How can companies navigate economic uncertainty and build resilience in their organizations?
1. Contain costs. When met with financial constraints—or the need to rapidly invest in growth areas—it will be critical to contain unnecessary expenses. Consider what costs can be pared back:
• Can you pause certain projects and initiatives and reallocate funds where there is the greatest opportunity for growth?
• Do you need to maintain your physical workplace, or can you trim the overhead?
• Can you consider alternative staffing models to reduce costs?
2. Build a safety net of liquidity. Whether your business needs a capital reserve to invest in areas of growth, or to pay the bills while waiting out the storm, conserving liquidity will help fortify the financial health of your company. Investigate all potential funding sources available, as well as the terms attached to potential loans and grants.
3. Cultivate a nimble workforce. An adaptable workforce is key to scaling your business up or down. Be prepared to: reskill and upskill your existing workers to fill new roles; staff for agility so workers can serve as pinch hitters to serve areas with spikes in demand; and consider hiring contractors and freelancers in roles with a lot of variance of demand.
4. Outsource infrastructural needs. One way to minimize fixed costs and ensure best-in-class operational agility is by hiring external experts for non-core business functions, such as technology, finance & accounting and human capital resources. Business operations are critical to maximizing workforce productivity and financially navigating a challenging climate. External experts working with companies across industries to scale during a recession can offer tried and true best practices to chart what would otherwise be uncharted territory.
While it’s impossible to know precisely what lies ahead, companies that take these four steps will be better poised to contend with whatever comes their way—whether it be a recession or an unprecedented growth opportunity.