There are a lot of unknowns in kicking off the second half of the year. Markets are volatile. Prices are up. Supply chains are still strained. The question has been around for a while now: Will we go into a recession?
Many CEOs aren’t too worried about this—but executives do need to be prepared nonetheless.
Part of executive leadership is thinking multiple quarters, and years, ahead. In the face of a possible recession: how can we bring stability and lead through an environment with so much uncertainty?
Mission first, people always
When businesses are in difficult situations, either/or scenarios often emerge. Where can we cut costs? Where should we invest to hit quota?
Ask yourself, what made you successful in the past and what will help you weather the storm? Often times, it comes down to great people. Those that can adapt to rapidly changing environments and deliver the products and services your customers value. That’s why it’s such a fine line between reducing headcount costs and retaining your existing staff.
If you have employee performance issues, you should be making those changes independent of the economic environment. If you don’t, think critically about reducing headcount to reduce costs in the short term. One, you may need those same people to grow your way back into financial stability. Two, you’ll be signaling to your best performers that they may be next. You may be creating a slippery slope with your human resources when other cuts are a better choice.
Be the partner your customer needs
In the B2B space, we often talk about “value adds” – things that are nice to have, like sponsoring customer events. While important, a better frame could be, “How do you establish yourself as the company your customer can’t live without?” Your customers need suppliers; they just don’t need all their suppliers. Position yourself with your customers so when their cost-cutting comes, they’re getting rid of your competition and not you.
In a previous blog, I mentioned there are three key areas that prove your value to your customers. These are your ability to increase their revenue, reduce their expenses, and reduce or mitigate their risk. As you strategize new and existing relationships, look through this frame. Are you hitting the mark? Are there ways you can double that impact, or perhaps hit all three areas? Do you even know if you’re impacting these key performance indicators?
Get paid what you’re worth
It’s important to understand your value to your customer (not all businesses do!). More so, it’s important to ensure you’re getting paid fairly for it. In challenging economic times, a good way to keep price and value aligned is to offer tiered product/service bundles.
In situations where customers are pulling back on costs, offer them a lower tier of service for lower pricing. Make sure your sellers are staying true to the tiers of service and teams are not discounting or giving away value for free. The more your teams “hold the line,” the better service they can provide at appropriate levels—and the happier they will be as employees as well.
In volatile markets, choice is king
As businesses become more cost-conscious, make sure you have enough distinct tiers of service that your customers have choices in how they partner with you. Don’t assume their priorities. Instead think through what’s most important to them in the second half of 2022 so you can be a stronger partner and offer the services they need.
Nothing puts leadership to the test like navigating volatility. Changes in markets can also lead to attrition, uncertainty at the individual level, and overall concerns in any business culture. Taking care of your people is paramount—including your employees, your customers, and your partners. Mission first, people always.
