A strategic approach to managing a downturn
| DOI | https://doi.org/10.1108/14754390910920457 |
| Pages | 28-33 |
| Date | 28 November 2008 |
| Published date | 28 November 2008 |
| Author | Mark Goodridge |
| Subject Matter | HR & organizational behaviour |
A strategic approach to managing a
downturn
Mark Goodridge
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.
Keywords Strategic planning, Organizational restructuring, Trust
Paper type General review
Periods of strong economic growth are usually followed by periods of correction. The
economic landscape has become harsher and the darker side of prosperity is now
starting to reveal itself. But organizations cannot only survive the effects of the
downturn, they can come out the other end fitter and leaner, quickly able to adapt to new
market conditions and thrive. The key is to switch mindsets and get used to an altogether
different commercial environment.
It also means coming to accept that many of the ways of working that we have hitherto
believed to be effective may no longer prove so successful and turning our attention to
performance improvement. While these techniques may have new labels, they do the same
job of helping us to focus closer on the customer, drive up efficiencies and drive down
overheads.
PAGE 28
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STRATEGIC HR REVIEW
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VOL. 8 NO. 1 2009, pp. 28-33, QEmerald Group Publishing Limited, ISSN 1475-4398 DOI 10.1108/14754390910920457
Mark Goodridge is based at
ER Consultants,
Cambridge, UK.
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