Written by Qaiser Abbas
Whether it is the recent fallout from the war against terror or a series of other emergency situations that our country has dealt with in the past, life is always going to be challenging at least for the foreseeable future. The only option we have is to get used to it and deal with it.
Leading and managing business is never always going to be smooth sailing. All economies go through cycles as do most industry sectors from time to time. The good news is that despite the difficulties, certain companies have continued to perform exceptionally well in Pakistani environment over a number of years. The reason is simple, Pakistan is a large country with a massive and ever growing population, which creates many opportunities for businesses that are willing to take a long-term view and not be put off by the ups and downs that the country seems to go through almost on a regular basis.
If there is a secret to leading and managing your organization in difficult times, it is being prepared for such times. One of the key things that organizations need to do is to ensure that while times are good they set aside a sufficient amount of capital to enable them to deal with difficult situations or a slowdown in business when it arises. Having a war chest or a pool of funds that enable you to cope with the ups and downs of business cycles will ensure that while others are struggling, you will emerge as a stronger company, once things start to improve again. Accordingly, as the leader it is your responsibility to make sure that when things are going well the organization does not go and spend all available cash without thinking about the prospect of a downturn and putting aside sufficient capital for the inevitable rainy day. This is your responsibility to ensure that the organization remains viable for the long term.
That being said once the difficult times do arise what should you do?
Many leaders and their organizations are found wanting in such situations. The immediate reaction in such circumstances is to turn their attention to the accounting and finance department and ask for their recommendations on what needs to be done. Invariably the recommendations that come back resolve around a reduction in expenses.
Time and time again, I am amazed at the shortsightedness of many organizations when it comes to rationalizing their expenditure in difficult times.
The most logical thing to do is to adopt a strategic approach, focusing on high-value items and then progressively working through everything else to ensure that your efforts provide a significant saving for the organization and do not end up totally demotivating your staff and therefore encouraging them to leave and join your competitors.
In the following table I have set out some ideas as suggestions that you can focus on, when trying to lead the organization in difficult circumstances.
- Go back to the basics – you need to look objectively and strategically at the drivers of the business and understand the business model and focus on the profit drivers. This will enable you to pinpoint the right areas to focus on.
- Internal processes – look at all the areas where you can gain efficiencies, any improvement in internal processes and systems would surely help you to make your business more efficient and allow to manage things more cost effectively.
- Communicate – it is critical to keep the communication channels open with all the stakeholders when times are tough. It is all about managing expectations of your team,the investors, and all other stakeholders. As a leader part of your role is to make sure that everyone is aware why certain things are taking place within the organization and that they are put at ease about what it means to them.
- Balance the budget – as we have already discussed, it is important that you manage the finances in accordance with the revised expectations, so balancing the budget is indeed essential, but this should be done strategically and with one eye on the medium term.
- Continue to invest in people – my suggestion would be to continue with as much of your HR related initiatives that you can. Training and other activities should not be considered as things that you can be simply turned off and not have an impact on the organization. If at all possible (within the parameters of balancing the budget) you must continue with your HR related initiatives.
- Set the example – as the leader you need to ensure that you and your executive management team are setting the right example.
- Be positive – all business cycles eventually pass. So remain positive throughout the challenging times and treat this as the opportunity to make your organization into a more efficient and effective one.
- Be sensitive to people’s emotions – when times are tough, people and their emotions can often be overlooked. Whatever needs to be done, do it with due regard to people and their emotional well being. Even if you need to make tough decisions such as terminating people or reducing their salaries, there is a right way to do it.A fundamental point that I would like you to remember is that when times are good, don’t forget that things will not always stay the same. Good times don’t last forever and neither do difficult times. During good times, start preparing for the eventual decline that follows the good times.