After almost a decade of wanton expansion it looks like belt-tightening time has come around. I suppose it was inevitable – a good thing cannot last for ever and the wheel has to turn – but, my god, slowdown is boring. Business is so much easier to conduct when people feel optimistic and just say yes. But now that we’re entering a time of caution, you get all that utterly unhealthy anxiety, indecision and paralysis. There’s no doubt that plenty of daft things happen when things turn down. Imaginations are dulled, great opportunities are missed and the wrong bits get the chop as crude cost-cutting mechanisms swing into action. Irrational exuberance is one thing but irrational negativity is another. Fear is much more contagious than greed.
As a journalist, one is not supposed to complain. Everyone already thinks we’re just a bunch of whinging Jonahs. A bit of strife throws up good stories, and Northern Rock was just the start of a series of real corkers that will keep on coming for some time yet. But I’m already growing weary of people in business coming up to me and blaming the whole thing on the media talking things down. Did they really think it could go on for ever? Nobody in the media could have been smart enough to invent collateralised debt obligations as a means of offloading all that toxic sub-prime debt to the mugs who bought it. (And, anyway, when did we ever talk things down on MT?)
You cannot, however, go around like a grinning village idiot pretending that all is well in the garden. That’s especially true of those at the top. It is, in many senses, far harder to lead in adversity than when things are booming. Staff are fearful for their jobs and their welfare outside work and they look up for reassurance. Clear and truthful communication becomes even more vital, as does the lifting of spirits and the emphasis that, despite slowdown, the focus should remain on seizing the few new opportunities available. When heads are down, it's difficult to see the lights ahead.
One of the nastiest tasks of the manager is the role he or she has to play in that most unpleasant of processes: 'letting people go'. It's the toughest ten minutes most bosses have to face. If and when such ‘de-layering’ (who ever invented that expression? let’s hope they were ‘down-sized’ for their pains) becomes unavoidable then there are good and bad ways of carrying it out. And how well you do it will affect your company in the long term. The careless loss of intellectual and human capital only began to dawn on many in business after the ham-fisted way in which widespread redundancies were made in the early 90s. It took many organisations years to recover.
