People

5. Retain and develop top talent. Offer new challenges, training and valuable experiences to top performers. They are the most likely to be lured by a competitor when the economy is ailing.



6. Align the workforce around key goals. Performance suffers when team members are uncertain and hidden agendas emerge. Instead, frame an agenda, gain support and build commitment to goals and values.



7. Encourage questions and new ideas. Seek input from employees and offer a safe environment for them to share their feedback.


Climate

8. Squelch the temptation to make unilateral decisions. During tough times, leaders may be tempted to dictate solutions. However, this leadership style does not take advantage of a broad base of support and doesn’t allow challenges from others that could result in better decisions.



9. Communicate authentically. When strong leaders share their struggles, they build trust.



10. Create a positive vision and attitude that acknowledges reality. When leaders mobilize employees to respond to customers’ interests and values, they increase the chance that, when the downturn ends, they’ll come out on top.

WP

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