Leading Through A Challenging Economy
The Australian economy is facing some challenges.
We're seeing more small businesses close, interest rates remain a consideration and the investment environment continues to change. Political policy is also influencing where organisations choose to invest.
For leaders, this creates uncertainty, but it also creates an opportunity to pause, look closely at the organisation and get back to the foundations.
The below offers insights into leading through a challenging economy.
1. Get The Core Right
The first step is to really understand how your organisation operates today. Look closely at the processes, activities and costs that sit underneath the business.
What can you eliminate?
What can you simplify?
What can you automate?
There will often be processes that have grown over time and are no longer adding the value they once did. Simplifying these can reduce cost, create capacity and allow your people to focus on what matters most. This is the foundation of my strategy triangle.
But getting back to your core doesn't mean ignoring what's happening outside your organisation.
Look at adjacent industries, understand what innovation is emerging and consider what your competitors are doing differently. Don't ignore the innovation happening around you. The opportunity is to get back to your core and do it really well, while continuing to understand what's changing around you.
2. Bring Your People With You
The second consideration is how you communicate the current situation to your people. When organisations are facing difficult decisions, acknowledge the contribution people have made in the past. Recognise what has been achieved and the role people have played in getting the organisation to where it is today.
Then clearly explain the present, using data and practical insights to help people understand what's changing, why it's changing and why action may be required.
But communication shouldn't simply be about telling people what's going to happen. Give your people the opportunity to help shape what comes next.
Co-creating initiatives for the future can create greater ownership and turn a difficult situation into a shared challenge. Leaders don't have to have every answer themselves.
3. Think Carefully About Your Roles
When OPEX is under pressure and expenditure needs to reduce, organisations often look towards restructuring. This is where my Rule of Thirds can provide a useful way to think about roles and capabilities.
One third may be technically critical and another third leadership and management critical. These are capabilities you want to retain. The final third may include supporting roles that are less critical to immediate priorities, where rationalisation may need to be considered.
Challenging economic conditions require leaders to make difficult decisions, but they also create an opportunity to simplify and focus.
Get your core right, bring your people with you and think carefully about where your organisation needs to invest, simplify and evolve.
If you would like to explore how these ideas could apply to your organisation, feel free to reach out.
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