Magazine article New Zealand Management

Leading in an Economic Downturn

Magazine article New Zealand Management

Leading in an Economic Downturn

Article excerpt

What is the secret to maintaining motivation in a downturn? How do you stop talent walking when the going gets tough? By providing clarity of direction, leading well and setting an example from the top.

Businesses that win in a downturn are the ones that engage with their employees, providing reassurance when necessary and clear direction to all.

Sure, it feels better when markets are rising and everything is buoyant. But economic cycles are a fact of life and from what we are seeing and hearing it appears that New Zealand is in the full grip of a downturn.

In global management consulting firm Hay Group's experience globally, the really successful organisations and leaders in times like these will be those that treat the downturn as an opportunity.

In preparing to survive economic uncertainty, effective leaders will be clear about who is accountable for what and their governance models will promote speed, agility and better decision-making.

What it comes down to is employees who are engaged by the right kind of leadership, who have clear goals and feel recognised for their efforts, give more discretionary effort (give beyond what their job demands) and this effort flows through to the bottom line.

Hay Group has shown that climate improvement programmes can translate into up to a 30 percent increase in the amount of discretionary effort individuals are prepared to give, which in turn translates into increased organisational results and profitability.

Hay Group is making a case for unconventional wisdom--and encouraging you to take the road less travelled during an economic downturn. That is to think twice before you decide to slash staff numbers, cut HR budgets and stop investing in the development of your people.

We argue that clarity of direction, a sharpened focus on employee engagement, and not just focusing on the balance sheet, will both improve your organisational climate and stem the loss of key people that often happens during these tougher times.

Improving an organisation's climate can have a huge impact on performance of your people and in turn the results of your organisation. Improving an organisation's climate means creating an environment where everyone is able to perform to the best of their abilities. …

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