How To Prepare Your Business As Worldwide Recession Looms

Published 27 - July - 2020
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By Steve Durbin, Managing Director, ISF and Forbes Business Council Member

The business world is facing a multitude of major challenges. Already frayed geopolitical relationships are coming under increasing pressure as the clouds of recession threaten a deep and lengthy worldwide economic downturn. Stakeholders and staff are looking to CEOs for answers and guidance on how to steer businesses through the storm and beyond. Calm heads capable of agile, efficient and effective management will prevail.

As the resilience of organizations is being tested as never before, leaders who have open minds, are committed to open communication and are willing to learn will win the day. When the storm has passed, it will surely leave a great deal of destruction in its wake, but it will also herald a new reality that necessitates lasting changes to the way business is done. Those who refuse to accept that things will likely never return to the way they were before risk being swept away.

The Forecast Is Bleak For Business

The National Bureau of Economic Research announced in June that the U.S. is officially in a recession. Set against a backdrop of strained international relations, businesses need to assess what impact this — and the worldwide recession — might have for them. For example, according to Business Insider, the U.S. and China “have stumbled into the early days of a new Cold War,” which could greatly impact the global economy.

Far too many companies take the modern supply chain for granted. Businesses have grown overreliant on technology. It has become the norm for products to be designed in California and assembled in China, with manufacturing taking place across Southeast Asia and other parts of the world. Technology supply requires a massive workforce and strong intellectual property that spans many borders. Employment is an increasingly contentious issue.

Managing In The Recession With Resilience To Risk

I believe companies should plan for a potential disruption to supply chains. Look for new vendors capable of plugging emerging gaps, and revalidate sources of components and manufacturing. Strive to build more resilient supply chains. Sourcing materials must be about more than cost. Reliability of service in terms of trust, collaboration and the way we work with third parties is coming to the fore.

As we slide toward recession, organizations need to reevaluate their risk resilience. Is your organization fit for purpose? Is it sufficiently adaptable to market conditions? Look at existing initiatives and plans, and assess what’s still relevant. What can be adapted, and what has to change for sustainable long-term growth?

Successful CEOs embrace change and transformation. They’re constantly in touch, asking themselves, “Am I doing the right things for my shareholders, for my employees, for my customer base so that I can continue to develop my business going forward?”

In examining strategic direction to see if it’s still applicable, most organizations will realize they need to be much more agile, efficient and effective at rolling out strategy in a responsive way. There’s an imperative now to act more quickly than they, perhaps, had originally intended, and the CEO must lead this drive.

Leadership Is Coping With Recession And Beyond

As a leader, it’s important to be a good communicator. Transparency is also essential because everybody is afraid. Nobody likes change. The job of a leader is to emphasize what is going to change and precisely how it’s going to change. You must explain the impact it will have on people and recognize that for some, it’s going to be a scary journey; accept that not everyone will complete it.

We need to collect as much competitive intelligence and understanding of what’s happening in the market to appreciate where your organization fits in the landscape. How do you compare with others in the same space? Are they doing it right? Is somebody else doing something better?

Accept that you’re never going to get it right 100% of the time, but when you get it wrong, remember that it’s a learning process. Few leaders embrace that idea because it brings a degree of vulnerability. We expect our leaders to be coated with Kevlar: Everything bounces off them because they’re providing the direction. But there’s a need for leadership that’s much more in tune with the feelings of individuals. In my experience, people respond well to that.

The New Reality

Be realistic in your expectations. The economic contraction we are currently facing is the worst since the Great Depression. We need to take stock as to exactly what the new reality might look like. Recognize that things will be turbulent for a while, and accept that change is vital.

Ensure that you have the right people in your organization doing the right things. This will require you to change your focus across the enterprise. You might have to move people into roles they’re unfamiliar with. You might have to let people go. No leader likes to have to do that, but if you’ve eliminated all of your other options and laying team members off is necessary, it’s important to be human about it. Explain your rationale, and leave the door open. Companies that succeed will continue to grow and might well need to rehire some of those people.

Finally, focus on where you’re going to get the best return for effort. Take time to understand how you can help customers navigate their way through present challenges and work more collaboratively. People have long memories. If you can help them negotiate the recession, your business will benefit greatly in the long run.

About Steve Durbin

Steve Durbin is the Managing Director of the Information Security Forum (ISF). His main areas of focus include strategy, information technology, cyber security and the emerging security threat landscape across both the corporate and personal environments. He is a frequent speaker and commentator on technology and security issues.

Steve has served as a Digital 50 advisory committee member in the United States, a body established to improve the talent pool for Fortune 500 boards around cyber security and information governance and he has been ranked as one of the top 10 individuals shaping the way that organizations and leaders approach information security careers. He has also recently been featured on the top 20 most influential list of leaders whose companies have a vision that shapes the conceptual landscape of their respective industries.

Steve is a Chartered Marketer, a Fellow of the Chartered Institute of Marketing and a visiting lecturer at Henley Business School where he speaks on the role of the Board in Cybersecurity.

How To Prepare Your Business As Worldwide Recession Looms
Read the full article on Forbes