Navigating economic challenges and uncertainty

Navigating uncertainty and challenging times requires the ability to quickly adapt and maintain resilience as circumstances evolve. In this article Alyson Chadwick explores 5 actions for CEOs and C-Suite leaders to help navigate current market uncertainty and challenges whilst also helping to ensure you emerge stronger for the future.

Whilst uncertainty and change have become a constant in the business landscape, we still have some way to go to see how the economic landscape is going to play out here in the UK.

There’s been some good news and signs of optimism in current indicators with GDP returning to growth and inflation falling. But also some signs of caution as recent forecasts suggest a slower pace of recovery and return to lower interest rates than expected earlier in the year. And that’s before you layer on the impact of elections and other geopolitical events here and abroad. The pace and shape of recovery remains uncertain.

Here's 5 actions for you to consider to help you navigate current economic challenges and uncertainty more confidently

1. Explore key implications for your business through risk and scenario planning to adapt swiftly

Identify and understand the external trends which are relevant and key for your organisation - what’s happening now and what could happen in the future. As well as economic factors, these could include customer attitudes and behaviours (and ultimately spend!), supply chain impacts, regulation and competitor actions.

Identify the key risks for your organisation, their potential impact and how likely they are to happen. What are the biggest risks to your organisation? What are your mitigating actions? Be clear how you will track the risks and review regularly so you can stay agile and responsive as the external landscape changes.

Scenario planning involves considering multiple future scenarios for given variables such as economic trends, changes in customer behaviour, technology developments, and what you’d do in each case. It allows you to think how you would respond in advance of things happening - meaning you can move more quickly, build resilience in advance into your organisation and/or identify potential opportunities to position you more strongly for the future.

Identify potential scenarios that are plausible and would have an impact on your organisation. Construct what your potential responses and opportunities to them would be. As with risks, review and revise this regularly to identify potential new/changed scenarios as well as if any particular scenarios are materialising.

2. Retain a focus on your organisation’s Ambition and Goals

This is key at all times, but especially whilst navigating challenging times, to act as a ‘north star’ for what you do, provide context and balance for decisions and actions you need to take to ride through the current climate, whilst also helping you be well-positioned for the future. It also provides an anchor to empower teams across the organisation to be able to move swiftly.

Test that you are aligned as a senior team on what your Ambition is for the organisation and the Goals that together achieve it. If you already have this established, test that it’s still appropriately framed for the current climate – for example, is the pace at which we you can achieve still appropriate? Does the external climate impact any of the Goals you’ve identified? Do you need to revise any elements?  

Ensure focus on your Ambition and Goals remains present in the decisions and actions you may be taking shorter term - for example, is it still taking you in the same direction (albeit, maybe at a different pace) or taking you in a different direction? Also look to pursue potential opportunities for innovation and growth that make sense in the current context and will leave you stronger as we emerge from the current economic challenges. When reviewing and revising your plans, test that they are still heading towards your agreed Ambition and Goals.

Also keep an eye on remaining aligned to your Purpose and Values, and what your key stakeholders would expect of you. Actions carried out in conflict with them can lead to negative impact on reputation, particularly with customers and colleagues, with consequences for their loyalty, retention and future attraction.

3. Focus on costs whilst being mindful of impact on current and future performance

At times of economic uncertainty, focus will almost certainly turn to reducing costs. However, it’s important to frame this in a way that reduces overall spend whilst where possible not limiting future growth and efficiency.

Review all discretionary spend, and if appropriate more structural elements of the operating model, to identify areas to make savings. Test what the impact may be and look where cost reduction can be focused most effectively as ‘over-cutting’ may also lead to unintended risks. For example, imposing blanket freezes on recruitment or training can lead to key talent and capability gaps that could have a detrimental short-term impact on business performance. Assess alternative options to protect current and future performance, e.g. fractional hires rather than permanent full-time ones.

As well as cutting current spend, also explore opportunities to improve efficiencies to benefit the organisation in the long term as well as the immediate need. Identify where operational efficiencies can be achieved through targeted investment, for example, automating or streamlining processes, or further use of technology.

4. Keep colleague engagement and communication front of mind

Engaged colleagues have higher productivity and are more resilient to change, positioning the organisation to ride through the challenges more robustly. Maintaining regular communication and taking actions to support high levels of engagement are therefore vital in times of challenge and uncertainty.

Review current approach to sharing news about the business’ performance and plans, and whether this is sufficient to address any questions and concerns colleagues may have. Support leaders and managers in regularly listening to and communicating with colleagues to help address uncertainties and build trust. Openness and transparency where possible and appropriate are also key to this.

Keep colleagues connected to how their role and the work they do contribute to the overall delivery of the Ambition and Goals and performance of the organisation to underpin their sense of Purpose and motivation, and overall engagement. Many will know of the oft cited janitor at NASA when asked by Kennedy what his job was and his response “to help put a man on the moon.” Are your colleagues as clear on how their role delivers for example for the customer or to the organisation’s overall Ambition?

Provide support to colleagues to help them navigate changes and support their wellbeing during uncertainty. This could range from working with colleagues to equip them for specific changes being made, to other skills training, or access to mental health resources and employee assistance programmes.

5. Look after your own wellbeing as well as the business

Personal resilience and wellbeing are key to being an effective leader, especially at times of heightened uncertainty.  Finding ways to keep your own battery topped up is therefore vital.

As well as the usual elements of sleep, nutrition and exercise, what else will help support your personal resilience and wellbeing? For example, carving time out to think either on your own or with someone who can help you work things through such as a coach, or time to do other things that restore you, such as going for a walk. We’re all different, so what’s important is that it’s what works for you.

Photo by Katie Moum on Unsplash