Modern enterprise leaders are grappling with the reality of political uncertainty and economic meltdown. Through a strategy that combines effective communication, proactive planning and business innovation, they’re turning that uncertainty to their advantage. . .
Brexit was the catalyst, followed by the Covid-19 global pandemic. And just as the world was beginning to emerge from lockdowns, inflation, supply chain problems, and energy price increases struck. Despite reports pointing towards a more positive outlook earlier this year, with WARC reporting extraordinary ad spend growth during the Covid-19 recovery phase, these combined major events are proving to be too tumultuous for many industries still.
According to reports by Goldman Sachs, the UK economy will experience a recession in the fourth quarter of this year, and three out of four Fortune 500 CEOs are reportedly preparing for negative growth by the end of 2023. With an average recession lasting 11 months, how are business leaders preparing? Three leaders weigh in from their experience.
Communication Will Remain the Key to Navigating Crises
Leaders will find it particularly hard to manage the expectations of staff, clients, investors and other stakeholders during a recession. Having a clear plan of communication, with detailed and well thought-out short, mid and long-term strategy, will not only calm fears but also help you steer through the headwinds and emerge safely on the other side of the recession.
Commenting on the key role of communication, Will Brookes, CEO of Raconteur, said,
“Leading can be difficult at the best of times, but leading during a recession is when you really prove your worth. While ‘keep calm and carry out’ might be the outward demeanor, it’s never too early to get serious and prepare to support both your staff and consumers.
“Focus and communication will be key, with your staff, your stakeholders and your clients. We all know marketing is often the first budget line to be cut in a crisis, but advising your clients to adapt their plans for the short-term rather than cut, will ensure they keep their corner of the market post-recession.”
Build a Recession Strategy to Manage Costs Will Save the Day
While clear communication can allay fears and improve business prospects, businesses will still need to focus on managing costs. A recession strategy that accounts for the ebb and flow of the market and optimizes spending and overheads will take you a long way.
Michael Richards, Chief Growth Officer of alan.agency, who has weathered a few recessions in the past said:
“Recessions are truly painful, but they are a recurring part of the economic cycle, and as a leader ensuring you’re prepared for market ebbs and flows (or peaks and troughs) is all part and parcel of the job.
“Have a well-defined plan in place, manage fixed costs well, focus on what you’re best at (don’t get distracted by the ‘new and shiny’) and be flexible and empathetic with your team and clients. It’s important to try and carry on ‘business as usual’ but be realistic and as transparent as you can be – this will help you be in the strongest place possible to successfully navigate the next recession – which will inevitably come.”
Recessions are truly painful, but they are a recurring part of the economic cycle, and as a leader ensuring you’re prepared for market ebbs and flows (or peaks and troughs) is all part and parcel of the job.
Chief Growth Officer, alan.agency,
Knowing Your Brand Value & Innovating Constantly Will Help You Succeed
Above all, during a recession, knowing your brand’s value and being able to strategically deploy it can be a game changer. Brands that thrive during crises are not hemmed in by their own legacy. They constantly challenge themselves, innovate and find ways to turn uncertainty into advantage. Speaking of the same, Gonzalo Brujo, Global CEO of Interbrand, had the following to say:
“Over the past decade, we’ve seen and felt the forces of a new force in business; companies whose growth far surpasses all competition – with no signs of slowing down even through a recession.
“The leaders of these giants understand how, where and when to deploy their brand as an asset against emerging customer needs, in a landscape and context that changes all of the time. These companies aren’t contained by sectors, silos, or swim lanes. They transcend traditional category thinking.
“Built on a foundation of exceptional products and emotionally meaningful customer relationships, these companies move in multiple directions. They use the utility and equity in their brand to drive exponential growth in new spaces, whilst continuing to capitalise on existing incremental sector gains.
“The leaders who manage their businesses in this way are able to leverage their brand, and the emotional connections they have with their customers, to move into new spaces – and are able to outperform their competition and thrive in multiple markets or sectors.
Brujo also emphasised the need for a clear strategy:
“Leaders must not shy away from expanding their business model in a time of crisis. They must have a clear strategy with defined costs and processes, be transparent and flexible with their employees and clients, and create emotional connections with their customers to support them through turbulent times. Meaningful connections drive customer acquisition, loyalty and advocacy.
“Taking the time to fully understand how the recession is impacting consumers will be key for brands to maintain those meaningful connections when we come out the other side. If all of these things are done successfully consumers will continue investing and believing in the brand too.”
The Path Ahead is Open for Enterprises
It’s clear that we’re looking at tough economic times ahead. But that need not dampen the prospects for growth. Through a strategic approach which focuses on communication, forward thinking and innovation, business can not only survive but thrive. Even during the hardest of times. However, it remains to be seen which brands will do so.