I was invited by one of the Senior Managers of Corporate Business at Allied Irish Bank (AIB) to attend a breakfast briefing at the new Terminal 5 to discuss the current economic climate. I think it’s great that AIB are creating a support network where businesses can discuss how to build ‘confidence and trust’ following a market correction.
The AIB Global Services Senior Economist gave a comprehensive assessment of the current financial picture. We’ve all been aware for a while now of the downturn in trade across many industries but not even the seasoned business people amongst us could hide their horror at her interpretation of where our economy’s going. All the latest indicators show a sharp downward trend. There was a lot of talk about ‘confidence’ and instead of people spending money on buying property, building their business and moving things forward, people are choosing to hold onto their cash.
All this uncertainty and bad feeling about the marketplace creates another form of currency which is being ignored. This is the ‘emotional currency’ that is being spent during difficult times. The anomaly here is that whilst on one hand, companies are now focussed on improving efficiency across their entire business, on the other hand staff anxiety and stress is increasing and creating its own emotional cost for the organisation.
This raises the question as to ‘what can businesses do to manage their people better during a downturn’?
John Thompson (22/07/2008)
With this in mind Steve, any chance of a white paper with some ideas of how best to go about supporting staff/teams right now? Perhaps a downloadable would be good? I’ll email you my details but thought it would be good to comment here first.
Steven Sylvester (24/07/2008)
John, thank you for your response and question. I look forward to receiving your details, but in the meantime I think that leaders may want to consider the following metaphor:
Imagine your organisation as if it were operating like a computer hard drive. The operating system and software interacting to produce optimal performance for the user. The computer becomes infected with a virus which creates misalignment between the user’s instruction and the computers software, leading to poor functionality and a disgruntled user. Time is wasted in rebooting and trying to troubleshoot the problem which creates frustration, inefficiency and loss of margin. The standard intervention here is antivirus software that quickly scans the hard drive and fixes the problem.
Leaders, therefore, need to act in a similar way to a piece of antivirus software in this current climate. They need to:
1) Scan their organisation and become acutely aware and be sensitive to ‘people issues’.
2) Spend more ‘time’ with key staff discovering how the current climate is impacting them in both their personal and business life.
3) Communicate and give clarity to their workforce on how the organisation is going to support their employees through these difficult times.
Steven Cochran (28/07/2008)
Interesting points, particularly when you consider that many of us are in the people business. That “emotional currency” you refer to is the thing that leads directly to the “hard currency” we are all trying to generate. If you are the captain of an ocean going liner, you wouldn’t let the ship gradually be corroded away until it crashed without regular maintenance and repair. Or considering a new route…. In service industries, our people are that ship, the vehicle that brings us success, profits.
Communication is another vital aspect – for the bank this means regular discussion with customer and colleagues about what’s going on to prevent that corrosion.
That’s the way we will lead ourselves through uncertainty and rebuild confidence. Its more relevant in Finance than ever before. Banks hate surprises, dialogue is vital for all partners in business.
In summary, its actually a great time to take stock and review the way you are actually working. Is the way you do things facilitating the maximum results?
Richard Dyer -Tranzform City (31/07/2008)
These are turbulent times: tough credit, long returns, and everyone worried. A time when everyone is once again, focused on cost. What can we cut? Where are there some savings? Are there any heads we can let go?
My experience is that cutting costs is not that hard. As a consultant, I once had a client ask me to only get paid for costs I could cut. I thought to myself, “This could be my biggest payday yet. I will cut all costs. I will get expenses down to zero.” I didn’t say that and we came to an agreeable compromise but it is a good reminder that cutting costs is not hardest part of organisational transformation – growth is harder. Growth is what makes an organisation successful, it is what keeps people in their chairs and it is the hardest thing to do.