There’s no denying there has been a significant amount of instability and volatility in recent years. The ongoing uncertainty over Brexit means the pound continues to fluctuate while Trump’s presidency delivers unpredictability on a whole new level. Added to which businesses have had to cope with the new GDPR legislation.
We should be used to dealing with this level of uncertainty but instead the temptation in tough times is often for businesses to batten down the hatches. Far from doing the very thing that would help, such as innovation and development, budgets are tightened and projects put on hold. The message is often to retrench, keep your head down and not do anything different.
So if you’re a financial director or MD, what should your response be instead? How can you position your business for growth not decline?
First of all, the automatic response shouldn’t be to tighten up on expenses or put everything under minute scrutiny. It’s actually at times like these that you should be empowering your staff and giving managers their own budgets (after all, they’re closest to the day to day operations and can best understand what cuts can be made without negative consequences). You’ll still be in a position to have the oversight of the overall financial health of the company but your managers can make the decisions they need to be able to.
Focus on using technology to give your team the information they require. Make sure you have one central system that is user-friendly where data can be easily stored and accessed. This will ensure staff aren’t tempted to create their own micro-systems where you end up with lots of parallel spreadsheets, all in danger of not being kept up to date. If you can give them actual performance data that relates to their own budgets on a daily rather than monthly basis, you’ll find this inspires action and clarifies goals.
Try not to micromanage or tighten control so much that you stifle creativity and discourage new ideas. In times of recession or financial turmoil, leaders can unfortunately sometimes become autocrats, obsessed with targets and ticking boxes. If, instead, you can set a clear vision and foster a feeling that you’re ‘all in this together’ you are more likely to end up with a well-functioning and motivated team. Rather than drawing up the drawbridge you’ll then be in a position to do business while your competitors may well be retracting. Or as Kipling put it, ‘if you can keep your head, when all about you are losing theirs…’Posted In : Financial Planning, Business