As we moved through 2025, the year was clearly not what business leaders were hoping for. The recent fall in GDP is evidence. Business leaders need a deliberate plan to get through a difficult economic period, and companies that innovate and invest in their people during lean times emerge stronger.
It’s not the time to hunker down
Xero is a case in point. Founded in 2006, it not only survived the 2008 global financial crisis (GFC) but emerged as a game changer in cloud-based accounting software. This was largely due to its focus on innovation, action and investment. Similarly, Mainfreight emphasised company culture during the GFC, ensuring key talent was retained and a strong team was in place to drive the business forward, resulting in global expansion.
How businesses respond right now is crucial. This requires shifting away from a reactive approach and hunkering down to identifying and acting on strategies to thrive. It may involve innovation, technology, diversification and market expansion, but the people component is just as vital.
Lead by focusing on your people
These are some key strategies to adopt.
Set the vision and get buy-in
A fundamental aspect of leadership is to set the vision. While most leaders think they do this well, their teams will often report that the focus hasn’t been clarified so they don’t give the necessary commitment. Be deliberate in knowing and communicating why your team/business exists, what success looks like and where you are heading. Be sure to overcommunicate this. Typically, when you think are overcommunicating, the team will think the communication is about right.
Focus on values and strengths
Knowing what is important to you and the values that drive your decision making in business is very powerful when done well. This is the stuff that your people connect to and what builds culture. Run a process to set your values, include your team and then live by what you’ve said. Likewise, understand what your strengths are as a team/business and lean into these. This will build an identity within the business and establish a strong reputation outside of it, which can become a powerful competitive advantage.
Maintain culture
A strong culture is a key retention and talent acquisition strategy. Psychologist and behaviour change expert Ron Friedman outlines three core focus areas in his book The Best Place to Work: The Art and Science of Creating an Extraordinary Workplace:
- Relational connectivity – be intentional about establishing connections and enhancing communication touchpoints with your team. Research shows that, when staff feel supported by their colleagues, they are less likely to experience challenging events as stressful.
- Grow competency – be intentional about developing your people. Provide access to opportunities for people to grow and develop, ensure that development plans are in place, give feedback, hold one-on-ones and provide mentoring and coaching. Tools such as personality profiles, 360° reviews and team sessions also grow people.
- Autonomy – be intentional about giving people autonomy and choice. It boosts motivation and enhances performance on complex tasks. Delegate, allow people to define their own approach, encourage input and provide meaningful context for their roles. If not, team members will be left demotivated and disengaged and performance will drop – not what we need right now!
Talent acquisition
A mistake leaders often make during difficult economic periods is to put a hold on recruitment initiatives, which can result in vital talent not being secured. The talent market has eased, so there’s an opportunity to source the right people to drive your business forward.
A final reminder
Pay attention to your dialogue. While the year may feel like a tough grind, changing the dialogue dial to a more positive and upbeat rhetoric will start to instil confidence in your people and customers alike. It not only increases morale, it also de-escalates stress levels, assists with good decision making and makes for a more resilient workplace.