Winter is Coming: Counter Intuitive Survival Strategies for Wise Organisations

It has been on everyone’s lips for a while now, but I heard it out loud for the first time in a client meeting last week: “we are preparing for a recession”. Speaking to executives, HR leaders and coaches over the last weeks have only reinforced this notion, and as the graph below indicates, there are a growing number of searches related to economic downturn on Google. It may be time to reflect on a wise survival strategy.

The usual response when we anticipate a downturn or other form of difficulty is to batten down the hatches and brace ourselves to weather the storm. Organisations hold on to or hoard resources, reduce headcount to preserve resources and limit “unnecessary spending” and prepare to face the challenge with brute force. The corporate version of the fight, flight, freeze reaction in humans. A reaction that often leads to a scarcity mentality.

So, what’s the problem you ask? Well, according to research by Harvard researchers Mullainathan and Shafir , scarcity mentality makes us dumb…literally.?

Operating from this state of mind can cause your IQ to drop by over 15 points while impairing self-control – e.g., we become more impulsive. In short, humans make dumber and more impulsive decisions when we perceive limited resources or threat of extinction. This is because resources are directed away from our thinking brain and towards those parts of our bodies that will fight or run. In this state we narrow our focus, take a short-term perspective, and tend to think in black & white terms. Now, multiply that by the number of leaders at the head of your organisation and, Houston, we have a problem.?

This is a problem because sage advice on how to successfully navigate adversity often urges “wise decisions”, “creative responses”, “openness to spotting opportunities”, taking a long-term perspective and remaining flexible and agile. If the decision makers act from a scarcity mentality, they will not be able to do this, and may even act in exactly the opposite way as we often see when evaluating corporate responses to adversity in hindsight. Just witness how quickly organisations go from “people are our most valuable resource” to “redundancy is inevitable” at the first hints of trouble. Add to that cuts to spending on people support, development and coaching and we can see the power of scarcity mentality at work.?

If we learnt anything from the Great Resignation and Quiet Quitting is that people are exhausted and fed up with corporate greed and overreach. We’ve reached a point where the loyalty and commitment of people cannot be taken for granted anymore. Organisations cannot continue to rape and pillage their own villages during downturns and expect them to return with loyalty and support after the storm.?

So what’s the smart way to approach an impending crisis or challenge? How do we get our IQ, strategic perspective, agility and wisdom back in play? There is a Zen Saying:?"If you?don't have time?to?meditate for an hour?every day, you should?meditate?for two."?The moral of this story is that, when faced by difficult times, we often have to go against our instincts (fight, flight, freeze) and to engage in activities that will replenish us instead of feed our fears.

When faced by difficult times, we often have to go against our instincts (fight, flight, freeze) and to engage in activities that will replenish us instead of feed our fears.

Applying proven psychological theory and practical experience, here are 3 things that will help organisations navigate the storm and prepare for a possible recession:?

1. Get your best people ready for the challenge. This will mainly involve your key leaders but may apply to any other person who will affect the strategy and decisions of the organisation.??

• Hire, promote and select leaders who will steer your ship through the storm without wrecking the ship. Look beyond brash, brute force fire fighter-like behaviour to find balanced leaders who will engage and inspire their followers to rally them behind their strategies.?
• Preserve your coaching budget. Every key leader should have access to a coach or mentor who will help them retain their perspective, remain centred and access their inner compass. Providing a safe space to express their ideas and fears will support leaders to play at their best with the highest level of mental clarity.
• Drive teamwork. Starting at the highest level, ensure that your leadership teams are functioning optimally. Address toxic team behaviour and selfish behaviour in teams and focus your promotion decisions on strong leaders who can play well with others.?

2. Build resilient agility in your organisation. By now it should be clear that no one can be resilient or agile when they are in fight-flight-freeze mode.?

• Mental health support. Wise organisations proactively invest in mental training, education and support so that people have the head space to focus on the task at hand.?
• Engage an EAP provider or, if you have one, set up a meeting with them to discuss how you can proactively build resilience in your work force.?
• Equip leaders with the skills to support their subordinates in every way possible. This may be a challenge if you insisted on promoting those high performance, high damage leaders in the first place.?

3.?????Communicate, communicate, communicate.?

• Every leader should engage their team even more regularly than before. Change guru John Kotter recommends “over communicating by a factor of 10”. So, even if you feel satisfied, your communication efforts are very likely to be inadequate.?
• Engage in two-way communication. Listen to the people and take action on their feedback to avoid them feeling excluded, ignored or powerless.?
• Communicate openly and transparently. If you want your employees to trust your leaders. Be transparent as far as you can and then go a little further. Leaders often conceal the truth out of fear and insecurity, not because it is in the best interest of the organisation.

In short, resist the urge to make decisions based on fear, consider the long-term impact of decisions, don’t cut your nose to spite your face and focus on what you need to thrive beyond the storm and prioritise that. And no, it is not too late if you start right now. To quote Rich Dad Poor Dad author, Robert Kiyosaki, “Don’t say I can’t afford it", rather ask, “how can I afford it”.

In conclusion, let’s do a quick self-check: Whenever you get to doom and gloom, feeling powerless, not seeing the light at the end of the tunnel or saying “I cannot do that”, you’re in survival mode and you are the only one who can get yourself out of it.?If you’re stuck there, you may already be hijacked by scarcity mentality or other mental blockages.

I would love to hear what you are doing to prepare for hard times. What is your top tip for leading organisations through a storm in a sustainable way?