Developing a leadership mindset through challenging times

Over the last week I’ve just been reading the headlines on the BBC website, which should come with a health warning! Stories included gridlocks at ports, massive NHS backlog, high inflation, cost of living crisis, the war in Ukraine, and the impending UK strikes. It seems clear that we are entering an economic downturn that, on top of post-pandemic supply chain issues, is creating serious business challenges.

Effective cost and investment management will be critical to delivering profitable returns over the coming months. Yet, the research continues to show that the companies that do best through a recession and, in particular, the post-recession period are those that find the right balance between cost and growth management. This research has identified the following guidelines:

1. When it comes to cost-cutting, focus on improving operational efficiency, not just headcount reduction.
2. Stay as close as possible to your customers, to understand and respond to changes in their needs and priorities.
3. Be willing to make selective investments to improve long-term performance (potentially taking advantage of the depressed property, equipment and asset prices).
4. Continue to invest in R&D and brand marketing. This may add relatively little to your performance during a recession, but it will help drive growth on the other side of the downturn.

Finding the right balance of defensive and offensive actions is not easy. But it starts with adopting a mindset of looking to exploit new opportunities, and not just address your immediate problems.