Recession-Proof Your Company
“It was the best of times, it was the worst of times...” An oft-mentioned quote of Dickens feels highly appropriate at present. Less ‘A Tale of Two Cities’ and more a tale of two economies. Technology companies are conducting layoffs of between 5% and 20%...but tech is only 9% of the US GDP and the US unemployment rate is the lowest it has been in 50+ years (1969). Inflation is at 41-year high…but inflation has been declining every month for the past six months. With all these mixed signals, it can be difficult to know how to plan for your company’s future.
At Turning Point, we believe that you can help make your business Recession-Proof by adhering to these principles.
Make a Plan by Predicting the Future
Companies are like ships; they can enter rough waters quite suddenly. They are also like ships in that, if you’re able to react quickly, you can more easily steer them out of harm’s way. Creating budgets and updating them swiftly with actuals allows you to react to changing factors more immediately. The faster you can have the information that assesses where you are, the faster you can make decisions about your progress. As they say, “Hope is not a strategy”. Your financials compared to your projections allow you to see exactly how you are performing against what you believed would occur.
Reinforce a Strong Culture for Greater Productivity
A strong company culture is not just a competitive advantage, it’s a financial one too. Forbes reports that, “Companies with strong cultures have seen a 4x increase in revenue growth.” Furthermore, The Harvard Business Review says, “a high sense of belonging can result in a 56% spike in job performance, a 50% reduction in turnover risk, and a 75% reduction in sick days.” With unemployment at a 50+ year low, you simply have to be a place where employees want to work. The market is just too competitive for anything else.
Employees must feel valued, know they are learning and growing, and feel a strong sense of community. Make sure your idea of the company’s values and objectives are shared throughout the organization. As a CEO, it’s easy to write off certain employees as the difficult type, but those counterproductive behaviors and negative attitudes can become the company’s culture if you’re not careful. Play an active role in your company’s culture. You must lead by example.
Embrace and Practice Diversity for Increased Profitability
The results are clear and powerful that diversity in the workplace is a powerful driver of success. According to McKinsey & Company, the most diverse companies outperform their less diverse peers by 36% in profitability. If you want your company to perform better, be sure that diversity is part of your team and your leadership. And if it’s not, you must actively work to recruit and retain diverse talent.
Be Innovative and Hold Teams Accountable
Harvard Business Review reports, “In the weakest teams, there is no accountability. In mediocre teams, bosses are the source of accountability. And in high performance teams, peers manage the vast majority of performance problems with one another.”
Building a culture of peer accountability means that everyone must be clear about what the goals are and how they are interrelated. Goals must be clearly stated and broken into quarterly deliverables for each member of your management team. Your leaders should report on their progress regularly and together, so that they hold each other accountable. This will help your company achieve the gold standard of peer accountability.
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Uncertainty is sure to be part of the equation in 2023; the better you can execute on these fundamentals, the less risk for your business. If you could use a partner in any of these areas, please reach out to the leadership at turning-point.com. Helping businesses live up to their potential is what we strive to do daily for all our clients. We support 100+ companies on a monthly basis. Find out how we can support you.