Fremont: With the axe of another economic recession still hanging loose, many entrepreneurs would be troubled at the maddening impact of a possible downturn. The impact is felt across the globe, across all the companies, regardless of the size. Though the entrepreneurs cannot avoid the downturn, few leadership traits might help them sail smoothly across the turbulent sea.
An entrepreneur must be diligent enough to choose between the essential and the not so essential aspects of the business. If he keeps the decision making power just to himself, it might harm the company as much. Thus, entrepreneurs should be open and flexible to new creative ideas from the employees. He should be foresighted enough to look at the bigger picture and focus on how to grow the demand in the other areas. It is only when he is flexible enough to opinions that he would be able to restructure the company’s offerings in a way that best suits the moment.
An entrepreneur should be ready to take up risks. Companies like Microsoft, AT&T, Disney, and FedEx were all started during recession, as they choose to ride against the wind and have carved a niche for themselves. While a recession might spell doom to many a company, it might just be a silver lining to the startup entrepreneurs. They would be able to access talented people at lower costs, get cheaper supplies, be able to bargain with the customers, and more importantly be immune to competition, as not many would have the guts to venture out during the global hailstorm. For an entrepreneur, a recession might be the right time to launch a new product or venture into new markets.
The horror tales of recession include large scale layoffs, huge pay cuts, closure of business, and employee outcry. Entrepreneurs should be transparent to their employees, and discuss any dip in the business with the employees. This would not only increase the trust among the employees, but also encourage them to come up with creative ideas to help the business through the tough times. In many a companies, communicating openly with the employees has seen them go to any heights to save the company.
During the 1990 downturn of the Brazilian economy, the employees of Semco SA, voluntarily agreed to wage cuts, in return for an increased share in the profits and the rights to approve every expense. This shows the power of an open and transparent management on the employees. Even though the scare of losing one’s job might be a nightmare, if the employees are informed at the first sign of unrest, they would take it up as a challenge to sail the company. Thus entrepreneurs should not wait till the water level rises, but communicate the business processes openly with the employees.
A bad time spells terror on all; the entrepreneur and the employees alike. Being the captain of the ship, it is upto the entrepreneur to motivate his employees to sail in the right direction. The key during this time is to achieve more output with lesser resources. The entrepreneur should understand the pain points of his employees and motivate them accordingly. This is a time when it is easy to get go of the ethics in order for minimal gains, but the entrepreneur should take it on himself to avoid any such practice and keep the spirits high across the organization. He should know how to get more work done from the employees, inspite of their fear of losing their jobs.
Even though recession might spell chaos across the industry, it is upto the entrepreneur to show the right direction to his company. Bernadette Themas once said that how a leader is often dictates how he will react in a crisis; it is important for him to constantly improve for the better of the organization. Thus, the entrepreneurs should be able to pull the sails and cut across the turbulent times in order to rise. Not only should he be a risk taker, but also be diligent and transparent in his approach.
