EP 32 - Leading Through a Recession
If you manage for long enough, you'll lead through a recession. And one's likely coming! But a recession is not the end of the world.
TRANSCRIPT
LEADING THROUGH A RECESSION
If you manage for long enough, you'll lead through a recession. And one's likely coming! But a recession is not the end of the world.
Hewlett Packard started in the late 1930s. Microsoft in the 1970s and Uber in 2007, and these were all deep, painful recessions.
A recession brings a lot of change, unpredictability and surprises; not to mention a lot of confusion, misreads and mixed messages.
This is when the real leadership talent is going to thrive and advance in their careers. They always have, and always will!
The US military calls this leadership challenge 'VUCA”. It's an acronym for "Volatility", "Uncertainty", "Complexity", and "Ambiguity".
That's the post- Cold War world that military officers have been leading through, and it's the world business leaders are facing today.
Expect the FED to continue raising interest rates, and the stock market to be very volatile. Companies will be much more cost conscious, which will lead to restructuring and reorganization.
The stress on management teams will increase, but this is a huge opportunity!
A high tide raises every ship, and a lot of companies have been enjoying the favorable market conditions. Warren Buffett said, "you don't know who's swimming naked until the tide goes out". Well, the tide is going out. So what should leaders do now?
You should focus on three things. Focus on priorities, processes and progress.
In a VUCA world, you don't focus on the month, the quarter or annual targets. You focus on what's right in front of you! You “win-the-day” by focusing on immediate priorities, processes and progress.
Your leadership style has to be more hands on; and I don't mean micromanaging. You can eliminate the clutter by clarifying “priorities”. You can focus on execution by simplifying your “processes”, and you can build momentum and confidence by focusing on “progress”.
You can't live in the past and you can't worry about the future! You have to focus and lead through the moment at hand, and that's what 'winning the day' means.
Remember, you can't control the world around you, but you're still “in control”. You can control what you choose to focus on - meaning your priorities (and your team's priorities).
You can control your habits and routines, meaning your processes and your “team's processes”, and you define what success looks like.
You can embrace the progress that you’ve made. You can focus on the next immediate milestone and not get overwhelmed by longer term goals.
In a VUCA world, longer term goals provide direction, but daily process goals are going to fuel your success.
The leaders and teams that “win each day” and keep “stacking good days”, day after day - they're going to thrive in this recession, and they're going to come out of this VUCA world stronger than ever.