Tough times come to all businesses, but as director Doreen Yarnold says, a good leader can minimise their impact.
In all business markets across the world, tough times come around with almost predictable frequency.
In the course of our work at Leading Results, we have witnessed a stark difference between how the best and worst leaders behave during those difficult situations.
The best leaders tend to get much closer to their business. Not in the micro-managing sense, but by communicating more and keeping their team in the loop with what they need, or want, to know. They anticipate market movement, identify their key players and place people and customers at the heart of their business. They are already results focused, but during tough trading times they become even more so.
These leaders do not waste valuable time procrastinating, but give due consideration to decisions and then take action decisively and confidently. Even the best leaders sometimes get it wrong, but they learn from their mistakes and don’t repeat them.
When times are tough, clear direction is essential and the best leaders ensure that every person under their responsibility has distinct, achievable and stretching objectives that are reviewed monthly. They are visible and accessible to everyone in the business, and ensure that front-line staff are consistently forging strong customer relationships.
One of the biggest mistakes organisations make during tough trading times, is trying to fix everything by doggedly sticking to a long-term strategy that was conceived years ago, when a more expedient approach is required for the here and now. Add to this, the tendency to cut staff costs to the bone and you have a growth-stifling recipe for failure.
In tough times, less is more. Consider rallying your senior management teams and their troops to adopt a laser focus to just the key deliverable areas. Keep it simple, limiting the number of focus areas to 4 or 5 max. For example:
- Finding and driving profit opportunities
- Giving customers a first-class experience and insisting on this from everyone who is customer facing
- Investing more time in staff
- Increasing the awareness of the business in the local community
Set clear operational guidelines that spell out:
- The current trading situation
- Why it is a problem
- What you’re doing about it
- What’s expected of every senior manager, middle manager, team member
- The areas identified as being key to turning the business around
- How the other ‘normal’ operational areas will be managed
It is not easy
Successfully implementing these steps is not easy. They are dependent upon the determination of the leaders and the departments within the organisation. The key message is to focus on those things that will drive results (financial, customer, team development, the market, keeping the sales funnel fed etc.) and nothing else. Don’t get distracted.
Spending time developing line managers so they know what they’re doing, why they’re doing it and how to do it is also pivotal. This is also a time when a thick skin is desirable, mixed with a high degree of the ‘human touch’. Nurture and protect the trust and respect you have already earned.
Be a fire-lighter, not a fire-fighter
I once read the following definition of focus: ‘Having fire in your belly and ice in your head’. It resonated because in tough times, this is exactly what is required. You need to feel the sparks in your gut that drive the desire to right what’s wrong – and light fires in others. But you also need the cold, steely determination to execute and see it through no matter what.
Businesses fail in tough times when they are fire-fighting. Senior managers and directors give poor direction and make reactive, knee-jerk decisions.
Don’t cut staff until there’s no other option
I’m not saying don’t make redundancies (sometimes this is unavoidable) but don’t do it without really considering the implications. These include what redundancies will mean to those left as well as the impact it could have on customers. We have seen businesses cut too quickly and stifle their ability to trade effectively as a result. If you really need to cut, give careful consideration to which roles you do decide to get rid of.
Keeping the sales funnel fed
The initial impact of a difficult trading period is often only noticed when the lower volume of enquiries and leads coming into businesses becomes evident.
The best leaders leave nothing to chance. They have a rigorous lead management framework in place with lost sales measured so there is an ongoing level of intelligence about what the market is doing and why customers are not buying. They find out what customers are buying and bend and flex their marketing approach to align with this.
The worst leaders check very little, believe what their middle managers tell them and make assumptions all too often.
Focus on front liners
Your front-line people are responsible for managing and influencing your customers and prospective customers. The front-line staff of poorer performing businesses are often just not hungry or trained enough to do what is required of them.
The best leaders spend time developing front-line staff – finding out what is working and what is not – and doing something about it.
Just 1% more
Great leaders go for increases and improvements just 1% at a time. Consider your core KPIs and calculate what just 1% difference would make to each one. Share these with your line managers and ask them to share them them with their teams. For most people just a 1% increase is doable. Acknowledge the improvement once achieved, then go for the next 1%.
In summary, identify the key elements that will help you ride the upheaval tough trading times bring, focus on less but focus hard, involve your managers and your teams, never compromise on customer experience no matter how tough times are, and do everything in your power to keep your sales funnel healthy and your leakage and lost sales to a minimum.
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