Have you ever known quite such a strange business and economic climate? On the one hand, we have the continuing shadow of a recession hanging over the economy, with a cost of living crisis that is affecting many households and especially those on lower incomes. We have a rash of industrial disputes and actions such as we haven’t seen since the Seventies. Many businesses are struggling with significant resourcing issues as skills shortages and candidate availability continue to be a problem. Productivity is an ongoing issue too.
But then on the other hand, we have almost boom conditions for some sectors and businesses. The FTSE hit a record high of over 8,000 points on 16 February. Energy and oil companies have been announcing record profits. Many big retailers and supermarkets reported strong Christmases. The bank reporting season is throwing up mainly solid and profitable results. And the economy, whilst continually threatening to move into recession, hasn’t actually done so yet. The ONS, for example, reported that retail sales in January had unexpectedly risen by 0.5% where most analysts were expecting a fall.
So, what are we to make of all this? I have often written in this blog about the growing polarisation of consumers, and it would appear this applies to organisations as well – with significant numbers struggling while the high earners from both a consumer and organisational aspect continue to flourish. In general, big business appears to be doing very well. It is the medium and small enterprises that are wrestling with the effects of input cost rises and faltering demand.
Certainly, navigating such a complex and ambiguous landscape can be very challenging. It is a challenge (but our jobs nonetheless) for leaders to be constantly trying to interpret what all the conflicting signals mean. And at a time when many businesses feel like they are in a constant crisis mode – dealing with pressing issues around staffing, costs and cash flow – there is a definite sense of ‘running to stand still’.
We must find a way out of this. In part, this may come as the economy warms through more generally and more evenly. There are hopes that inflation will drop back in the second half of the year, and this could have a positive ripple effect, slowing cost increases, easing interest rate rises and stimulating more consumer demand.
However, we need to challenge ourselves as to why we are in this position. As any business leader will tell you – you can’t passively rely on a macro-economic improvement to raise your organisational performance. The way out needs to be generated from within.
Recognising your progress
The first thing I would say here is that it’s so important to keep a sense of perspective. I suspect that if most leaders were to stand back and survey their business, they would see that they are making more progress than they realised. Businesses have been incredibly resilient through all the recent challenges of Covid, Brexit and now cost increases and inflation. Service for example really shone through the most difficult times, even if customer satisfaction levels have fallen back.
So, recognise the progress you are making and celebrate that. Take the time to celebrate small wins. Make sure your staff know that you appreciate all their efforts and hard work, and wherever possible make room for continued investment in your people through training, coaching and development opportunities. It’s a two-way street as well, though – so drive the ownership and accountability your people take for the things they control, manage and input into. It’s the collective approach that will win through.
But also, make a little time for yourself. Guard against burn-out. In a tough environment, no one can function as a machine. Whatever works for you as an energy booster or a recharger, make sure you build that in periodically to your routine.
Staying focused on purpose and values
Another key aspect – and also one that I have returned to many times here – is to stay true to your organisational purpose. Be very clear about what your central mission is and the values that you will operate by. Put those at the heart of how you do business – your customer proposition, your commitment to service, how you treat staff, suppliers and other partners. One thing we see clearly in the UK Customer Satisfaction Index (UKCSI) is that the perennial high performers are those organisations that stay steadfastly committed to their purpose and have real clarity about how they will achieve it.
These may be strange and unpredictable times. But there are plenty of positives and achievements to build on. Recognise how far you have come, keep your guiding purpose continually in your sights, and take a longer-term view of how you will reach your corporate goals. Then, I hope, rather than running to stand still you will start actually eating up ground again – and collectively we will move forward as an economy and business community.