After years of steady growth, the global economy appears set for a slowdown and possibly a minor recession in 2020.
Last month, Vistage’s monthly CEO survey revealed the lowest levels of economic confidence in years and ITR Economics told members to expect a downturn in late 2019 and through 2020. Meanwhile, YPO members reviewed the global forecast with economist John Mauldin, who also shared the many factors pointing to an eminent recession.
Conventional wisdom says: “Batten down the hatches. Time to play it safe.” I’d argue exactly the opposite. The impending downturn offers a golden opportunity for smart, growth-focused leadership. The best CEOs understand how to navigate through turbulent times and can use a slowdown to their advantage.
Here are three key areas of focus that will help you keep a growth mindset during a downturn:
- Communicate with your team regularly
When you’re flying and experience turbulence, you want to hear from the pilot. “Hi. It’s your captain. I wanted to give you a heads-up that we’re expecting some bumpy skies for the next 15 minutes. Nothing to worry about — it’s pretty common for this time of the year.” That simple message puts everyone at ease.
Unfortunately, many leaders — like bad pilots — fail to communicate with their teams during turbulent times. Instead, they hunker down, hold closed-door meetings with their senior team, and become unresponsive, not returning phone calls and emails so that they can focus on the issues at hand. Meanwhile, the team starts making up theories and stories about what’s going on — tales typically much worse than reality.
This impacts everyone’s performance. Instead of doing their best work, team members are worried about what’s going on in the company and how it might impact them. They’re like passengers on a shaky plane — they want their leader to stand up, acknowledge the situation and articulate a plan.
To keep communication lines open in both downturn and upswing economies, consider these tactics:
- Hold an annual meeting where the entire company gets together to discuss the vision of the year to come
- Host a retreat for managers to establish goals and key initiatives and develop a roadmap for getting the work done
- Have consistent monthly company meetings to report on how the company performed in the previous month and plans for the month ahead
- Meet with your senior leadership team weekly to focus on how you’re doing with your quarterly goals and work together to fill in any gaps
- Step away to take time to think
Most leaders spend the majority of their time reacting to the issues of the day rather than focusing on the strategic actions that will help grow the business. They work “in the business” instead of “on the business.”
To break this habit, it’s important to schedule in time to think big picture. Give yourself a full day per quarter to ask the big questions. Where do you want to be 12 months from now? What are your revenue and profit goals? What are the things you need to guarantee you achieve those goals?
Determine the three or four most meaningful, meaty and measurable actions you can take to ensure your success. Now, get back to work and spend 80% of your time working on those areas you identified. Of course, that’s easier said than done. You’re going to need to take a hard look at your current plate and determine what gets dropped, what gets delegated and what takes a backseat to your top priorities. It’s a challenging but necessary exercise if you’re truly committed to growth.
- Stay close to your key relationships
We all know that customer retention is just as important, if not more important, than new customer acquisition. This is especially true during a downturn, when bringing in new business becomes even more challenging.
Who has the relationship with your key customers? To protect, nurture and grow your key business relationships, it’s essential for you, as the CEO, to be at the center of the most important ones. Many CEOs delegate or abdicate these key relationships, and they’re developed over time without the leader’s participation. It gets comfortable having someone else manage the relationship. What happens when the team member leaves for another company?
Take it upon yourself to nurture those critical connections and get to know the main players in your key business relationships. It’s one thing to make the effort to own the relationship by spending business time with an important customer, but it’s another thing to go beyond and build a truly deep relations with a personal connection.
Remember: The deeper the relationship, the longer it will stand the test of time — and the more likely it won’t be adversely impacted by swings in the economy.
With a 2020 downturn expected and an even bigger recession predicted within the next decade, now’s the time to commit to these three leadership strategies. Stick to them and you’ll not only navigate your company through challenging times, but you’ll have created a solid foundation for growth.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. His firm coaches over 170 of the world’s top high-growth entrepreneurs and CEO’s from over 20 countries on how to dramatically grow their revenues and profits, implement the most effective strategies, becoming better leaders, grow their people, build accountability systems, and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 350 CEOs and entrepreneurs in more than 20 different countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from $20 million to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for 4 years or more have experienced an average revenue CAGR of 40.1% during their time as a client, more than four times the national average. Additionally, clients have averaged 210% growth in profit while working with the firm. For more information, please visit: https://www.ceocoachinginternational.com