A middle manager’s guide to managing in an economic downturn
You are a manager or director in a small or medium sized company. This is your first or second management role and you have never experienced the business turmoil of the past two weeks. What should you do now and what should you be doing next?
The answer to the first question is likely more obvious. A middle manager serves two masters: their employees and their company. On the employee front, the first responsibility is everyone safe. On September 11, 2001, I was leading PeopleSoft’s Canadian Global services team and part of our global leadership team. Globally, most of our Services employees were spread across North America and around the world, working at customer locations. For me, 9/11 was spend tracking down and verifying that we knew where every PeopleSoft employee was, that they were safe, and building plans to keep them safe until we could get them home. With COVID, the challenge is different but similar. Are all your employees taken care of; do they have a place to work; are they healthy; is their family ok; is there anything you can do to help them?
Once this covered, attention needs to turn to your customers’ and company’s needs. Is your company able to continue to deliver to the needs of your customers? Are their new customer needs you can take care of? What changes need to be made to keep your team running to meet their mandate? Are the systems and processes needed to run your company still functioning and if not, what needs to be done to restore them?
Throughout this process, the common wisdom is communicate, communicate more and even over-communicate. Establish a cadence to regularly check in with your team to assess how they are doing individually and as a team. Some companies have started virtual coffee breaks or happy hours where team members can get on a video conference for the purpose of socializing and sharing companionship.
Once the immediacy of the above is past, your attention is likely to morph to the future. What is the economic fallout and consequences of downturn for you, your team and the company?
Every situation will be unique. I talked with a CEO yesterday. He and his CFO have been hunkered down all week assessing their financial situation as customer shutter operations and revenue streams are paused. Their primary goal is survival while maintaining the ability of the company to be ready to respond once the recovery comes. Fortunately, they have a healthy cash position that allows them to retain all employees for at least the next year based on the significantly reduced revenue projections that they are anticipating.
Not all companies will be so fortunate, and some will need to reduce staff. For companies that can retain all their staff, another question may arise that if normal workload reduces or goes away, what else can employees do to add value to the company while it is in a holding pattern.
As a middle manager, these scenarios will affect you and your team, and you need to be ready.
Here are some of the things you should be doing to be ready:
- Assess your team: Inevitably, you will be asked who are your top employees that need to be retained and who are your weakest performers that could be terminated or laid-off? I would recommend stack-ranking your team from most valuable to least? This is sometimes called a “lifeboat drill” where you place your most valuable employees into the lifeboat first. Often companies will have two classes of lifeboats: Leaders and Doers. Earlier in my career, I was once told by my boss’ boss that I was the first person he would put in the lifeboat as a “doer” but the last person as a “leader”. Consider many attributes such as outcomes achieved; attitude and leadership; subject matter expertise in both your domain and industry; customer facing skills; geographic location and so on. Factor balancing these skills into your stack ranking exercise and remember if you must downsize, you still need diversity of these attributes represented on your team.
- Assess your team’s workload: What has changed? What is new? Has your team’s responsibilities changed? Has workload shrunk or disappeared? Build and short-term plan to handle immediate issues, but also start planning for a new normal. What if your team now has 30% excess capacity and it will remain like that for the next several months? What initiatives have been on the backburner in the past because of lack of capacity? This is likely not the time for immediate actions because they will need to be fit into the company strategy, but now is the time for planning to be ready. Don’t be a bystander when asked for your opinion.
- Assess your customers: Everyone has customers. Some may be internal to your company that your team services and others will be external revenue generating customers. How have their needs changed and what new opportunities will there be for your team to offer new services to help them? Are their new revenue generating opportunity that didn’t exist last month? Are their brand building or customer services initiatives that will pay-back when recovery starts. Is there at-risk work you could be doing now based on getting a contract signed later, once your customer’s turmoil subsides? Again, this is likely not the time for immediate actions because they will need to be fit into the company strategy but be ready to offer options when asked.
If you do the above, you will be better positioned when your senior leadership starts asking for input into their survival and recovery planning.