What Will You Do When Things Go Bad?

Like it or not, these are the good times

Published: Thursday, December 14, 2017 - 13:01

There’s a lot to be worried about in business: the political climate, robots and automation, the future of entrepreneurism and innovation, the promise or peril of the gig economy. But imagine if we weren’t in an economy that’s been growing for years.

Like it or not, these are the good times, and that should make us concerned about how prepared we are, as leaders and companies, for the inevitable downturn. Maybe that time won’t arrive tomorrow or this year or even this decade, but it will. There’s always a downturn.

Why am I starting this column with such dire thoughts? Because leadership in these times is easy. You hire, you expand, you can talk about motivating for excellence, building industries, and helping people find a career and maybe a fortune. Technology is a force for good (and productivity).

This is also the time where you see many articles, books, and TED Talks about great leaders telling you why they are so great. Notably, they’ll throw in some tale of hardship, but it’s mostly about success going forward, sprinkled with positivity and win-wins, maybe even win-win-wins.

In the bad times, none of that is the case. Revenue and profit suddenly are harder to come by. Customers leave you, assuming they even stick around long enough to leave. You might be getting smoked by the competition, but that competition isn’t necessarily peer companies. It could be upstarts, regulation, foreign actors, a financial crisis, technological upheaval, or even just terrible luck. Worst case, maybe you have no idea why things have gone bad.

Then, you’ve got to cut costs. That means laying off people, and not just the “bad” ones. Maybe your organization tries some new strategies and tactics, with varying levels of business intelligence behind these moves. Throughout, you’ve got to somehow keep yourself going, your team united, and your company a going concern, when there isn’t a whole lot of optimism bubbling up.

Anyone can build and execute a strategy when money seems to be falling from the sky. It’s harder when none of the fundamentals seem to be going your way, and everyone is distracted, angry, demoralized, or all three.

On a personal level, how great is it to manage star employees who do no wrong? It’s a little more difficult when you need to ask the impossible of them because times are tough, or when you need to lay off a good performer who’s done nothing wrong. How about when you have to pull back on perks, training, bonuses, or career growth? How about when you are automating their job—and they know it?

What to do before the crisis

Unfortunately, there aren’t easy answers to these questions, or else there would never be recessions, bankruptcies, or panics. All I can say is, start preparing now. This isn’t arbitrary pessimism. Enjoy the good times! Grow, invest, develop, and go big! But also, try and examine contingencies while deciding what kind of leader you’ll be in tough times.

At a strategic level, try thinking about mindsets, questions to ask, and self-examination (Steve McKee’s series is a good place to start). Think about what you’d do if your organization started losing customers, or if a new competitor rose up or threatened to displace you. What if revenue fell by 15 percent, and your main product was being commoditized? Would you just slash costs and people while grasping at any new product? Or, would you think about a better, more sustainable way to fight through tough times and come out ahead?

Likewise, play out similar scenarios that could hit you and your direct reports. What if automation could do 50 percent of your job, or your team’s? What are your options? What if you or your organization started losing great talent because of bad managers, or a lack of growth potential, or because they don't believe in the organization anymore? What if you weren't allowed to replace the next two people who leave?

Will you let frustration or doomsday thinking reign? Or will you get to asking questions, trying new things, being that creative force that a leader is supposed to be? (Julie Winkle Giulioni has written about career opportunity, the difference between robots and humans, and overcoming bad systems.)

Preparation is a big part of why people can keep calm during a crisis. Start now so that you can lessen the pain of hard times—not just for yourself, but for many others.

First published on the SmartBrief blog.

About The Author

James daSilva

James daSilva is a senior editor in charge of SmartBrief's leadership and management content, as well as newsletters for entrepreneurs, HR executives, wholesale-distributors and manufacturers. Before joining SmartBrief, daSilva was copy desk chief at a daily newspaper in New York. You can find him on Twitter sharing leadership and management insights @SBLeaders.