Leadership During Hard Times

Leading – and Succeeding – in a Downturn

Your positive energy will help your team get through hard times.

However, when the economic conditions are challenging, this excitement and positive energy can weaken. People feel the pressures of work, and they fear for their jobs. These worries and fears present a significant challenge for leaders who need to keep their teams productive and on target. One of the keys to protecting yourself and your business in an economic downturn is to develop a culture that builds and sustains effective leadership practices. 

After all, good leadership is good leadership, regardless of the economic climate. However, during difficult times, top-notch leadership skills become even more critical. Second-rate leaders might be able to keep a company going in a healthy economy. However, you need high-performing leaders if you’re going to succeed in tough times. That being said, of course, you need leaders who can control costs and conserve cash.

Moreover, successful companies require leaders who see opportunity – and who will strive to seize that opportunity – despite all the negativity. Companies need leaders who remain committed to their people and leaders who can transfer their positive outlook to the people around them. 

Here are a few helpful tips: Leadership is especially critical when organizations have to adapt to demanding business environments. When times are good, leading a company or a team is exciting. Resources are plentiful, customers are satisfied, and opportunity is everywhere. 

Create New Opportunities

In an economic downturn, you need to conserve your resources so that you can survive. However, be ready when the economy recovers. An economy in decline is often an opportunity to regroup, rethink, and renew. To take advantage of new opportunities, consider doing the following:  

Review your strategy – Figure out which objectives you’re meeting, which ones need more emphasis, and which ones you should reconsider or drop as the environment around you changes. 

  Lead by example – Now, more than ever, you have to lead “from the front” by setting an example. Take personal responsibility for customer care and contact. Actively help pursue new business. Show that you’re willing to make extra effort to commit to the organization’s success.  

Commit to the success of your team members.

 Add value – One of the ways that leaders can gain more significant market share and improve operations is by really listening to their customers. Look for innovative ways to add value without adding costs, and win customers who aren’t being well served by your competitors. 

 Use market conditions to create a more robust business model for the future. If you’re a senior manager, consider looking for bargains, regarding mergers and acquisitions, which will improve your company’s future competitive position. Whatever level you’re at, negotiate more favorable rates with suppliers, which you can continue to enjoy as the economy recovers. 

    Take the opportunity to trim costs – Encourage cost-consciousness within your team or organization. Now is a great time to do this: everyone knows that times are tough, and people will be more willing than ever to cut unnecessary costs. 

While cutting costs, yes, that will include one of the highest values of all to every company. Labor. If you are in a position where you have to lay off, please remember to be considerate and that you are dealing with the most valuable commodity of all, “PEOPLE.” Be kind, Be clear. Leave them with their integrity. In essence, treat them just as you would like to be treated. Be the Leader you would have wanted in a time like this.

  Implement a continuous improvement plan – Look at your systems and processes to find efficiency opportunities. Lead the way in building a culture of constant improvement. You can use these savings to pursue opportunities created by the downturn. 

Commit To Your People:

Negative messages are all too familiar during economic downturns. People are losing their jobs, unemployment rates are going up, and personal and corporate bankruptcies are increasing. These things can weaken morale, both in the workplace and in society as a whole, and it can tip people into a panic, severely damaging their productivity. Don’t abandon your people. Use this time to reinforce how important they are and build the skills they need to help the company survive.    Invest time in leadership skills training – Leadership is key to success and endurance. The more effective leaders you have, the better it is for you, your team, and the organization. OK, you may not want to spend a lot of cash on leadership training. However, when times are slow, you may be able to invest much more time than before in management and leadership development.

 Retain your best people – Part of good leadership is keeping costs under control. However, profits are made by people. Don’t cut back on attracting quality candidates, and make every effort to retain your best team members by treating them with dignity and respect.

   Be creative with recruitment and retention – Salary increases may not be possible, but you can do lots of other things to create attractive work conditions. See our article on Managing During a Downturn for specific ideas. 

 Get rid of poor performers – Poor performers use up your time and energy. They frustrate co-workers and damage overall productivity. Now is the time to get rid of these people, because you can’t afford to keep them. Some of your other team members may be relieved not to have to “carry” poor performers any longer. And when your staff sees that you use budget cutbacks to benefit the team, they may be less upset than you might expect. 

  Build a motivating workplace – It’s easy to focus intensely on specific tasks and the bottom line, especially when performance expectations have such significant consequences. However, as a leader, you can’t let that stop you from

finding ways to motivate your workforce.    

Sirota’s Three-Factor Theory suggests the following: 

 Treat people fairly – When you can’t avoid layoffs, give people as much warning as you sensibly can. Talk honestly about what’s happening, and how cutbacks will affect them.  

Foster good relationships at work – If you have to stop the Friday company-sponsored lunch at a restaurant, replace it with a low-cost potluck event. Try to avoid cutting it entirely. 

 For more ideas on improving individual motivation and performance, see our article on Herzberg’s Motivators and Hygiene Factors. 

 Project Positive Energy 

Good leaders provide hope and vision. These two qualities can keep a workplace going, even during tough times. People need someone they can trust – and someone who is inspiring and knows how to get things done. As a leader, make it a priority to do the following:

 Expect great things from your people – The more you demand, the more opportunity you give people to perform, which can be highly motivating. However, don’t push too hard and remember to communicate your expectations. 

  Keep in touch with your people – Use the MBWA 

(Management By Wandering Around) technique to find out what’s going well and what needs your attention. Remember to recognize and praise success. In tough economic times, you need your staff to perform exceptionally well: the more they know you care, the more likely they are to respond to your call for action. 

 Be visionary – Leaders with vision, passion, energy, enthusiasm, and real engagement with their staff are the critical drivers of economic growth. Stay focused on the big picture, and manage to the best of your abilities. 

 Take care of yourself – Respect your feelings and emotions during difficult times. Where appropriate, share your concerns with people you trust, and build a network of people you can talk to. On the other hand, if you’re worried continuously, others may sense this. Get enough rest to keep yourself fresh, and manage your emotions to keep your creativity and self-confidence high.  


  1. Leadership during good economic times has its challenges. But those challenges increase when the economy is tight, and when staff is worried about keeping their jobs and paying their bills.  
  2. In these conditions, leaders and managers must keep a sharp eye on their environment, prepare for recovery, support their people, and project enthusiasm and energy. 
  3. By remaining positive, supporting your people, and looking for new business opportunities, you can help your company survive – and succeed – through the difficult times. Leadership performance is critical to organizational success, so use all of the assets available to you.

Published by Quackenbush Coaching LLC

Welcome to Quackenbush Coaching. I am Jewel Quackenbush a Master Certified Coach specializing in leadership, career transition, life, and executive coaching. I partner with clients in a thought-provoking and creative process that inspires them to maximize their professional and personal development. As a professional coach, I facilitate a blueprint for growth. This collaboration serves my clients and enables them to reach their fullest potential. If we can dream it, and we believe it, we can achieve it! I have extensive experience working in the coaching, training, hospitality, and medical industries. I am passionate about assisting organizations and individuals in accomplishing their goals, meeting deadlines, and creating cultures by exploring and honing their powers of creativity, examing processes and best practices, and communications so that the path to fulfillment is clear and attainable. I promote transformational, personal, and organizational change, business growth, leadership development, talent management, employee engagement, productivity, and communication.

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