Recession 2008: Take the Offensive

A lot of managers are now readying their team for Recession 2008 and are thinking in ways that are completely understandable and, according to Tammy Erickson, likely to be wrong

by Tammy Erickson

Posted on Across the Ages: January 22, 2008 1:31 AM

Being neither an ardent football fan nor an economist, I nonetheless find much of my news absorption these days dominated either by the Super Bowl (yes, I am from New England) or the possibility of a looming recession. So, if you'll allow me this week, I'll offer my reflections on those two pending events.

There are two moments that I love in football games. One occurs whenever it becomes obvious that the team has reacted to the unfolding events on the field, doing something that is quite different from what they'd originally planned to do—the pass options are blocked and the quarterback decides to run with the ball, the ball is intercepted and suddenly a defensive lineman is lumbering down the field. Great teams know each other well enough to re-group in motion.

The second moment I love is the "fourth and two." For all of you who live in any other part of the world than the US, places where football is played with a round ball, "fourth and two" is a nail-biting moment of decision. It's the time when the team who has the ball can either decide to "punt"—to kick the ball as far away as possible—or "go for it" and try one last time to make the yards necessary, with the risk that failure will give the other team a sizable field advantage. Most of the time, the smart move is to punt. But, once in a while, it makes sense to take the risk. My home team, the Patriots, go for it at times. I love seeing teams make these calls.

Now we may be headed into a recession. If so, it will be the second in more than fifteen years. Defined as two or more consecutive quarters of negative growth in the GDP, the last official recession in the United States happened in 2001. And plenty has changed since then. If indeed we're headed into that game, what's the best way to prepare your team?

A lot of senior managers are now readying their team for Recession 2008. Most are thinking in ways that are completely understandable—and in my view—very likely to be dangerously wrong. Most standard wisdom advises caution and control—review your costs, tighten your approval criteria, pull key decisions and sign offs up to higher levels, make sure everyone in the organization is as fully busy as possible, narrow the business scope.

That approach might work, if the nature of the recessionary environment were known or easy to predict. But it's not. Rather than trying to tighten control and hunker down, I'd suggest that you think about ways to make your team better able to improvise given whatever comes along. Four things will help your organization become more spontaneous, innovative and reflexive:

(1) Increase your firm's "collaborative capacity" through relationships, trust, and knowledge exchange. Don't cut out meetings, intensify the competition among internal teams, or reduce investments in learning.

(2) Articulate a compelling "innovation intent"—something that, in the language of complexity theory, will serve as a "strange attractor" to rally your team around goals that are intriguing, complex and important. Don't narrow the focus to the mundane or over-specify the way teams should approach their challenges. Keep them engaged.

(3) Ensure that your team has regular on-going exposure to disruptive insights through diversity and external forays. Don't cut travel or fall back on the old "tried and true" team. Bring in new people and new ideas and take them seriously. Get outside your business sphere.

(4) Provide everyone in your organization with some specific tools to help with innovative thought processes—teach people how to brainstorm, use scenario analysis, or create ideas through attribute reduction. Don't cut training—invest in your people. Teach your employees how to be a business innovator so they can improvise in motion.

And, occasionally, take some risk. Go for it on a fourth and two.

Provided by Harvard Business—Where Leaders Get Their Edge