Economic Combat-Readiness

June 29, 2022
By iQ Staff
A person pushing against a giant red downward arrow.

When a business is under pressure, its leaders’ decisions and actions are subject to heightened scrutiny. Are you ready for what lies just around the corner?

Many economists – and a majority of consumers – now believe an economic recession is imminent. Leaving out the two-month economic blip at the start of the COVID-19 pandemic, we’ve been operating in a period of economic expansion since July of 2009. Now, as a potentially higher-magnitude global recession looms, many business leaders are faced with situations and decisions they haven’t encountered in 13 years – and some never before in their working lives. Their decisions and actions in the period ahead will have potentially enormous consequences for their businesses and their brands.

WW International (formerly and still popularly known as Weight Watchers) offers a cautionary tale. In the early days of the pandemic in 2020, WW laid off thousands of employees during a mass termination that occurred via three-minute scripted Zoom calls. For those who lost their jobs and those who remained, as well as for WW program participants, the action did not reflect the company’s vision of being the “world’s partner in wellness” or live up to its culture of community and friendship. This inconsistency led some to speak out via social media and resulted in high-profile news articles that tarnished the brand’s reputation and created uncertainty about the business’ future.

Incidents such as these cause customers, employees, business partners and investors to reexamine their relationship with a brand.

 

People care not just whether a business achieves its objectives, but also how it achieves them.

 

How can you prepare your organization and minimize the risk of costly reputational missteps?

  1. Begin by creating a task force to identify and scope recession-related risks. Think beyond just the prospect of declining revenue – risks also arise from cultural misalignment, investor impatience, competitive vulnerability and other factors.
  2. Develop scenario plans to understand the threats and opportunities associated with various business decisions and outcomes.
  3. Reconsider your mission, ensuring that it’s founded on a meaningful purpose, to facilitate understanding and organizational alignment through the economic cycle.
  4. Make sure company leaders have the tools and skills needed to conduct difficult discussions in a way that’s both consistent and humanistic.

Regardless of timing, we all know that economic recessions occur periodically. That’s why those who are unprepared invariably suffer the consequences.

iQ 360 offers a Recession Toolkit that’s quick, strategic and pragmatic. Contact us to learn more about how we can help you manage the risks associated with economic recession.