How To Lead Employees Through A Company's Financial Crisis

In the aftermath of the 2008 financial crisis, many companies found themselves in a situation they were completely unprepared for. In the chaos of the crashing economy, CEOs and other leaders were forced to make some hard decisions and, under the pressure, many of those decisions turned out to be wrong, especially those dealing with employees. Management theorist Simon Sinek gave a great TED talk about how good leaders inspire trust and make their employees feel safe and a good chunk of those people could benefit greatly from hearing it. More than a decade later, business leaders have finally understood how important it is to have outstanding leadership skills in the time of crisis. We have gathered some of their strategies on how to lead your employees in case the worst happens. Hopefully, you won’t need it, but it doesn’t hurt to read about them, just the same.

Control the Chaos

Bad news rarely comes alone, the old saying goes, and in our hectic world, that is truer than ever. Once hits start coming in and the entire world seems to be crashing down on your head, it is vital to remain poised and collected and exercise as much control over the events as possible. You won’t be able to affect a lot of things, but you must try your best to affect those you can. The worst thing you can do is to start panicking. Once your employees catch a whiff of management’s panic, it is pretty much game over. In the modern corporate world, gossip spread like wildfire and you need them to hold down the fort and stay focused until you can manage reinforcements, not gossiping.

Stay Informed

Staying on top of things requires that you remain well-informed of every development that can affect your business. This is a good rule to follow even if you are not in a crisis, but if you are, it should be your top priority. The best way of doing that is by following reputable insiders, like AskTraders finance news. Sometimes, having a crucial piece of information just a few hours before the competition is all it takes to extricate your company from a crisis or even avoid it in the first place. We live in a digital age, where information is the most sought-after commodity and you should always keep that in your mind. 

Be Honest

Don’t wait until your employees hear that the ship is sinking from social media. That will cause a riot and only compound your problems. Instead, inform that of the current event and make sure they know that the management is doing their best to save the company and their jobs. If you manage that, your employees will spend their time doing their jobs, instead of searching the Internet, trying to figure out what is going on and whether they will have a job tomorrow to come to.  

Listen to Feedback

As the crisis unfolds, people will grow more afraid about their jobs and their future. Some of them will start to panic, some will even abandon you if they have a safety net or manage to find another job. Some, however, will use that fear as a motivator and force themselves into an overdrive. These are the people you need to listen to. Granted, not all of their ideas will be great or even plausible, but you never know when one of your employees will get an idea that can save your company. After all, these are the people who know your business inside and out and the best qualified to offer solutions in the time of crisis.

Cut Your Expenses

There is an art in reducing a company’s expenses and not everyone is talented enough to perform it. The key is to eliminate all money-sucking projects without jeopardizing the long-term stability of your business. The problem is that people who make those decisions are usually the ones who authorized those projects to start with, so trusting their judgment can be a risky move. That is why so many companies bring in outside managers to deal with a crisis. A fresh outlook on things is not just some corporate mantra, it is a well-known principle and something you should keep as an option if you can afford it.

Optimize the Workforce

This is your last option and you should reach for it only if all others have been exhausted. On paper, it sounds great, especially in the offices on the top floor. Just cut enough employees until the company starts turning a profit and all your problems are solved. It is not that simple, however. It may help you in the short run, maybe even save your business, but it is a double-edged sword. You will lose a lot of talent, skill, and experience, not all of which can be easily replaced. Often CEOs try this first without even exploring their options and are left wondering why the company is underperforming so badly, sometimes years after the crisis. Don’t make that mistake. If everything else fails and let go, people are the only thing that can stop bankruptcy, only then should you go for it.

Managing a company during a crisis is often an issue of getting out of your comfort zone. Things will get a lot worse before they start to improve and there will be plenty of unpleasant situations on the road to recovery. Not everyone has the stomach for it. One thing is sure, a crisis will test your mettle and help you discover what kind of a person you really are.

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