Anyone who took even a rudimentary economics class in college understands the basic ebbs and flows of the world’s economies. Even if a person hasn’t taken any courses in economics, today’s news makes it’s impossible not to hear about tariffs, the war on trade, and international business relations cycles.
Economic “boom” and “bust” cycles—aka, expansions and contractions–are the natural state of national and even global economies. As is the human condition; when the economy contracts, everyone wants to blame someone or something. What most don’t know is that according to the National Bureau of Economic Research, in the United States, there were 33 business cycles between 1854 and 2009 with each full cycle lasting an average of roughly 56 months. America averaged 38.7 months in expansion and 17.5 months in contraction between 1854 and 2009.
However, just because we know that cycles occur in business, doesn’t mean we’re actually preparing for the worse. Because times have been good, we’d all like to think that they will keep going on forever, but the truth is they won’t. You don’t have to be a member of Mensa to know that on every possible level we’re living in a time of massive disruption. What you’re doing in an “up market” probably isn’t going to work in a “down market.” It’s time to recognize this and start making changes.
The sad reality is that most businesses surf the wave of the up market and don’t deal with the crashing of that wave until they are drowning in it. This is at best a flawed approach and at worst economically fatal! We like to think that if something is working, it will always work regardless of disruption. We often ignorantly cling to the idea that “we’ve got this” despite changing economic conditions, competition, or even customer preferences.
So what does this have to do with leadership and talent?
First off; as you likely know, a tariff is a tax or duty to be paid on a particular class of imports or exports. As a leader, you pay a cultural tariff on every person you bring into or lose from your corporate culture. So, as talk of a recession expands, here are four tariffs you can pay in advance that will allow you to thrive in a downturned market.
Focus on inclusion and collaboration.
Move away from a “we’re the owner/bosses/leaders, so we’ll decide.” A key factor in building a healthy corporate culture is to create an environment that invites not just feedback, but also innovation and new initiatives. Remember, the people on the ground are the ones who can best tell you your customers’ complaints, which are always ripe with opportunity for innovation.
Create meaningful work.
When the last recession hit, rising national unemployment rate created a pool of recruits to choose from. This time around, there’s a pretty good chance that we’ll be going into the downturn from a much weaker position as the rise of the entrepreneurial forces of the internet bulk up.
Keeping your existing employees loyal while also finding new team members will require you taking the time to create meaningful work for those valued employees. If you want people to stick with you through the next downturn, they’ll need to “feel” an emotional bond to your organization. They want to know “why” they’re there, (beyond salary) and how they’re contributing, as well as what positive differences they’re making in the organization and its existence.
Maintain a small business feel (even if you are a large enterprise).
In 2008, a lot of people (particularly Millennials) lost faith in large companies. Moreover, they lost faith in their futures within those companies. They began to see and trust smaller enterprises that eventually weathered the storm to come out stronger. One way to weather the coming storm is to create a close-knit, inclusive culture that makes everyone feel like they’re part of a community that is contributing to the greater good. This is particularly important for millennial employees who, according to 2017 research, willing to accept lower salaries in exchange for meaningful work.
Commit to running a purpose-focused organization.
A purpose-focused organization is not just built around a clearly elicited, rock-solid, emotionally compelling purpose, it’s built around leaders who eat, sleep, and breathe that purpose! Purpose-focused leaders who understand the importance of employee engagement and how to relate personal and organizational purpose with improved performance. Statements like “Our purpose is to be the best in the industry” Just won’t cut it! That’s not your real purpose. It’s just some crappy generalized mission statement you can find on the office walls of any of your competitors’. To ensure your company’s longevity in any market conditions, you must elicit your organization’s true purpose and from there create a purpose-focused organization where the people who work with you show up to do meaningful work. You must find out what sets the hearts and souls of your people on fire and use that fire to fuel the organization to not only being successful but also creating a legacy.
The mic is yours:
How are you and your organization preparing for a change in the market by proactively paying tariffs to keep your talent loyal?
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