Working With Constant Change

For businesses struggling to adapt, consistent values and long-term objectives are more important than ever.

Dramatic market volatility, fuelled by the European debt crisis and the first-ever downgrade of the U.S. government’s credit rating, is creating a harsh testing ground for organizations and individuals around the world. How to survive and thrive in such challenging circumstances is neither obvious nor easy.

For years, in my work in the corporate world, I’ve heard the slogan “Change is the only constant,” but it has always seemed hollow to me. Instead of developing a workforce and leaders who were nimble and capable of constantly adapting, many organizations in the business world were, in fact, having a very difficult time adjusting to change. Sudden changes in their operating environment would cause them to hit the panic button, laying off employees; slashing development, improvement, and quality programs; cutting off contracts with suppliers; and retreating into rapid downsizing. My partner and I noticed this in our own business in the recession of the early 1990s, when some clients were quick to step down from their commitments to us as they reacted with fear to the downturn.

Even though companies and organizations say they will make their cuts strategically, this is most often not what happens. Instead, the cuts often turn out to be "across the board" and irrational, damaging the organization's short-term and future interests, while preserving the deadwood and the obsolete. The best and the brightest are often the ones who "take the package" and move on.

In the face of an economic crisis, companies that show more concern for their employees consistently pull ahead. Want proof? Click here.

Needless to say, this plays havoc with organizations. I’ve seen it happen many times: Employees quickly become fearful and cynical; they stop seeing themselves as having a long-term future within the organization. Their loyalty to the company, and sometimes to each other, declines dramatically. It's "every man for himself" (or woman). The loss is more than financial. The biggest cost is to the spirit of the organization: demoralization; lost confidence, morale, and investment; and a decline in people's commitment to the company.

In one organization I know, the CEO reacted immediately to the 2008 downturn, pulling the trigger on across-the-board cuts without consultation. In doing so, he destroyed a brilliantly successful change initiative that was under way, which had already made a dramatic improvement in the company’s bottom line. Needless to say, when the market began to recover, he lost a significant number of his best people, who had just been waiting for a chance to jump ship.

In such circumstances, customers often feel compromised, too, as product supply times and quality of service suffer from the upheaval. Sales often drop, and branding and reputation are damaged. Some organizations never recover from a knee-jerk or premature reaction to a new environment.

The upheaval that we have been seeing since 2008 is of a different nature ‐ more threatening and profound, in many ways, than recessions of recent decades. And yet, in many cases, I see reactions that are somewhat more nuanced, sophisticated, and less risk-averse. Rather than panicking, many clients are using our management and leadership consultation services to help them navigate, adapt, and succeed in today's volatile world.