When the recession comes for us, who will be ready? Well, almost nobody ever is, but there are ways to recession-proof yourself. Research from VitalSmarts, a corporate training and leadership development company, found that half the workforce won’t have it together if a recession hits.
Employees weren’t very confident of their bosses’ skills in a recession: 52% said their managers just didn’t have the skills needed to handle an economic downturn. Only 7.3% of employees expressed confidence that their bosses could hold up.
Bosses feel the exact way about the employees: nearly half responded that their employees didn’t have chops it would take to navigating the corporate world in the midst of an economic decline.
The study reached out to 1,000 employees and executives to rate their company on five general skills thought to be the most important in weathering a downturn – discussed below.
David Maxfield, a co-author and vice president of research at VitalSmarts, spoke to Ladders about the study.
The first question was the “r” word. Were rumors of a recession greatly exaggerated? Maxfield said it’s top of mind.
“I think it’s in a lot of people’s heads,” he said. “The reason that we did this study is because a lot of our customers and the folks we work with are concerned, that they believe there’s a pretty good chance of a recession happening within the next year.” (Bloomberg News reported that the chance was 25% in 12 months. Marketwatch reported the odds of one happening even further out – in 2021).
Recession-ready tips for making yourself indispensable in times of trouble
VitalSmarts came up with five essential to recession-proofing a business… or yourself. David Maxfield, a co-author and vice president of research at VitalSmarts, broke them down.
Open dialogue. In business, two-way, candid dialogue matters – especially when the stakes are high. “Our belief is that the human side of an enterprise is going to get put under stress when a recession happens,” said Maxfield. “And when a recession happens, it’s going to require greater responsiveness.”
Open dialogue means realizing what you know you can talk about – and what you realize you can’t, or won’t, Maxfield says. “Are people candid and able to talk about the toughest kinds of decisions they’re going to have to make?” he asked. “For example, are there undiscussables? Are there sacred cows? Can you talk about those things?”
Change mastery. Master behavior change by determining the cues that reward that influence behavior and result in good habits that either rocket you towards success – or hold you back. Think of it as the negative side of this as being stuck in organizational muck. “What we mean by that is that we get entrenched into comfortable routines and habits,” said Maxfield. “They become organizational norms -even become unwritten rules. How do we deal with that? We can explicitly say we need to do X, Y, and Z. But if the norm and the habit is we don’t, then the habit wins out over the expressed commitment.”
“And so how do organizations handle the fact that they’ve got to stop some habits that in the past maybe were positive and productive, but now are inappropriate, and therefore bad? And how do they start some new habits?”
Productivity. “Sort of obvious!” said Maxfield. “We’re all juggling more balls than we can really juggle. Now imagine that we’re a team of five, and we’ve lost a member and we haven’t lost their accountabilities. How are we going to juggle even more balls? That’s the productivity challenge.
Universal accountability. Members of an organization must be allowed to respectfully hold anyone accountable for their behavior. The hard part of this is actually upholding it. “The challenge is we really have to be able to trust each other, that what we ourselves say what we’re going to do,” explained Maxfield. “There can’t be a gap where we promise to do something that’s hard and difficult, but saves money or improves responsiveness or productivity. We can’t promise and then not deliver.”
Leadership. The ability to drive behavior change across teams or entire organizations. To have good leadership skills, Maxfield says, “you’ve got to be more responsive and you’ve got to be aligned.” That influences whether the members of your organization move together or apart, whether they can “spin on a dime together” when they need to execute, or if they get whiplash that “tears the organization apart” when directions change.