Your Company's Responsible Guide to Staying Productive and Profitable During a Recession From strategic budgeting to remaining true to your company's mission, this guide will help you remain hopeful and pragmatic during periods of uncertainty.
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The recent trend of easy money and exorbitant valuations has skidded to a halt amid recent economic volatility. Understandably, many companies rode that wave as long as they could, but in doing so many prioritized growth over sustainability and sound leadership. Layoffs continue to ripple through the tech ecosystem, so employees both in this sector and elsewhere are feeling the consequences.
Having to let go of staff members is all but unavoidable in a company's lifecycle, but there is always more that can be done to keep businesses afloat while preserving morale. Strategies can include responsible budgetary decision-making, thoughtful and prudent responses to external pressures and transparent dialogue with employees, to name a few. Such actions can help companies remain healthy, productive and profitable, even as they navigate challenging waters.
Responsible budgeting
Corporate entities and the executives who run them are obligated to act as responsible stakeholders, which means holding themselves accountable when it comes to spending. Prioritizing a sustainable budget — one that can fully support business functions in both good and bad economic times — will help executives allocate resources effectively.
A personal example: While much of Israel's tech scene operates out of pricey Tel Aviv high-rises, my company is based in Ramla, a small town outside of the city. It isn't glamorous like Tel Aviv, but rent is a fraction of the price, and lowering that expense has markedly improved our ability to offer employee perks and other benefits that make a financial impact on their lives. It has also kept us in a place of relative stability and security, even when markets are in flux.
Related: Cutting Costs And Managing Expenses As A Business: The How-To
Another benefit of working outside the major metropolitan bubble is that our company has been able to recruit a diverse employee base, one that includes people from all over the cultural and socio-economic spectrum, and who might not have otherwise gotten the same chances in the highly-pressurized Tel Aviv tech scene.
Responsible business leaders aren't necessarily those who throw their staff members the most decadent parties; they're the ones who maintain careful and consistent budgets during the best of times, and so don't necessarily have to revert to layoffs when things take a turn for the worse.
Break through the noise
It's possible to be both a realist and an optimist: the two are not mutually exclusive. As business leaders, we set a tone that's felt across teams, so executives with their sights set on longevity must strive to blend the realism of recognizing that bad days may be just around the corner with an optimism that strives to make those tough days a little better.
From the very first signs of economic turbulence, my leadership team started fielding comments from numerous stakeholders that voiced valid concerns and suggested certain precautionary changes. Our leadership team values this kind of input and guidance from outside counselors and collaborators, of course, but it is also of the utmost importance to break through the noise and stay true to ourselves, even as we address external concerns.
A responsible company that plans for and executes growth with patience and poise will always have the option to forge its own path — will insist upon remaining informed, but never overwhelmed by outside forces. We have not always made the most popular or predictable decisions, but rather the ones that are right for us, our employees and ultimately our customers.
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There really is no "I" in "team"
This is a cliché, to be sure. That said, it is an enduring truth that a company's victories and losses should be felt as a cohesive unit. To empower employees, as well as establish and maintain trust, a good executive must incorporate a breadth of ideas and opinions into strategy. Unilateral decision-making without widespread transparency and open dialogue — among executives, shareholders and employees of every status, as well as customers — will only lead to a breakdown of trust when tough choices are being made.
While it's ultimately the executive team's prerogative to execute big decisions, involving employees throughout the process will foster a sense of agency, inclusion and responsibility that bolsters growth in business KPIs, certainly, but also morale, synergy and trust. By making a concerted effort not to enact important decisions or changes in a secretive, unexpected or unilateral fashion, staff members will have no reason to be surprised or panicked about where their company is headed.
Related: 6 Ways to Encourage Successful Teamwork in Your Business
The pendulum always swings back
When the economy is at either extreme, it's easy for companies to get caught up in the moment and make choices that, while suited to the present, aren't sufficiently recognizing of the future. In these instances, the ability (and the responsibility) to be proactive and thoughtful lies with the leaders in charge of making tough budgetary decisions.
As an executive, my mindset has always been to be realistic and circumspect about how our company operates and how to grow it. Thankfully, my stakeholders, shareholders and employees have supported me in this approach, and that has enabled the company to not only float upwards with the bubble but to continue hiring employees even after it occasionally pops.
