Unspoken lessons from past recessions

Although we should be grateful that financial crises seem to occur about a decade apart, one of the problems with the infrequent nature of them is that the leadership often changes in organisations between these events and therefore many successive leaders don’t get the benefit of learning from their predecessor’s mistakes.

I’m not talking about the tangible mistakes that make a matter of record; I’m referring to the intangible, unspoken management decisions that I have seen made time and again. So, I’ve tried to pull together here those that I can remember for the benefit of marketing and agency leaders alike, and I would welcome any additions in the comments for the benefit of all readers. Please keep suggestions balanced but direct and frank.

1)    Redundancies are inevitable. But if, in the long term, you want to retain the staff who you don’t make redundant, don’t exploit them in the short term. Even in the good times it’s a common complaint to hear of people being given additional roles without additional support or compensation. When the job market improves, they’re likely to be first back on it to find a role that will properly pay for their efforts and abilities.

2)    Redundancies can be handled well and they can be handled badly. Often staff don’t understand why expenditure from one part of the balance sheet can’t be moved to another. But they’re not idiots, bring them with you, talk to them straight and explain.

3)    Be fair when selecting who to make redundant. Use a robust and legal process. I’ve seen many organisations exploit opportunities like this, using what are called compromise agreements to buy great talent out of their contracts, who coincidentally might have been speaking truth to power or were deemed troublemakers. Your staff will see through it (they talk to each other when you’re not there, you know).

4)    Procurement may well be given more aggressive “savings” targets for marketing. But don’t forget that any marketing outlays in strategy, planning, creative and creative executions are investments, not costs, and you need to be careful you’re not simply buying less for less, or radically increasing your risk of failure. The effectiveness and return on a vast proportion of the rest of marketing investment are dependent on having got the strategy and creative ideas right in the first place.

5)    Companies lower down the marketing supply chain will be suffering. They’re often smaller and less financially robust. They will be ravenous for new business and their time is precious as they search for the next bubble of oxygen. If you don’t want to hear from them, please be firm so that they can spend their time better and more productively…

6)    … likewise if you have asked for a proposal that you then find you want to decline, don’t avoid or postpone the conversation. If it’s non-negotiable, be firm and upfront with a simple “We’ve decided to go another way, I’m sorry.” Cut them loose to find other sources of business.

7)    Promoting people to keep them puts the Peter Principle[1] into practice, causes title deflation and generally doesn’t achieve its objective as soon as the job market improves, not least because you’ve asked somebody to take on more responsibility and deliver greater value without compensation.

8)    Sacrifices made by leadership – salary cuts, bonus cancellations – will go a long way to maintaining strong brands and employer brands. The news yesterday[2] reported EasyJet asking for taxpayer support while simultaneously paying shareholders ￡174m and ￡60m to its founder Sir Stelios Haji-Ioannou. You will not see me fly on their airline again and I doubt I am alone. With this kind of event, people can have long memories.

Much as societies are judged by how well they look after the vulnerable, business, brands and their leaders are judged much more closely by how they handle a crisis. Businesses that were ahead of the curve in changing their production lines to make hand sanitiser or PPE show the kind of leadership that inspires people to work for them and consumers to trust them and buy from them when some kind of new normality resumes. 

But most of all, now more than ever, it’s vital to remain human. We may have to distance ourselves physically at the moment, but we don’t have to distance ourselves emotionally. Leaders will often stiffen their resolve, be “tough” and “brave”, believing that these qualities are what are expected of them, that they demonstrate their strength or authority.

Speaking for myself, and I suspect for many others, I don’t want to see tough, brave faces in leadership; I want to see honest, sympathetic, kind faces, even if what they have to tell me is going to hurt.

David Meikle. Founder The HTBAG Company. Author: How to Buy a Gorilla.

[1] https://timharford.com/2018/08/the-peter-principle-is-a-joke-taken-seriously-is-it-true/

[2] https://www.thelondoneconomic.com/travel/easyjet-shareholders-get-174-million-dividends-as-airline-appeals-for-taxpayer-support/21/03/