Executive coach to the most passionate and transformative leaders in business and the CEO of Transcend.
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Do your recent conversations with other executives, combined with the latest economic impact reports, fill you with a sense of uneasiness about today’s business landscape? You’re certainly not alone in the feelings of anxiety that come with the very real global volatility we are experiencing. However, there is an opportunity for CEOs to reimagine how they position their businesses, turning instability on its head to create a lasting competitive advantage. It takes courage to "play offense" and generate growth when others are battening down the hatches. Even so, unique dynamics exist within downturns that enable leaders to reposition their business ahead of the pack.
Here are four offensive strategies you can use to create maximum acceleration while others cut back, ensuring fiscal responsibility as you go.
1. Strategically earmark capital to attract emerging talent.
In recent years, leaders have been experiencing continuous challenges in recruiting and retaining talent. Downturns naturally shift these dynamics, providing the opportunity to acquire expert hires from competitors. Ask yourself, are you positioned with a recruiting strategy—and an allotment of capital—to make this employment uncertainty work in your favor?
When you adjust talent spend to market conditions, realign staffing plans toward future strategic capabilities and rewrite job descriptions to reflect that. This opens up opportunities to acquire seasoned talent who choose the downturn as an inflection point in their own careers. After all, those who are growth-focused will seek progressive companies over ones that tend to retreat from risk. Now is the time to reach out to prospects who might be interested in starting fresh with a company that’s willing to play offense.
Moreover, if you don’t have a chief people officer (CPO) on staff, these are the moments that highlight why you need one. Every CEO should have an executive counterpart obsessing over the capabilities of enterprise talent to deliver future business. They will ensure your spending adjustments provide the capacity to gain traction once the skies have cleared. In addition, prioritizing a CPO hire during a downturn can help retain talent by demonstrating your commitment to delivering exceptional outcomes for the people and the business.
2. Preserve investments in future capabilities.
There are countless methods to reduce expenses, some more beneficial than others. Believe it or not, the “all reductions treated equally” philosophy still exists within pockets of business. This approach is a death blow to an offensive strategy during a downturn, limiting quick acceleration when the economy corrects. Instead, focus on retaining and expanding your most profitable customers and lines of revenue by adequately resourcing, as discussed above. This will unlock opportunities to apply pressure when competitors stumble. The ability to showcase and deliver compelling pricing, packaging and service options to a competitor’s clients when fiscal practicality is top of mind is the fastest way to capture market share.
Equally important is to preserve the existing resources you’ve allotted for innovation and future strategy initiatives, even if it means painfully cutting back in other areas of the business. Hitting pause on these investments will only weaken your long-term competitive advantage. Put your business in a position to win by realigning resources to manage present challenges while continuing to contribute to the future.
3. Take time to strengthen your core.
A downturn can be a valuable opportunity to strengthen internal systems and processes. In order to understand cost-benefit ratios, start by assessing possible time and budget spend internally. Then, use customer experience mapping to research the customer journey from start to finish, finding areas to improve upon. What are some touchpoints that aren’t quite on par with the rest of the process, and how do they relate to your brand, products and services? This can be a great excuse to stay connected to clients who are scaling back; you’re seeking their feedback in an effort to build a better customer experience. Taking the time to gain information, test and correct can make all the difference when the ability to scale reemerges.
Additionally, take a close look at your procurement processes to understand the time, money and resources being allocated to internal initiatives through partners. Ensure those that drive future capabilities remain intact while also maintaining the services that elevate customer and employee engagement. Finally, consider the process you’re using to rate vendors. Are you getting the best and most valued resources for your money? By strengthening procurement processes, versus simply making cuts across the board, you’re locking in return on investment (ROI) now and for the future.
4. Increase communication for insight and high engagement.
It’s common practice to centralize decision-making during a downturn, but when you do, it is critical to maintain engagement with clear communication and feedback. Over the course of the Covid-19 pandemic, in many cases, there was a rise in transparency and frequency of information from the C-suite, but as time went on, many slipped back into old habits, becoming less intentional with employee communication.
It’s time to bring those efforts back as your business goes through the next cycle. Proactive feedback is critical to understanding opportunities for growth, efficiency and creative solutions. After all, some of the most innovative ideas during downturns exist not in the C-suite but at the level of implementation. Open and transparent communication is the single best tool to create a culture of collective problem solvers, as well as to subside any apprehension people might be feeling.
The highest-performing enterprises never stop playing offense, regardless of the state of economic or business cycles. It’s important for CEOs to celebrate growth and continue protecting strategies that matter, even in times of serious challenge. When turbulence is present, people across the enterprise will watch closely to determine what is being valued and if the business is perusing the future or regressing. By leveraging the processes and principles we’ve discussed here, you can help ensure the difficult decisions you make during a downturn will reflect the common good of strategic growth and not a reactive strategy of defensiveness.
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