Coming out of recession is one of the most dangerous times for businesses. They need new working capital and training, and existing staff can become footloose after staying put during the downturn. Loyalty shown during the hard times may not be everlasting.
So what should directors do to ensure that loyalty is retained as the economy picks up? Employees want from their leaders honesty and intergrity – that they do what they say on the tin.
So senior leaders must have a clear vision for the next five years and must recognise the purpose. And they must live and breathe the promises made to their staff and customers. People sometimes over complicate the meaning of “brand”.
Your brand is your promise to the key people in the organisation – customers, staff and clients.
Break these promises and you will disappear. The two biggest lies in business today are “our customers are our heart and soul”, and “our people are our greatest assets”. These phrases or similar are often included in the values of many organisations as soon as a recession bites.
Yet people are made redundant, salaries cut, pensions restricted. All this will impact hugely on customer service.
It’s hardly living the values. Does this sound like your business? Then you’d better start recovery work now. Recognising your talent is essential. Your most talented people are the most likely to leave when the job market picks up if they haven’t felt valued during the downturn.
They may quit just when you need them – as business picks up again. They’ll be taking their talent, experience and knowledge of your organisation to your biggest competitors. Having identified your talent, you must ensure they feel valued, feel they contribute to the overall success of the organisation. You must also ensure they are certain they can have the opportunity to progress their career in your organisation.
Cheap gimmicks like discounted gym membership don’t work. They are seen as a bribe and affect loyalty negatively.
Development of managers and leaders may have been seen once as a soft option. Now it is crucial to the success of any organisation as the economy grows. Recent research indicates it costs around £16,000 to replace one middle manager in recruitment, lost productivity, etc.
Can your business afford this? One of the quickest ways a senior management team can hinder the recovery of the business is to allow the challenging times of the last three years to affect their working relationships with each other.
I have worked at board level at some of UK’s top businesses and seen the negative effects of political in-fighting, one-upmanship and parochial thinking.
The focus for the senior team has to be; what do we need to do together to enable this organisation to perform at its best? If it means setting egos aside then that’s your job.
Many companies will be starting this new era with new board members either following a merger, a management buyout or restructuring.
If that leads to a lack of clarity or to hostile working relationships you can be sure it will be reflected throughout your organisation.
One of the biggest mistakes of senior management is to underestimate people’s ability to pick up on negative, unhealthy relationships within the senior management team. Pretending to walk the walk won’t do.
If even one person in the organisation picks up that you are not all facing the right direction, the rest of the organisation will find out quickly and probably your competitors will too. Smart organisations have been looking after, and communicating well, with all their people throughout troubled times – even if those times have included redundancy and restructure.
The less smart have assumed people are just happy to have a job and think it doesn’t matter how they are treated.
They will suffer in coming years as their reputation dives.
One organisation I met recently put their staff survey results on hold. They knew the results were going to be bad.
That indicates a lack of care about the people forming the backbone of the business.
Ask yourself as a boss: “Am I really doing the job I’m paid to do?” During challenging times, often the leadership team will roll their sleeves up, get stuck in and do some of the workuseful as a short term strategy.
But your job is to lead the organisation.
Without that mindset you will continue to firefight. My favourite definition of the difference between a manager and a leader is that a manager works in the business and a leader works on the business.
Check your diary for the past two months and the next two months. Where is most of your time spent? Is it focusing on strategy, building future business, ensuring that future economic downturn affects the organisation less through learning the lessons of the past three years – or is your time spent in meetings about policies, delivery times and lower level business issues? While the current recession has been labelled the worst since the Depression, there are some notable differences.
During that time people queued around the corner to get bread. In the midst of the current recession people have queued around the corner to buy iPads.
People are still spending on the things that they really want, as opposed to what they really need. If any of your competitors continue to get good results then the job of a leadership team is to regain the competitive edge.
It’s not that business isn’t out there; it’s that it’s not coming to you.
How can you get new ideas, explore new markets or create new products? Why not ask the people who are likely to know best, the front end of your business who serves your customers and your clients? When the pressure’s on, senior people often hide, go from meeting to meeting and distance themselves from the very ones who can give them the most valuable information. A common theme among organisations that do continue to get outstanding results in all economic climates is that its senior management is in direct contact with their front-line people.
As slow growth continues to be predicted, even the possibility of a double-dip recession, organisations can break the trend in ways that are both low cost and adding value in a whole range of ways by tapping into the people who form their organisation.
Money isn’t always the answer.
Research shows that if people are happy in their job they will only leave for another company if it offers a 30% or more pay increase.
Bonus systems often fail because when targets cannot be achieved, people get demotivated as they are not getting rewarded financially and they see these incentives as part of their remuneration. Stop them and it will feel to them like pay cut.
Consider any of the credible research on staff engagement and loyalty.
You’ll find money is never in the top five most important things, except to the lowest paid. Now’s the time – if you haven’t done it already – to add emphasis to the value of your workforce, otherwise what you’re doing is using your money to train staff for competitors.
Loyalty is the greatest reward an employer can get from staff.
If they’re willing to give loyalty, return the courtesy. Acknowledge their worth and reward in an appropriate way, whether in communication, respect or career development.
For audio discs or to contactRichard Nugent, email firstname.lastname@example.org