The Influential Leader January 5, 2010, 2:21PM EST

Joseph Grenny: What the Recession Taught Me

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Most important, the influence of a positive vision infused our team with an optimism that enabled members to see and seize opportunities they would have likely missed had they been hiding out and weathering the storm. For example, while many of our peers canceled customer conferences on the assumption that no one would show up, we went ahead with ours—and had 10% more attend than the previous year. It turned out that there were so few conferences to choose among that ours became the obvious pick.

• The best time to communicate your values is when it costs you the most. We're a privately held company. As we developed our growth plan for 2009, we acknowledged the possibility that our plans could fail. We considered our options if revenues declined substantially. Labor is our largest expense, so it would have been irresponsible to avoid considering how we would respond if we began to run large, sustained losses. However, we also knew we could absorb some significant revenue losses if the major shareholders were willing to do so.

With all of them in the room, we said: "We have spent twenty years assembling the finest team possible to execute our mission. We will not lose one team member in an effort to defend short-term profits. We believe keeping the team together is worth more than defending short-term margins." The shareholders overwhelmingly agreed that until sustained losses drove us to it, we would not lay off a single precious team member. The influence of that message on our team was electric. It built a sense of unity and determination. Productivity, morale, and teamwork have never been better. The recession gave us an opportunity to breathe life into the tired slogan, "People are our greatest asset." Bad times offer the best times to communicate your values.

• A good economy can hide a multitude of sins. While we promised our team we would lay off no one to defend profits, we let them know that our performance expectations would not be relaxed. In fact, we asked all our managers and supervisors to keep the bar high. Furthermore, we challenged them to use the economic sense of urgency as an opportunity to question cost models, challenge productivity assumptions, and deal with performance problems—if there were any they had let slide in the past.

As managers measured up to the performance standards they should always have adhered to, we did let a couple of employees go. The recession was a useful impetus for managers to step up to the fiscal and human stewardship they should always hold to. I believe the higher standard will carry forward and am grateful for the nudge the economy gave us to take our responsibilities seriously.

• Breathe new life into the products and services you offer. A down economy is a terrific time to revisit the value of your company's products and services. Profit is the reward customers give you for solving important problems. If they stop rewarding you during lean times, you've got three choices: 1) Solve their problems better; 2) solve more important problems; or 3) solve their problems cheaper. We benefited from options one and two. My personal belief is that if you do one and two well, you rarely have to do number three.

• A down economy is the best time to hire. We recruited two new senior executives during the recession who might not have given us the time of day when the economy was rolling along. You may not be able to justify new salaries when times are tough, but if you believe in the work you do, you should invest in grabbing genius when it's available, not when it's easy to justify.

We are poised for a tremendous 2010 and beyond because we've added horsepower to our team during the best labor market of the past 30 years. Personally speaking, while I think we did many things right in 2009, I think our results are as much blessing as victory. We've had our most profitable year ever. But the real dividends are far deeper than the P&L. Our team is grateful to have been able to do the work we love, even during a difficult time. We've grown closer as an organization. We've gotten clearer about what we do and why we do it. And we've learned that no matter what the world is doing to you, there is always an opportunity to exert an influence for good.

Joseph Grenny is the co-author of three immediate New York Times bestsellers: Influencer, Crucial Conversations, and Crucial Confrontations. He is cofounder of VitalSmarts, an innovator in corporate training and organizational performance, and a consultant to the Fortune 500. Learn more about the Influential Leader at www.vitalsmarts.com/influentialleader.