Gajen Kandiah is CEO, Hitachi Vantara.
Hinterhaus productions 2016
There are few similarities between the current economic situation and the recession in the past. While it’s tempting to point to similar but individual challenges, such as the cyclical dynamics of inflation, employment and the direction of gross domestic product, today’s complicated configuration is like nothing we’ve seen before, from the war in Ukraine and a global pandemic to rising inflation. and low unemployment, just to name a few factors. It’s new territory with no script to draw inspiration or direction from.
Unfortunately, as all too often in business, we respond to new challenges with standard operating practices. We think in terms of immediate survival rather than sustainable growth. In previous downturns and recessions, this often meant organizations focused on cost cutting first, and the sooner the better. They rushed to reduce operational costs at any cost with little regard for how those decisions could or could affect their ability to recover and grow.
However, there is a way through the quagmire of uncertainty that focuses on some simple, if not somewhat counterintuitive, business practices – practices that can not only help an organization survive a recession, but emerge stronger and ready for growth . The downturn will also pass. McKinsey and Co recently addressed the need to understand the company’s “readiness” to weather the market swings and thrive or survive.
We have always advised employees, customers and partners to strive for the latter. I’ve found that it’s the organization that puts the long-term view at the center, long before times of economic uncertainty, that is able to be poised for growth.
A new mindset
I am reminded of the great management book Feel and react from a few years ago. In it, the authors describe a way of working that combines business agility with constant market communication (with customers). The model requires organizations to be constantly learning, aware of the ever-changing market, and agile enough to respond quickly and thoughtfully to advances.
I totally agree. But doing so requires a new business mindset based on the liberating dynamics of digital and a fresh look at the operation, its capabilities and vulnerabilities, all with a clear understanding of what to monitor and why.
Such a mindset can help to make difficult decisions around the company and portfolios quickly, thoughtfully and strategically, rather than insensitively and reflexively through good times and bad.
Like many business leaders, I’ve endured several downturns in my career, from the burst of the dot-com bubble in 2000 to the subprime mortgage crisis of 2008 and the market crash of 2018. Experiences like these provide intense real-time learning opportunities. While it may seem counterintuitive, it is essential to remain vigilant for new business opportunities during a recession.
Specific customer-facing actions have helped companies like ours to emerge from economic storms and prepare for growth.
1. Value
In times of market downturn, it’s critical to stay hyper-focused on creating value for customers and partners. Too often, economic disruptions can be as distracting as they are potentially devastating. Make supporting and empowering the customer and partner a main goal.
2. Dialogue
The only way to deliver value is through an open dialogue with customers and partners to understand their goals and challenges. Now is the time to double down on communication to learn and grow from and with them.
3. Invest
Find and understand the aspirations of your customers and partners through this constant communication. Then invest in their future needs. As mentioned above, the natural reflex in times of economic hardship is to cut back. But I have discovered that investing in these times is not only possible, but also doable. There are practices, processes, services and even innovations that can be supported or created from whole fabric. Doing this, investing in the future, can position an organization pipe when the market recovers.
From a macro perspective, I would also suggest that it is increasingly important to rethink how companies and organizations view and value the workforce. I believe it is important to make mental health a business priority and introduce a new brand of learning and personal development into the cultures of our organizations. In times of challenge, we must determine how best to support the workforce for mutual growth and success.
These seemingly simple practices require a commitment to succeed. They must be embraced by the culture. When executed with honesty and authenticity, they can provide organizations with vital information, as well as valuable context and insights into the intrigues and aspirations of the customer, partner and workforce. time.
Fear, uncertainty and doubt are not the guiding principles of a falling market. There are opportunities in times of challenge that can be seized to benefit all. But it requires discipline and long-term focus, one that perceives the potential scenarios and plans for growth accordingly. This down market will pass. Plan to get ready for growth.
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