It is a truth well-recognized by business pundits everywhere these days that recessionary pressure makes the leadership discipline of strategy more important, not less. "It’s not just about execution and cost-cutting," they opine, thumbs in lapels, rocking back on their heels. "It’s about the long term view as well. Make sure you are positioned for the recovery." Thanks, you say. But if you are currently stringing out vendors to meet payroll, or cashing in recyclables to keep the lights on, this advice may ring hollow indeed.
Here’s the thing: they’re right. Many studies show that firms that come out of a recovery in an advantaged position tend to keep it far into the recovery period. What do these analyses tell us that these companies have done better than others? Well, the big one is that they go into recessions strong: they managed their finances conservatively in good times and have ample cash on hand entering bad times. But even if that is not your situation, you can still turn this recession to advantage by thinking and acting strategically in ways that challenge your ingenuity, openness and leadership habits more than your Treasury. Specifically:
Stay Curious. A recession is no time to shut down your own thinking. In fact, it is time to open it up. Even if you had a winning formula going into the recession, allow yourself the pleasure of questioning your assumptions: it’s a new world. Always ask yourself: "What if…" and explore possibilities. Connect with leading thinkers whoever they may be. Make yourself read more broadly than before, look for trends and ideas that you have never explored before. Spend a little of that cash you’ve hidden under your mattress to go to a conference you think you can’t afford and would have skipped before because it was not core to your business – new ideas, new approaches, new ideas and new people will be perceived at the edge of your vision, not the center. Make yourself understand and use the social networking technology you have been ignoring (this advice to my peers and older) because it really and truly will open up your world. Use these insights not only to understand your own situation better, but to anticipate problems that your best of future customers might be facing. It will also allow you to connect into that now famous "crowd" that really does have some good ideas.
Invite your savviest outsiders inside: At a minimum, you will build empathy and loyalty with your customers and other key stakeholders (major investors, community leaders and the like). You never know when you may need their support or sufferance as this recession drags on. It is also very likely that they will have some good ideas for you. Customers influence strategy when their needs and experiences connect to employees throughout your organization. That may have been happening before – but do you still understand each other? Their needs have doubtless changed. Make sure you still know each other.
No "one" knows enough: engage the organization. The temptation to hunker down with your exclusive group of trusted advisors may threaten to overwhelm you. Don’t let it. Take some advice from our president-elect (even if you voted for the opposition): rock the vote. You need to engage others within the organization in developing your strategy. Why? Because each member of the organization also wants to survive, and may be able to add a lot to the strategic process if you let them have a voice. This is true especially if the organization has experienced a lot of change (read: downsizing and restructuring).
Create Strategic Traction Within the Organization. Strategic leadership also requires embedding strategic capability throughout the organization. Strategy is often delegated upward to the CEO or senior management team, which have a legitimate responsibility to shape the direction of the entire company. But strategic traction comes when employees at all levels of the company not only understand where the company is going, but they are excited by it, remember it, and know what to do to make it happen in their day-to-day decisions. They will have valid points of view about how the strategy will be operationalized internally, including which difficulties need to be overcome and how.
Remember: great companies are built over decades, and recessions come and go. If you act as if you are in it for the long haul in terms of your own thinking, and your relationships with customers, employees, the community and investors, you are much more likely to make it there.
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