The Hidden Benefits of Economic Uncertainty: Five Key Actions to Survive the Unknown (and Thrive When It’s Over)
Businesses constantly face challenges – employment demands, competitive threats, regulatory changes, tight labor markets, adapting to new workplace models, changing customer preferences, supply chain and production issues, and more. However, nothing poses a greater challenge to an executive team than economic uncertainty. It is very difficult to follow a strategic plan when there are mixed economic signals and lack of clarity around the economy… is it about to tank, or is it poised for rebound?
Curiously, times of economic uncertainty can be a gift. While waiting for economic winds to settle, leaders can take strategic steps, which will not only help the organization manage through the unknown but build a strong foundation for thriving once the clouds of uncertainty part.
Here are five steps that can be taken to manage through – and even profit from – economic uncertainty.
- Organize and Analyze Data
With the digitization of data, companies have an unprecedented amount of data that can be accessed to improve business operations. However, without being able to differentiate between data that is necessary and relevant vs data that is noise, diving into this exercise could lead to incorrect conclusions, hurting more than helping.
During economic uncertainty, it’s crucial to identify and evaluate which systems and processes to prioritize for digitalization and determine which data will be most meaningful in understanding ongoing operations. Furthermore, organizing this information will help identify the right KPIs, and the right metrics within those KPIs, which are most meaningful and able to deliver insight into progress on company OKRs. Tracking these metrics can give a leadership team true insights into corporate performance. And when these KPIs are taken down to a divisional, functional, and individual level, performance insights can be derived across your employee base. These kinds of insights can accelerate a company’s ability to take the types of actions that lead to tangible improvements in meeting projections, goals, and delivering increased value to the marketplace, customers, and your employees.
- Evaluate Performance Company-Wide
Following the peak of the pandemic, companies – especially in the technology sector – were aggressively hiring and scrambling to fill open roles as quickly as possible. However, many businesses are coming to terms with the impact of their aggressive hiring and now face overstaffed or under-talented teams – sometimes both.
This is where the data, after being collected and analyzed, can help evaluate company and personnel performance, pinpoint where the company is succeeding and where it’s failing, and give the ability to dive deeply into individual employee performance. Who are the “quiet quitters” and low performers? Who is rising above? Even in periods of unbridled growth, the most astute leaders and companies know there are a limited number of seats on the bus. Those seats need to be filled by not only the most qualified employees, but also the most committed.
- Upgrade Key Areas of Talent That Are Holding Your Organization Back
Once you’ve utilized data to identify the key business areas in need of improvement, as well as your low to average to star performers, it is time to “rightsize” your company. Instead of downsizing – which is just asking people to do more with less – aim to “rightsize” the organization by parting ways with employees who are impeding your organization’s progress.
In the context of your strategic goals, assess the skillsets needed for critical positions, then go a step further and assess the behavioral characteristics exemplified in the delivery of superb results. Asking, Do the individuals in these critical positions have the identified skillsets? Does their behavior reflect what has been distinguished as optimal to deliver strategic goals? Answering these questions can begin to illuminate the extent to which current leadership is behaving in a way that can accelerate growth and progress.
Then, honestly and dispassionately, remove underperformers and “quiet quitters.” Coach those with the greatest potential and promote individuals who demonstrate they are better aligned by possessing the required skillsets and who consistently drive towards business goals. And where necessary, recalibrate the levels and definition of the top talent in your organization through new hires.
- Double Down on Effective Management Training and Coaching
If you want employees to commit to the company and its vision with heart, body, and mind, there must be an equal commitment to employees. If a magnifying glass is being used to look at individual performance, then the systems and processes in place meant to empower and manage employees need to have the same careful examination.
During the pandemic, many companies moved to operating virtually. Now, most companies are moving forward with some hybrid combination of remote/virtual and in-office work. Within this hybrid environment, the challenges of effectively managing and empowering your workforce have never been greater. And the strongest talent will always shine brightest in an environment that values open communication and transparency.
By maintaining direct and consistent communication from senior leaders across departments, and by providing clear performance improvement plans, employees will understand their value to the company and company-wide buy-in will be created. This trust, guidance and empowerment ultimately contribute to a successful business.
Therefore, now is the time to invest in improving leadership’s ability to manage and empower their teams by providing the necessary managerial training, systems, and processes to be as effective as possible. Senior leaders who can effectively communicate company goals and expectations, while increasing and improving both remote and in-person management, will make the difference between just getting by and overachieving.
- Create a Culture of Management Performance
We are living in an age of pay transparency. More states are enacting legislation requiring transparency regarding compensation when posting a role and seeking job-applicants; and some states are moving forward mandating internal pay transparency. While moving to a pay transparency culture is not without administrative tasks and expenses, when it is combined with a performance management culture, it can be a difference-maker in a company’s ability to hire, retain, and promote the best.
The most astute companies and leaders are getting ahead of this curve. As they move to enact pay transparency, they are simultaneously developing the structures and systems that drive equal transparency into performance. A performance management culture is one where employees know and understand that their hard work is both acknowledged and rewarded.
And, most importantly, in a company that has both a pay transparency and performance management culture, employees are held accountable for their actions and results. They will continue to be empowered to deliver and over-deliver, with the knowledge that their performance not only dictates their future, but also contributes to company success. Building this level of trust and support within a company not only facilitates its employees’ ongoing development – it also ensures overall corporate growth and success in the face of a volatile economy.
Market changes and economic uncertainty are unavoidable. However, a period of economic unknown can be an opportunity to strengthen your organization and lay the groundwork to be even stronger in the future. Connect with us today to ensure that your executive team is well equipped for tomorrow’s challenges.
Written by Greg Selker.
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