Welcome back to Talentism’s Sensemaker. Talentism helps ambitious leaders achieve their business goals by turning confusion into clarity. Today we’re focusing on strategies for succeeding in an economic downturn.
Lions, Tigers, and Bear Markets Jeff Hunter, Founder, Talentism
Matt Skaruppa, CFO, Duolingo
You’re being chased by a lion. Your endocrine system kicks in, readying you for fight or flight. Your vision narrows, your heart pumps, and your capacity for abstract and creative thought is diminished – survival mode. Millenia of evolution have shaped this response in the human brain and body.
Only there is no lion at your heels. Instead, you face economic uncertainty, investors urging a shift in strategy, and employees losing faith. These threats elicit the same physiological response as a predator does, but require the very things your stress response turns off: higher-order thinking and creativity.
While economic downturns present threats, they also create opportunities to win. History shows that winning companies are forged in such times, if they have the right leaders. To be the right leader you must recognize the threat you’re experiencing, acknowledge how fear impacts you, and get above the protection behaviors that come with it. Here are some strategies for doing so.
1. Make it about meaning
Humans are meaning-making machines. We spin our experiences into stories: creating narratives of good and evil, assigning major and minor characters, and anticipating endings. Our stories tend to reinforce how we feel. A happy person is more likely to believe in leaders. An afraid person is more likely to be distrustful and believe the worst of others. These narratives often have little to do with reality, but we filter new experiences through confirmation bias and create a reality that conforms to them.
As a human being, it’s normal that you’ll make up narratives like everyone else. But unlike everyone else, your narrative as a leader will shape the realities of those who work at your company. If you think the company is going to fail, others will too, even if you aren’t expressing your beliefs directly. Most leaders know this, which leads to behaviors like giving inspirational speeches, being enthusiastic when others are down, and trying to find the silver lining. These behaviors are ineffective because people have good bullshit detectors. If you believe one thing but say another, it only increases people’s fear. How do you take your fears and make them productive? By finding meaning.
Ask yourself, why do you care if your company succeeds or fails? Why is the work you do important? These questions can help you find meaning. Once you find it, you must:
Make every decision with that meaning in mind, and
Talk about the meaning with your employees. Be compassionate, and help them understand why their work is meaningful.
Meaning helps you turn the inevitable confusion of an economic downturn into productive action.
2. Be clear on your goals
Over 90% of our management-level clients share that they are clear on their goals. When we ask them to name those goals, fewer than 30% can. And when we ask teams about their goals, less than half articulate the same goals as their manager.
A lack of goal alignment leads to wasted time, capital, and attention. When money was cheap and available, you could paper over this problem. Now you can’t afford to.
3. Synthesize more often, not less
Economic uncertainty is like an ocean current. It gets stronger over time, and changes without notice. Imagine that your job is to swim through that current to reach the shore safely. What do you do?
Most leaders will put their head down and swim like hell. But people who do that drown. The current carries you further from the beach, and you end up exhausted and miles from shore. It’s better to swim in short bursts, and pick your head up frequently to see where you are and adjust course and speed. The stronger the current, the more important this is. To “pick your head up frequently,” ask yourself these questions every week, for each goal:
Are things going better or worse than they were last week?
Do I feel more or less confident about achieving the goal?
What am I missing?
Keep swimming if things are better, you’re feeling more confident, and you don’t believe you’re missing anything significant. But if things are worse, your confidence is waning, or you realize you missed something important, change course so you don’t drown.
4. Deal with emotions openly
It’s in our business culture’s DNA to “be professional.” We all interpret this differently, but mostly it comes down to not showing emotions, keeping your shit together, and not bothering anyone with your problems at work. Leaders form this expectation of themselves and others.
We like to believe that we are rational beings making rational decisions in times of crisis. But humans experience things and have reactions. Most of the time we react intuitively and rationalize afterwards. Our business decisions are deeply affected by every part of our experience: pandemics and loss; systemic bias and the resulting stress; wars; inflation; uprisings; and yes, the loss of security from economic turmoil.
The realities affect you every day, in every way. By expecting them to be sidelined at work, you’re building pressure to a point that cannot be contained.
Get help making sense of your experience and the stress that you face as a leader: a clarity coach, a mentor, or a spiritual advisor. Share the insights you get from that with others. Be vulnerable and communicate your struggle through the lens of meaning and the goals of the organization. Express that you expect others to also be honest, get help, communicate learnings, and make sense of things in service to the larger goals and purpose you all care about. Seize this opportunity to win.