Managing Business during a Pandemic downturn!
The COVID-19 Pandemic has an untold effect on Businesses the world over. While the world around was rejoicing after the 1st wave came to the 2nd wave, and the Businesses are facing down the barrel once again. Businesses are facing growing pressures and challenges from the marketplace as a result of the COVID pandemic.
The survival of many companies is at stake. Entrepreneurs are running out of time and cash.
At the same time, there is constant pressure to grow from all stakeholders. However, the business cycle in an Economy doesn’t always grow linearly. It follows an uncertain path.
There is the natural rise and fall of economic growth that occurs over time. The phase under which there is a fall of economic growth is known as Recession / Downturn.
An economic recession can have a devastating effect on the overall economy and for all its stakeholders viz. Employers, Employees, Suppliers, Government, Customers and the society at large. Among the employers, the most brutal hit are the small businesses.
Recessions are usually cyclical, as we’ve experienced numerous recessions over the last century. However, it is impossible to predict the depth, breadth, and length of the recession cycle and is usually challenging to manage.
The impact of an economic recession cycle is that it can have profound, long, painful, and lingering effects on business. The marketplace always looks somewhat different at the various stages of the Economic Business Cycle.
It demands different approaches, strategies to cope with growth, downturn & depression.
While individuals can’t impact recession or nothing can be done individually, they can still manage to minimize the impact on business. It requires the organization to be proactive and change and adapt to the market under its own terms upfront and don’t let the market force change on the organization.
Therefore as a business owner or manager, one needs to understand and capitalize on the established trends during the recession cycle. Pressures (such as the need to make quick decisions, adapting to changing markets and environment, handling newer opportunities, aggressive competition, coping with technology obsolescence, rising expectations from stakeholders, financial management, etc.) need to be quickly identified and acted upon.
It will require the Leaders to acknowledge the reality, redraw their strategies, reassess their strengths & weaknesses, use their resources judiciously, keep their employees & partners communicated, engaged and motivated for the challenges, dig deep into their reserves to fight and stay through the challenging periods and stay positive and optimistic. They need to be innovative, think out of the box, consult all their stakeholders, and chart the recovery path.
Many organizations start panicking and take drastic measures for the short term, which can cause damage in a long time. Most organizations see the Downturn as a Threat, while some others see it as an opportunity.
Here is an excellent example of an Optimist in Steve Jobs. Here is what he had to say on managing through the economic Downturn.
“We’ve had one of these before when the dot-com bubble burst. What I told our company was that we were going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time.” (Source – money.cnn.com)
Remember that it’s easy to Lead when the times are great, but it’s how you hold up in the face of adversity that really counts. Organizations that have survived the economic downturns and have learned from them have grown tougher and come out stronger after each economic downturn. Meanwhile, let’s stay positive and optimistic.
This, too, will pass.
Mr. Ramesh has served the H.R. and Businesses for 35 Years. He is a former V.P. of H.R. in Schneider electric and worked in Indian & Multi-National Companies in various capacities, including leadership role for the last 20 years.