How to Manage Through a Downturn

Bad things happen to good people and the same goes for companies. Management must be responsible for their company's performance under all economic conditions. Leading your company through a downturn is not only possible, it can also be turned into an opportunity.

Difficulty: Moderate

Instructions

1. Plan ahead. Being prepared for a downturn can limit its effect on your business.

2. Be watchful so that you know when it is coming. A surprise downturn will be much more damaging than one that you see coming.

3. Focus on your strengths and core businesses during a downturn. Don't be fancy, get back to the basics. Manage your company to improve current operations rather than expanding or changing.

4. Create resourceful solutions. Turn the necessity of the current economic situation into the mother of your invention: go make something new. Perhaps your company can benefit from the downturn. Are able to make an acquisition at a lower price because of the market weakness? Can you market a new product or service that your customers need during an economic downturn?

5. Invest non-productive time wisely. Offer training to employees and complete projects that analyze and improve your operations.

6. Look to the past for guidance. Did you already manage through a downturn once? How can you do it better? Also look to learn from your colleagues and superiors. There are also numerous books written by famous managers on how they led their companies through downturns.

Tips & Warnings

• Be open with your employees about the situation. If they are afraid of losing their jobs they will not be able to perform up to their previous levels, let alone in a way that will get you all through the downturn. If you are clear and honest, they will reward you with loyalty.
• Don't cut too aggressively because it could damage the effectiveness of your employees and, if the recession is shorter than expected, inhibit your ability to manage during an upturn.