In December and January, we focused on strategic thinking and leadership. For this month and the next, we’ll shift the focus to a new topic that’s on a lot of people’s minds at the moment: economic uncertainty.
In this post and the three that follow, we’ll offer tips for effectively managing employees during times of uncertainty—and how to take advantage of it so that you can eventually come out ahead.
It’s not exactly news to point out that the global economy is putting out chaotic signals. Inflation, while lower than it was at its peak last June, is still running hot. Many sectors of the supply chain are still a tangled mess.
Financial markets have been up and down, with seemingly little rhyme or reason (To wit: barely two months after hitting rock-bottom, Meta stock gained $100 billion in a day).
And the recent waves of mass layoffs in the tech world—many at seemingly bulletproof companies like Alphabet (Google), Amazon, and Microsoft (not to mention Meta)—are reverberating far beyond Silicon Valley. In light of these recent events, many people, even those with secure positions, are understandably nervous about what’s to come long term.
9 Out of 10 Americans Are Worried About the Economy
Whether a financial crisis or less severe economic downturn truly comes to pass, or whether you personally think talk of a recession is overblown, it’s useful to remember the timeless truism that perception is reality.
So if a topic is in the media, it’s either a) an expression of legitimate concern or b) shaping up to become a new concern. Either way, it’s worth taking this topic seriously.
Navigating Economic Uncertainty With Strong Leadership
Effective leadership is kind of like marriage: it has to be present in good times and bad. To that end, here are five tips for helping employees navigate times of economic uncertainty.
1.Don’t make promises you can’t keep
This is an excellent rule for navigating life in general but takes on new importance when you’re faced with managing other humans at work. I get it: it’s tempting to tell everyone that things will be okay. When employees seem worried, you can’t help but want to reassure them.
If you know for a fact that their worrying is unwarranted, then go ahead and tell them that. They’ll love you for it! But if you just don’t know, or have a hunch that things may not be okay—that layoffs or some other majorly stressful event might be on the horizon—don’t pretend everything is just fine.
Source: Pexels
Try your best to resist the urge to make everyone completely comfortable. Attempting to “stay positive” in the face of adversity is okay, so long as you’re also realistic—and above all, honest. Employees respect someone who gives them bad news or admits they just don’t know much more than someone who tells them what they want to hear, only to backpedal.
2.Be empathetic, not self-aggrandizing
Last summer, the CEO of a small social marketing company laid off two of his 17 employees. What should have been a somber internal affair, however, made it to international news when the CEO posted about it on his LinkedIn—along with a teary selfie and a tortured confession about how hard the terminations were on him.
While he may have meant well (despite his incredible clumsiness), with his posting he instantly made himself the internet’s villain of the week, with thousands of users on LinkedIn, Twitter, and Facebook holding him up as an example of what not to do during a layoff.
(A lesson others apparently still have to learn; at the end of January, another CEO was forced to apologize after quoting Martin Luther King, Jr. in a layoff email.) The episode even “inspired” a story in the New York Times, “When Your Boss Is Crying, but You’re the One Being Laid Off.”
Companies get into trouble. And sometimes they need to be restructured or worse, which may mean layoffs or some other sort of reshuffling. (And these challenges require their own effective change leadership.) That’s just the nature of the game. It’s not fun; if laying off people doesn’t make you squirm, you probably shouldn’t be in a position of management.
The important thing to remember is that, agonizing though the process may be, it’s not about you. There’s a (private) time and place for working through your emotions. Save it for your husband or wife—or your therapist. But definitely not LinkedIn. And definitely not making it the burden of those you are letting go.
“We demand rigidly defined areas of doubt and uncertainty!”
– Douglas Adams, author of Hitchhiker's Guide to the Galaxy
3.Go beyond surface questions
One of the most empowering things leaders can do during increases in uncertainty is to use probing questions to draw out people’s deeper concerns. In doing so, you may end up helping others discover their own strength, which works far better than offering the answer you think they want.
Take the following example, from when I was working with a company during the beginning of the Covid-19 pandemic. Given the unprecedented levels of uncertainty, emotions were running amok (not without reason; perhaps you can personally relate).
In a conversation, my client told me about a direct report whose anxiety about being away from the office had reached its limits. Through tears, the employee lamented, “When is this all going to be over?” With the best intentions, my client responded, “I have heard that we could see waves of cleared-for-work employees returning as soon as mid-May.”
Within an hour, my client had five messages from people asking, “Is it true we’re not going back until mid-May?” My client’s response, though well-intended, started a chain reaction of misinformation and false hope.
In these situations, it’s helpful to first pause, consider the fear driving the question being asked, and respond with a question that helps to relieve that fear. For example, my client might have said, instead, “I wish I knew when this would all be over. But your question made me wonder about a deeper question: What part of this have you found to be the most difficult?”
This would have allowed her team member to uncover, and ideally work through, her deeper concerns.
4.Remember: You are the message
In the face of extreme emotions, people in authority don’t just deliver a message: they are the
message. This becomes even more important when you’re managing people through digital mediums, and when the questions you’re responding to don’t have a precise answer.
Anxious listeners will pay hypervigilant attention to every detail; your tone and pace of voice, body language, and facial expressions must all align to invite the trust of others.
One tip is that when you’re addressing issues you actually are sure about, make declarative sentences that convey confidence and conviction. On the other hand, if you’re unsure about something, practice being a bit more speculative to convey how you are thinking about gray areas.
For example: “At this point, I don’t have all the answers our customers want, but I’m confident in our team that’s working on it.” Don’t know what the federal reserve bank’s most recent move or the escalating war in Ukraine means for your employees? That’s okay—just try to be thoughtful about how you explain this.
Tip
Probably unsurprisingly, steering a company during times of economic uncertainty can be a highly stressful experience. Even if you have to force yourself to do it, remember to pull yourself away from work every now and again to exercise or just take a break to recharge.
This won’t magically make your problems disappear, but it may help you gain a bit of perspective or, if need be, distraction.
5.Don’t catastrophize
Did you have a lower-than-expected third quarter? Does a cornerstone client seem to be calling less than they used to? Has investment and hiring slowed down? These obviously aren’t happy developments, but chances are they’re not the end of the world, either.
When bad news arrives, it’s all too easy—again, in life as much as business—to go directly to the worst possible scenario. In fact, during any big moment of economic uncertainty, there’s a good chance some of your employees are doing just that.
But even if their instinct is to automatically assume the worst (or “catastrophize,” in psychology terms), it absolutely doesn’t mean you should. As the leader, you’re expected to remain in control, with a well-honed sense of proportion. As mentioned earlier, this isn’t an excuse to sugarcoat challenges, offer transparently false platitudes, or dismiss an employee’s insecurities.
Far from it. But it does mean keeping a level head when challenges arise. There’s a big difference between telling your sales team, “If we don’t get this account, we’re finished” and “How can I best support you on this project?”
There’s no perfect playbook for how to deal with economic uncertainty. A managers’ role is to provide the best information she has at the moment. But with the help of the above tips, you’ll be that much more prepared when uncertain times inevitably arrive.
Leading Through Economic Uncertainty
Looking to build authentic, constructive communication with your team about the future, but aren’t sure where to start? That’s where we step in. We’ve spearheaded over 1,800+ organization and leadership transformation projects, and have worked with over 160 organizations—as leadership coaches we know what it takes to lead, in any economy.
Weather the storm of economic uncertainty. Lead effectively. Contact us to learn how.