A strategic approach to managing a downturn

Abstract

Purpose

This paper seeks to examine how organizations can not only survive the effects of a downturn by taking a strategic approach, but also use this opportunity to emerge from uncertain times leaner, fitter and better able to adapt to new market conditions. The paper includes contributions from Mark Goodridge, CEO, Louise Earle, Jane‐Catherine Hartshorn, Martyn Sakol and Mike Thackray, all at ER Consultants, which specializes in organization behavior change.

Design/methodology/approach

Thie paper draws on research and the experience of ER Consultants in the field to examine how organizations can successfully deal with a downturn and positively approach a reorganization situation.

Findings

The secret is not to fall into the trap of knee‐jerk reorganization. Reorganization can be a wonderful way of creating an illusion of progress while producing only confusion, inefficiency and demoralization. This is not to deny that change is sometimes necessary – it is just that organizations need to be strategic and choose the right architecture. Successful reorganizations require trust that is built on respect and timely communication, as well as energized leaders and strategic responses that eliminate actions based on panic. Successful high performance organizations get through tough times by avoiding laying people off, cutting funding or reducing investment in core parts of the business unless it is absolutely necessary. Instead they are innovative about retaining talent in order to gain competitive advantage when market conditions improve and create an energizing environment.

Originality/value

In a credit crunch environment it can be all too easy for external factors and concerns to drain the positive energy that forms the powerhouse of a successful organization. As recent research has demonstrated, leadership energy can be directly linked to customer satisfaction, absenteeism, turnover, employee energy levels and, therefore, bottom‐line results. The ability to boost energy in the workplace provides significant competitive advantage by helping to retain and motivate staff.

Citation

Goodridge, M. (2009), "A strategic approach to managing a downturn", Strategic HR Review, Vol. 8 No. 1, pp. 28-33. https://doi.org/10.1108/14754390910920457