Seven steps to riding out the downturn

Sep 05 2008 by Nic Paton Print This Article

Worried about how you are going to manage your way through the downturn? You could do a lot worse than following a seven-step "resiliency strategy" drawn up by a U.S research firm.

The recommendations by Sirota Survey Intelligence are focused on effective people management at all levels, with the aim of ensuring that the business, and its people, are best placed to deal with whatever economic knocks may come their way.

The first of these seven steps is simply to develop and engender a "partnership culture" within your business.

Companies with this culture generally outperformed those with a more confrontational, command and control culture, during both boom-times and downturns, argued Sirota.

The hallmarks of such a working culture included basic trust, a long-term perspective, joint decision-making, open communications, financial sharing, and equitable day-to-day treatment, it added.

"These values need to be followed on a daily basis, particularly during challenging times, in order for a partnership culture to work," pointed out Sirota president Douglas Klein.

Second, it was important to create, communicate, and then exhaust "rings of defence" before downsizing.

By this Sirota meant looking at all other available options to reduce costs before taking a red pen to the staff list.

"An employer that treats its employees as true partners makes every effort to avoid layoffs," Klein said.

"Believe it or not, you will even find people willing to participate in arrangements for their own 'funerals.' The key is employees having trust in management – that they feel management is being absolutely open and honest, and is doing everything it can to cushion the blow.

"When it does become necessary to reduce costs, many steps can be taken as an alternative to involuntary layoffs," he added.

Third, it was imperative that senior management focused on the local behaviour of immediate supervisors and managers.

"Simple management behaviours such as giving timely recognition to employees, supporting their continued development, and providing coaching and guidance, mean a lot to employees – especially when they are anxious," Klein said.

"During these times, it is even more important to be consistent between words and actions, and to create an environment where everyone is respected. These leaders and managers should receive guidance in how to understand their own – and their subordinates' – reactions to stress, and how to develop coping strategies," he added.

Yet, at the same time (and fourth), it was important to pay more attention to high-potential employees, as they were the ones most likely to leave during difficult times.

"Even in a tough economy, high-potential employees have other opportunities," Klein said.

"Consider developing a retention strategy for high-potentials that includes a strong focus on career development. Give them special projects to meet their achievement needs, and make sure they are taking advantage of training and development opportunities," he advised.

Fifth, it was a good idea to create ways for all employees to contribute to the company's efficiency and effectiveness goals, Sirota recommended.

"One excellent mechanism is gainsharing efforts," Klein said. "As the name says, it is a method for sharing gains with employees – the gains that employees themselves achieve for the organisation. These programs are very motivating and truly exemplify a partnership culture."

Sixth, a wise manager in tougher times ensured he or she did not exclude employees from assisting with possible solutions, Sirota recommended.

"Management often keeps plans and information very close-to-the-vest during difficult times," Klein said.

"Communicating openly and asking for help in developing actions to be taken helps minimise feelings of powerlessness," he added.

Finally, while the temptation for many managers was often simply to put your nose to the grindstone, it was important not to stop performing periodic employee assessments.

"Companies need to assess how anxious their employees and leaders are feeling about internal and external issues, and how well their culture and management practices are buffering," said Klein.

"Monitor workers' stress levels, their perceptions of their workloads, and be on the lookout for burnout," he added.

More widely, adopting a clearly communicated strategy in this way could also help to reassure employees anxious about their futures and their jobs, argued Klein.

"The potential loss of a job, increased workload, a less positive future within the organisation (even if not laid off), loss of colleagues and friends, and management practices that often devalue employees, can all have a significant negative impact on employees' performance," he said.

"Businesses need to manage through this uncertainty and these business cycles – rather than from within them," he added.

"They need to adopt strategies – before negative business events occur – that will mitigate the impact of uncertainty on employees.

"Employers need to avoid managing people as expense items in the budget so they can retain workers when times are good – and employees have more career options available to them," Klein concluded.