Did you get the memo? Is your organization’s version of the Great Recession completely over? Have you fully recovered? Are you now operating in your new version of normal?
Statistically speaking the “great recession” began in December 2007 and ended in June 2009. Yet, as an organizational leader, you know all too well that recovering from the recession was as difficult, and perhaps longer, than the economic event itself. In many cases, the recession changed our organizations.
Now, a decade later, many are prospering. Unemployment is down, equity is up, valuations are high (perhaps too high) and times are good.
How about you and your organization? Have you breathed a corporate sigh of relief? Prayed a prayer of thanksgiving that the worst is over? Maybe even taken a moment to relax?
After all, you weathered the greatest recession since World War II, navigated the too slow recovery and now you enjoy a stronger balance sheet, higher demand and less uncertainty.
Have you wondered, what’s next for you and your organization? What should a leader like me be doing post-recession, post-recovery?
Here are six words for leaders to consider in times of plenty.
There is a tendency in times of plenty to focus on the present. Enjoy the bounty. Celebrate success. To mistakenly imagine where you are, is where you are destined to remain. But leaders must remember, times of plenty breed a special set of leadership and organizational temptations.
Leaders must beware of becoming complacent. Have you ever witnessed a leader lose their focus and passion because they achieved a certain measure of success? Emerging from a recession and its recovery can be such a time. From the boardroom to the front lines a spirit of complacency can lower expectations and lessen engagement. Beware of being complacent.
Leaders must beware of becoming overconfident. Organizational success can foster organizational overconfidence. Have you ever witnessed a leader, or a management team, develop a spirit of overconfidence? A spirit of “over” confidence, rooted in current success, can subtly lead to less drive, lower goals and a culture of maintenance. Beware of being overconfident.
Leaders must beware of becoming entrenched. How many stories can you recount about once prosperous enterprises that declined because they were too entrenched in doing things their way, the way things had always been done? Organizations, like living organisms, are not static they are dynamic. Organizations that become entrenched in operational bureaucracy and the preservation of long-standing processes and products run the risk of becoming obsolete. Beware of being entrenched.
Leaders are responsible to help the organization remember. Your corporate memory can weigh you down or spur you forward. Look back. Remember how you coped with the recession and its recovery? Do you have a “recession glossary”? How many of these words became part of your corporate vocabulary:
What did you learn from both your failures and your successes?
Our transitory culture encourages us to live in and focus on the now. Yet as a leader, in appropriate ways, you must help your team remember, analyze and assess past performance. Have you taken the time to remember what worked in shaping culture and engaging staff to meet the challenges the recession presented? Who were your heroes, what technics and tactics worked well (and poorly)? Remember. Tell stories. File away the lessons; there will be a next time.
Leaders set the corporate agenda. They must maintain the appropriate perspective and strike the proper balance—remember the past, avoid complacency in the present and anticipate the future. Look ahead. It’s what leaders do.
Others are focused on meeting the demands of the present, and rightly so, it is their job. It is your job, your responsibility to anticipate. In times of plenty leaders must work to identify what predictable elements and critical uncertainties may affect the future of their organization.
Think outside/in. Anticipate. Observe. Ask. Assess. Take the time to read, to engage outside thinkers. Surround yourself with external advisors. What are the new paths emerging, what are the stable services to retain? Think long term, lead the board through a scenario planning process to anticipate modified paradigms and new programs. If you’re not anticipating your organization’s future who is?
Once you have looked back, looked within and looked ahead, it is time to prepare. Did you have an “if only” moment during the recession or its recovery? If only we had created a larger reserve; if only we had taken care of our deferred maintenance when times were better; if only we had been more strategic about which program to off-load and which program to launch.
Now is the time to set aside resources in a rainy day fund. Now is the time to determine if you should expand and diversify your programs, products or services in the years ahead. Now is the time, when things are going well, to make strategic decisions about organizational paradigms and practices. Leaders are responsible for preparing the organization to thrive in the future. Develop contingencies, both positive and negative. Prepare for an uncertain future and a preferred future.
When the next recession arrives, and yes, there will be another recession. What will you do? Now that you have decided to remember, plan and prepare, what resource strategies need to be put in place so you can effectively invest in your organization’s future?
Have you and the board determined appropriate levels of cash reserve? Have you, in these times of plenty, established a substantial line of credit for potential mergers, program launches or strategic acquisitions when recession caused opportunities present themselves? Have you taken advantage of the financial times and refinanced debt, capturing the savings for strategic purposes? Make the leadership investment. Make financial decisions now to position your enterprise to survive, and hopefully thrive, in and after the next recession.
Leaders make things happen. Each of the preceding five words requires action. Leadership action comes in different forms: reflection, study, engagement, planning. Much of the work needed to plan and prepare for your organizational future is done quietly, while much of the organization is working in the present.
It is up to the organization’s board and leadership team to prepare for the next recession. Now is the time to act. Here is a “future-focused” to-do list.
- Conduct an environmental scan
- Foster organization-wide dialog about the future
- Learn to think outside/in
- Engage in scenario planning
- Develop contingencies
- Describe your preferred future
- Position yourself with resources and personnel to achieve that future
- Stop doing something/start doing something now, make ‘change’ your organization’s ‘normal’
- Routinely scan the horizon for new competitors, new technologies, new delivery modes
- Make focusing on the future, in good times and bad, the work of the leadership team and the board
In times of plenty leaders should guide themselves, their people and their organizations to prepare and position themselves for what may lie ahead. Leaders do well to heed these six words: