by Dr Chuma Osuchukwu
•
07 Nov, 2022
Following recent reports from major print and digital news media like Reuters, Wall Street Journal, Financial Times, BBC, Sky, CNN, etc, the UK economy is on the edge of recession. Some of them even claim that the UK is already in recession. The Financial Times of November 3, was very direct when it reported that ‘the BOE’s [Bank of England’s] 0.75 percentage point increase to 3 percent took interest rates to their highest point since 2008.’ It further added that ‘even if interest rates stay on hold at 3 percent, the BOE still forecasts a recession for five quarters, based on higher energy prices and mortgage costs.’ This means that the recession is likely to remain with us till the first quarter of 2024 at the least, following the BOE’s forecast. The question then is, what does this mean for leaders in all sectors of the UK economy and how can executive coaching intervention help leaders and organisations to wade through this wave of recession that has now become a reality? Recessions compel leaders and organisations to adopt the usual cost cutting measures like, laying off staff, minimising or suspending capital expenditures, renegotiating terms with suppliers, putting new investments on hold, etc. These short-term strategies are designed to buffer the immediate effect of the recession, which on their face value are good measures but there is corporate existence after recession. Going by previous recessions, many leaders seem to focus entirely on the survival of their organisations during recessions but could there be other ways apart from survival strategies to ensure that organisations thrive after recession? There are pertinent questions that must be addressed as the short-term measures are being put in place. For example, would leaders be able to hold in tension, the short-term decisions of organisational survival and strategic decisions of organisational growth and productivity? Yes, growth in a period of general economic decline and less consumer demand is possible! In the survival strategies, how would the core staff members be motivated enough to shoulder increased responsibilities as a result of layoff of their colleagues, and still maintain their mental health? The panic that results from the effects of recession on organisations can sometimes lead to actions that sabotage organisations’ performance, productive and progress. The good news here is that, contrary to general expectations, recession is not all about bad news of shrinking GDP, price increases, lowering of production of goods and services etc. The impact recession has on an organisation is dependent on the measures or lack of measures that are put in place as it is becoming evident that recession is here with us. It needs to be borne in mind that recession does not affect every organisation in the same way. While some decline, others thrive in recession and the question is why? What do the organisations that thrive in recession do or avoid doing that others that decline are not aware of? While the leaders that panic and take short term decisions and actions at the expense of strategic decisions often get adversely affected, the leaders that do what sometimes appears counter intuitive, take advantage of the opportunities that recession creates. During this recession, that is likely to be more than a year-long in duration, if the forecast of Bank of England is correct, leaders that are creative and innovative with their decision making, those that focus on holistic thinking, will be well positioned to take advantage of great opportunities in the recession. For such leaders, one of the major things to focus on at this time is leadership development. This is where executive coaching comes in. Executive coaching has been shown to be a very effective leadership development intervention in and out of recession. The leaders who do not engage with executive coaching may not have familiarised themselves with the benefits that personal experience and research have validated as being incredibly useful to leaders and their organisations in times like this. These benefits include: • Enhanced performance in relation to direct reports. Leaders who engage in executive coaching not only experience higher and better performance themselves, they engage better with those they line manage. • Executive coaching challenges leaders to think creatively as ‘desperate situations demand desperate measures.’ In times of recession, leaders would need to enlarge their capacity by engaging with ‘external brains,’ that is, executive coaches that are not in the situation with them so that they can bring in fresh perspectives to activate the minds of the leader and collaboratively create new ideas and new outcomes for the organisation. • Executive coaching enhances the influence and authority of the leaders who carry their teams or organisations into creative solutions at a faster pace, sometimes through unorthodox ways, to keep their organisations afloat and progressing during this period of economic downturn. Whatever format, sounding board, challenger, professional mirror, facilitator, etc, the executive coach helps the leader prioritise competing demands. • Executive coaching is a cost effective intervention that returns huge ROI and delivers on specific strategic objectives. The return on investment is quantifiable and easily assessed to determine its contribution to the development of the organisation. • It brings about the development of a coaching culture within the organisation. The purpose of this is to create more leaders, not followers. In the coaching culture, things get done because every leader is taking initiatives towards the realisation of the organisation’s vision even in precarious times. • Leaders are assured of high confidentiality and personal attention on complex matters during this crisis period. The leader’s confidential matters are sealed and help give the organisation, a competitive advantage in normal as well as in crisis times. I can go on listing all the benefits of executive coaching for leaders and organisations, many of which you already know or have benefitted from. The important thing, however, is that from experience, it is better to start working with an executive coach who can think creatively and innovatively with you to put the necessary strategies in place before the wave of recession gets to your organisation. Is this helpful? Dr Chuma Osuchukwu is an experienced Executive Coach. He is a former diplomat and the CEO of Apex Leadership Consult, London. He can be reached on Drchuma@apexleadershipcentre.ac.uk. Want to know more about Dr Chuma, read here .