I recently ran a coaching session for a management team to explore managing in a downturn.
The session encouraged the managers to step back from the day-to-day operational activities and take some time to think about what a potential market downturn might mean for them as a business; where they may focus their efforts to minimise its impact and whether they may take advantage of the situation by playing a better game than the competitors.
It was a great session and an interesting example of big-picture thinking and corporate planning. The focus was on what a recession may mean for their business, how it may affect them, what will be within their control, what will be outside of it and, based on this, what plans they should put in place to deal with such a contingency.
This big picture or strategic thinking often doesn’t get the time it deserves in busy diaries, and as such, we fail to plan for likely future events.
However, it is also the case that when we fail to plan, we plan to fail!
On 2 January, The Guardian reported that the IMF Managing Director Kristalina Georgieva had warned that a third of the world economy would be in recession in 2023.
The article explained the reason for the recession as follows:
“The IMF cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine as well as inflation pressures and the high interest rates engineered by central banks like the US Federal Reserve aimed at bringing those price pressures to heel.”
So, what should we be thinking about in response to the IMF’s predicted recession?
Also, do you think there is going to be a recession and what have you done to prepare for one?
PWC has designed and published a simple framework (see below) with ten fundamental priorities to help guide your thinking about managing in a downturn.
Whether yours is a charity, public or private sector organisation, the ten fundamentals apply, as they all require a proactive approach to managing in a downturn. None of them suggests it is sensible to sit back and wait to see what happens.
They are also cross-organisational, involving operations, finance, internal and external communications, stakeholder management, planning and other organisational activity.
How are you going to engage and facilitate this programme of work?
For some, this won’t be the first recession that has been worked through. Many of us made it through the 2008 banking crisis following the Lehman Brothers collapse.
What did you learn from that experience that may be of use in preparing for the IMF’s predicted recession?
There is a great deal to think about here.
When are you going to start with this potential scenario, how are you going to make time in your diary to consider it and what are your plans to encourage colleagues to do the same so that you don’t fail to plan and plan to fail?
I hope the above is useful and thought-provoking.
As always if you have any questions feel free to get in touch.
From the author:
As coaching is not an advice-giving service, these blogs are not written with the intention of proposing solutions to common leadership challenges. Instead, they are thought pieces with the aim of prompting the reader to think more deeply about the topic and reflect on whether it warrants further exploration, with or without a coach.
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