Management & Leadership Challenges in Turbulent Times

To survive times of economic turbulence, managers must maintain their focus despite many challenges.

Times of economic uncertainty test even the most competent managers. A cost-saving decision to reduce inventory or staff carries far-reaching consequences when times improve. Tough times require managers to have a realistic view of the requirements of the present circumstances and also to look ahead for opportunities that economic downturns offer.

Cost Reduction

In unfavorable economic conditions, pressure builds on management to "tighten the belt." Reducing staff, inventory and advertising feels like an unfortunate necessity when cash flow is down, but cutting too deeply impedes a business's ability to respond when economic conditions improve.

Communication

Striking the right balance between optimism and honesty ranks among the most difficult and most important challenges faced by management. Employee morale depends to a large degree on the tone set by management. Communication should reflect optimism for the future without appearing out of touch with current difficulties.

Customers

When economic troubles cause customers to reduce their spending, businesses see their cash flows tighten. Customer retention becomes a high priority. This may involve maintaining customer support and service when conditions necessitate staff and inventory reductions. For this reason, management must continuously strive for increased efficiency in all areas.

References

• Arizona State University College of Business: How Small Businesses Can Survive and Thrive in a Recession -- Part One
• Penn State Smeal College of Business: Surviving the Terrible Two(thousand)s: A Participant's Guide
• University of Massachusetts: Jilted? The Manager's Little Book for Keeping Customers in a Recession

Resources

• Harvard University: How to Think Strategically in a Recession - Strategy for the Recession