Recessions: Do They Matter?
There’s a ton of debate these days about whether a recession is looming (or not), followed by just as much debate about whether we’re already in one.
Each side puts forward plenty of data and evidence to support their position - and if you listen to what they have to say, you can be convinced either way. So, who’s right? What’s the actual truth?
It doesn’t matter.
The fact is that no one can predict what’s going to happen. That’s the funny thing about human existence and the future - you cannot possibly have all of the data you need to be able to make a decision in absolute certainty.
We may take specific actions and not others. We (and others) then react (or not) in different ways. In parallel, events outside our control will happen, predictably and not so predictably. Add that all up and absolute certainty turns out to be a myth. You can never know what’s really going to transpire.
So are we going into a recession or not? Who knows? It might seem probable, but we can’t know for a fact.
The implication for us as leaders is, therefore, the same as it always has been: we need to stay focused on the fundamentals.
Listen to our customers. If we aren’t hearing what they need, adjusting what we need, and serving them, we’re not delivering value. So any shifts of focus or emphasis should be defined by them.
Double down on our core. There are things we do well and those we don’t. It’s worth remembering our core capabilities and drilling down on that as we service our customers in tough times.
Take care of our people. This should be obvious - when times are tough, our people need reassurance, they need support and they need commitment. We need to focus on what they’re grappling with and show them that commitment (in different ways) in tough times.
Stay frugal. Managing our economics carefully needs to be a mainstay. Spend thoughtfully and always be clear as to why we’re doing what we’re doing. If we’re consistent here, everyone will understand when we need to tighten our belts.
Be agile. No matter how large we get as organizations, we need to always be able to “turn on a dime”, so to speak. Yes, that gets harder as we grow, but the ability to mobilize and respond needs to remain a key ability.
Think long term. Always be cognizant of mission, strategy and values, across all areas of the business. If we stay focused on these fundamentals, we’ll always make the right decisions and do the right things.
Of course, there will be specific steps we might take to prepare for recessions in specific ways but, again, we can’t predict the future.
Better then to focus on what we can control and do the right things for the long term.
