Thankfully, I have never been in a war and, until 2019, I’d never experienced a pandemic. However, I have led companies through extremely difficult times. These include Black Monday in 1987 when the stock market fell by 36%; the 1990s’ recession when UK interest rates peaked at 14.8% with unemployment at 11%; and the global recession of 2008 – 2010. 

In every crisis, we worried if the markets would ever recover – but each time they did. However, each of these events resulted in many businesses failing.

The good news about the current economic situation is that the economy will recover and great businesses will be built or rebuilt. If you’re a business leader right now, your first priority is to ensure your company is still around to benefit from the investment overhang and opportunity for growth that will follow the difficult times. As the economic cycle resets, the market will swell and a period of expansion and increased consumer demand will follow. 

My experience of leading companies through the economic disaster zone is that, with different thinking, it is possible to emerge stronger than ever. In tough times, the most able leaders will reassess and clarify the vision of success for their organisation. They will challenge and redefine the business model and prepare their team for long-term success. Great leaders will step ahead. 

The organisations that will emerge as the most successful are those that have used the period of crisis to build a world-class team, in which each member knows how they can contribute to achieving the company’s success. 

It doesn’t matter which industry you’re in or the size of your business, there are some key issues that all leaders need to get right.

Cash

At the beginning of the pandemic, many businesses suffered from a dramatic drop in cash flow. Cash is the lifeblood of your business, so as the economy continues to be difficult, interrogate your income statement – look at every line (and I mean EVERY line) and identify creative and intelligent ways to reduce expenditure or liquidate assets to preserve cash. 

Your first loss is your cheapest loss. Defer dividend payments and bonuses. Give the company breathing space to prepare fully for the long term. Banks are making warm noises and governments have provided programmes of fiscal stimulation that your company may have qualified for – but look to the future and consider extremely carefully how your cash flow will be affected by the new market order we are now living in. 

Communicate, communicate, communicate

Brave leaders are open and honest. Difficult decisions need to be made to succeed in the new world and everyone in the team knows that. But the support for those decisions depends upon a shared understanding of what and why. Uncertainty breeds rumours and false information. 

Regular briefings, CEO news updates, conference calls, visibility and transparency will reduce fear and improve confidence. Provide forward news – build trust by telling the team before telling the market. Talk about long-term goals as well as short-term actions. Explain what success looks like and work back from there.

Attracting and retaining the best talent is a key to long-term success. People are attracted to work in environments that are open, encouraging and inspiring. Make sure that team members are authorised and accountable for the decisions they make. Treat everyone with respect and recognise that sometimes it will go wrong – see these situations as opportunities to learn.

Clients

Include them in your communications and discuss your decisions with them – and don’t forget that your suppliers and business partners are your clients as well. Ask how you can help them. What are their fears? Your customers are likely to have changed their business model and you need to be responsive to their revised needs.

Remember, that despite adopting some short-term tactics, this is a long-term plan: strengthen relationships now with investment in time and attention. You will be paid back many times over when the environment improves.

Courage

Stay calm and build. Running a successful business is simple, but not easy. In times of challenge, strong leadership is key. Your team will respond if you offer them clarity, confidence and considered decisions.

Challenge the norm – don’t be satisfied with “we’ve always done it this way”. It takes courage to question why things are actually done that way. 

When was the last time that your company critically analysed the fundamentals of the business with everything on the table for inclusion? The world may never be the same again – make sure your business is fit for the new future. 

• Kevin Gaskell is a serial entrepreneur, author and a leadership expert responsible for transforming three of the world’s most iconic brands: Porsche, BMW and Lamborghini (GB).