Strategies for Building Firm Resilience in Economic Uncertainty

Written By: Sirvan Jackson

In times of economic uncertainty, many firms often face difficult decisions, ones that can fundamentally alter their trajectory as well as future state. The difficult conversations of ‘breaking even,’ the fear of ‘another round of layoffs,’ and the anxiety around meeting payroll feel too common. However, a crisis, though daunting, presents unique opportunities for reassessment and reinvention, especially in the realm of operations.

Proactive Principles for Future Resilience

As we reflect on the scars left by the economic downturn, it’s clear that the best time to prepare for a crisis is before it happens. Here are some timeless principles to ensure the next crisis finds us ready:

Right People, Right Seats

In any crisis, particularly one of economic uncertainty, the composition and placement of your team become crucial. Jim Collins, in his book “Good to Great,” emphasizes the importance of not only having the right people on the bus but also ensuring they are in the right seats. This principle becomes even more vital in rough economic times.

Understanding Team Dynamics

The first step is to assess your current team. Evaluate each member’s strengths, weaknesses, and their current roles. Are they positioned where they can make the most significant impact? It’s not just about having skilled individuals; it’s about aligning those skills with the needs of the organization.

Adaptability and Evolution

Crisis often necessitates change. Your agency’s needs during a crisis will likely differ from those in more stable times. This change requires a flexible approach to team roles. Some team members may need to shift into different roles, ones they haven’t traditionally filled. This adaptability can be a strength, allowing your organization to pivot quickly in response to new challenges.

Support and Development

When a team member is not the right fit for their current role, leaders face a choice. They can support that individual in adapting to their role or assist them in finding a new one where they can excel. This support might include training, mentoring, or even role restructuring. It’s about investing in people, not just filling positions.

Making Tough Decisions

In some cases, it might become clear that an individual is no longer a fit for the organization. These decisions are challenging but necessary. The goal is to ensure that each team member is contributing effectively to the organization’s goals, especially during a crisis.

More is Less

In times of crisis, it’s easy to fall into the trap of seeking new solutions – new tools, new strategies, new hires. However, this approach can often lead to complexity and inefficiency.

Avoiding Overwhelm

Each new tool or process introduced into an organization carries with it a cognitive load. Learning and integrating these tools takes time and mental energy, which can be in short supply during a crisis. By focusing on fewer, more effective tools, you reduce the cognitive burden on your team, allowing them to focus on what truly matters.

Optimization Over Accumulation

Instead of acquiring new resources, focus on optimizing what you already have. This means streamlining existing processes, improving current systems, and ensuring that your team is using the tools at their disposal to their full potential. Often, significant gains in productivity and efficiency can be achieved by refining current operations rather than adding new elements.

Strategic Selection

When considering new tools or processes, be strategic. Does this new tool significantly improve on what you already have? Will it reduce the workload in the long run? Is it aligned with your organization’s goals? If the answer to these questions is no, it may be better to focus on optimizing your current resources.

Recognize Cognitive Limitations

This principle revolves around understanding and respecting the finite limits of mental capacity, which is an often overlooked resource, both individually and organizationally. During a crisis, the mental load can be overwhelming, with high stakes decisions and constant uncertainty.

Managing Workload

It’s essential to manage the workload to avoid cognitive overload. This means prioritizing tasks, streamlining decision-making processes, and eliminating unnecessary steps. It also involves recognizing when team members are stretched too thin and finding ways to alleviate that burden.

Efficient Processes

Simplifying processes can significantly reduce cognitive load. This might mean integrating disparate systems, automating repetitive tasks, or removing redundant steps in a process. The goal is to free up mental capacity for more critical, high-value tasks.

Mental Health and Well-being

Acknowledging cognitive limitations also means paying attention to mental health and well-being. In a crisis, stress levels can be high, which can further strain cognitive resources. Providing support, ensuring adequate breaks, and promoting a healthy work-life balance are crucial.

Continuous Improvement

Recognize that managing cognitive load is not a one-time fix but a continuous process. Regularly assess and adjust workloads, processes, and systems to ensure they are as efficient and streamlined as possible.

A Roadmap to Resilience

Adopting operational excellence is not just about the common buzzwords of “streamlining” or “optimizing”; it’s a cultural shift that requires a thoughtful approach. Begin by identifying areas that hurt the most, financially or otherwise. Think of it as a doctor treating the most critical injuries first in an emergency. Where are people complaining the most? What service line has the most churn, or what functions have the most overlap? Gather this data and start there. You may have some quantitative insights to guide you, but don’t overthink it. Just prioritize investments that offer the highest return, such as automation tools or software systems that enhance communication and collaboration, or getting expert guidance.

This cultural shift creates an environment where employees are encouraged to identify inefficiencies and suggest improvements, giving your firm a distinctive advantage over the competition.

The adage ‘never waste a good crisis’ rings particularly true in the context of operational investment. A crisis, while challenging, is an opportune moment to reassess and reinvent. By focusing on operational efficiency, you can not only navigate the immediate challenges but also emerge stronger, better prepared for the future. It’s time to turn the biggest liability into the greatest opportunity for growth and resilience.