The recession is a difficult time for everyone, and it can be even more difficult for those in leadership positions. As the saying goes, 'you have to lead from the front'. This is true in good times and bad.
In order to understand what you should do during a recession, it's important to understand what you shouldn't do. When leaders make mistakes, they often internalize that and can end up feeling overwhelmed or burnt out. This dynamic can lead them to make poor decisions with negative consequences for their company.
Recognizing this vicious cycle can help a leader to interrupt it. Growth Force published an article, “The Biggest Mistakes Leaders Make During A Recession and What to do Instead" which describes this phenomenon and how to prevent it from happening.
Here is Growth Force’s list of 10 mistakes leaders make and how to avoid making the same ones yourself:
1. Panicking – try to stay calm and think before making any decisions while feeling panicked.
2. Delaying Essential Hires – Employees make your business successful so don’t hold off hiring if an employee moves on. Ensure to fill the position as soon as possible.
3. Squashing Your Marketing Budget – Marketing is typically the first department to receive budget cuts but, adversely, marketing efforts can actively bring in leads during a recession. Create a process to track ROI and optimize campaigns to ensure they’re running efficiently.
4. Overlooking Vulnerabilities – Identify the weak spots within the company and create a plan to rebuild those areas.
5. Failing to Adapt – Businesses must adapt and make changes to the changing climate. Stay ahead of the game instead of waiting.
6. Thoughtlessly Discounting Prices –Instead of cutting prices, think through which areas might be manageable as-is because discount prices can sometimes do more harm than good.
7. Focusing on Low-Profit Revenue Streams –Make sure to focus on the areas that are most profitable and attack those because the highest performing assets will be the most valuable to your business.
8. Pursuing All Sales Leads – Ensure to only purse quality leads. Time is money and you don’t want to be investing time in bad or poor-quality leads.
9. Running Out of Working Capital – If you’re losing money, make sure to understand what threshold you will be at to breakeven and then make changes based on this data.
10. Ignoring or Fostering a Lack-Luster Company Culture – Recessions are hard on everyone – businesses, leaders, and employees alike. Take time to care for, recognize, and reward your employees, as they’re the core of your business.
Using these tools in times of hardship can help you eliminate burnout by delegating responsibilities where possible. No leader is perfect and employees are the foundation to success. So, work as a team to accomplish your goals and mission together during uncertain times. If you’re interested in learning more – contact a Marketing Innovators Specialist today.