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September 28, 2022

When the Going Gets Tough, Smart Leaders Double Down on Their People: Three Tips for Managing Teams in a Recessionary Environment

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Today’s worker has a lot to think about. Supply chain shortages, ever-increasing prices, the ongoing pandemic, and now, a potential recession. How can leaders best manage their people during such an uncertain time, or more specifically, when a recession seems imminent? When navigating a (pre) recessionary business environment, leaders should focus on their most valuable asset: their people. How can you empower your employees to work efficiently, communicate effectively, and chart their career path during a challenging time? What steps should your teams take to proactively plan for a recessionary environment? And what, if any, silver linings can your company embrace? Here are three things to consider.


Re-Assess, Re-Prioritize, and Re-Plan

One could argue that recessions are a normal (and cyclical) part of the business landscape. That said, the first question most leaders ask when faced with a looming economic slowdown: “How am I going to handle this?” Companies such as Airbnb or Amazon who see revenue growth during a recessionary period are in the minority; most companies, however, are not in this position and should prepare for a slowdown.

Your head of sales may see more lengthy sales cycles and your finance chief may notice other signals in the market. Be proactive about recognizing any changes that may affect your company and have an open dialogue with your team about next steps. While your team leads may have developed their yearly plans months ago, everyone must be flexible and not “tied” to those pre-recessionary forecasts, numbers, and resources. This is the time to rework those plans and readjust numbers.


Your sales lead may adjust their revenue target from $10 million to $7 million and work from that new baseline to adjust the other portions of the sales plan (customer segments, team resources, tactics, etc.). They can also work to shorten sales cycles by making changes to the sales process, for example, delivering faster, better information during the sales process. Also, you may need to evaluate product offerings and services to ensure they still meet market demands for your clients.

Author and Innosight Managing Director, Scott D. Anthony, advises organizations to re-assess cut costs like decreasing your innovation portfolio by 50% to ensure resources are being utilized where they make the most impact for customers.

In other words, you cannot apply the “usual” plan to a recessionary environment and expect the same results. Planning also helps your organization remove the “unknown” from the downturn equation, putting you in a proactive rather than reactive stance.

As You Plan, Look Through a “People-First” Lens

In addition to developing your “recessionized” business plans, take care of your team. What does this mean? First, listen to your people and work to anticipate their needs. Even if you can avoid downsizing, you should deliver resources for skills training, communication, and productivity. This could come in the form of personalized, 1:1 coaching that helps people communicate more effectively as a manager, better manage their time, or even cope with added workplace stress and change.

Financial downturns often require employees to work harder and do more with less. Support in the form of coaching can help people skill up and be more effective in their role or roles (if they are asked to take on additional tasks). If a manager quickly shifts from five direct reports to nine, personalized coaching can help them absorb this extra responsibility more easily. This guidance can also teach people to communicate effectively: managing up, down, and sideways about revised company goals, progress in meeting these objectives, roadblocks, etc.

Coaching can also help people frame these new, added tasks within a greater leadership and career path context. Ultimately, you are empowering people to help themselves (which, in turn, strengthens the organization in this new “more-with-less” environment).

As you further examine team structure, resources, and organizational needs, do not neglect team-building activities. During a downturn, leaders often strike team-building get-togethers or events as extraneous or unnecessary. But this is the most important time to invest in your team, as teamwork bolsters resilience during difficult times. Remember that this is the team that will take your company through this difficult period.

Look for the Silver Linings — As Well As Opportunities to Innovate

Paul Romer, Stanford economist, once said, “A crisis is a terrible thing to waste.” He is right. Economic downturns and recessionary periods can present unique opportunities to innovate. In fact, the 2008 recession saw the development of several disruptive, market-changing startups that have since become household names, including Dropbox, Uber, and Venmo.

During even the most challenging times, you can still innovate.

Research has proven that individuals with a growth mindset are more mentally capable and willing to tackle challenges, receive and share feedback, incorporate and execute on problem-solving strategies, and be productive and persevering in accomplishing their goals.

A downturn is a time for reassessment and creative problem solving. Are there now gaps in your particular market that need to be addressed? Is there a new approach to solving an existing market problem, and can your team develop that problem-solving product or service? Even within a recessionary environment, there are still projects to drive, discoveries to be made, and positive results to achieve.

It has been said that the best leaders adapt at the speed of change. This can also be said of any employee. A recessionary or pre-recessionary business environment requires that an organization embrace flexibility, resilience, and optimism. Smart companies will do this by focusing on their people, and arming them with the tools, training, and support they need to deliver their best work amidst an environment shaped by uncertainty, challenge, and constant change.

Ravi Swaminathan is founder and CEO of TaskHuman, a real-time digital coaching platform that connects each employee 1:1 with a global network of coaches over video call in nearly 1000 topics of daily work and personal life.

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