Seven tips on how to be a successful and empathetic leader in an economy

July’s buoyant jobs report, coupled with easing inflationary pressures, was welcomed by US market analysts as it cast a question mark over the inevitability of a full-blown recession. However, the most constant thing about the economy so far in 2022 has been uncertainty. I think the continual economic ups and downs make it clear that company leaders need to plan for downturns, booms, and everything in between, no matter what happens next.

I’m here to tell you that companies can achieve growth in any economic climate, even in a recession. I’ve been through a few downturns in my career, starting with the tough job market in 1994 right after I graduated from MIT.

Since then, I’ve managed a startup through the dot-com bubble that burst in 2000. Soon after, I founded BigMachines and, with the help of my team, guided our software company through the 2008-09 recession, doubling revenue annually until Oracle acquired us in 2011. In better economies over the past decade, I founded two companies: configuration and pricing software provider SteelBrick in 2014 before being acquired by Salesforce in 2015; and G2, a software marketplace that I continue to run to this day.

I know I haven’t seen everything, but I’ve seen a lot. For example, there are moments that the founders call “WFIO”, inspired by entrepreneur, investor and author Ben Horowitz, when a very disappointing result occurs and the company seems to be on the verge of failure. It happens to almost every startup, but it’s not necessarily the end of it.

Quite the contrary. I think it’s part of the process, part of the ups and downs along the way of building a company. These real-life leadership moments taught me that executives can build their companies with empathy in the toughest of times if they have a strategic framework.

HOW TO ADAPT AND GROW

During uncertain times, one question that can keep CEOs and entrepreneurs awake is: How do you stay resilient and still find ways to grow? With that in mind, here are seven leadership tips I’ve developed that can help fellow business founders stay focused on what’s important—their company and their people—during any challenge that comes their way:

1. BE HONEST

The first step is to acknowledge fear and uncertainty in clear terms for your entire company. Openly communicate this new reality, develop a plan with your leadership team, and convey any changes to your staff as soon as possible. Beyond sharing what you know, also be honest about what you don’t know and what is still being learned.

2. BE PROACTIVE

This is a time to be nimble, so your next steps can’t wait another week, let alone another day. Immediately adjust your hiring plans and marketing budgets and align emerging scenarios with your leadership team and company board of directors. It’s best to over-communicate during this time, as things can change quickly. For example, consider adjusting board meetings from quarterly to monthly to support agile planning, check progress, and determine other potential changes.

3. Lean on efficiency

In my experience, customers want and appreciate a faster return on investment, so they look to innovation and automation to meet and even exceed their expectations. This is true in any climate, but especially in the midst of economic uncertainty. Determine what is working well and double down on those areas to create value. At the same time, ask your teams to ask themselves, “Is it working and adding value?” For example, if there is a report that has been collected weekly but is not being used, consider pausing that activity to refocus on other, more strategic priorities.

4. INVEST IN AVAILABLE TALENT

Efficiency also means being smart with your staff, so employ remote and global talent and continue to develop promising staff for the long term. You can bring great people on board during a downturn as well as help your existing team sharpen their skills and grow their careers.

5. LIVE YOUR VALUES

As obvious as it sounds, don’t panic. Your long-term vision should always be your focus, and executing the plan should include living by your values. I think that always means being kind, especially in difficult times. If layoffs are necessary, be sure to support your former employees in any way you can and help them find new roles.

6. “ESCAPE FORWARD”

I was born in Germany and lived there as a child before coming to the US There is a German saying: “Flucht nach vorn” which means escape forward. This saying is apt for whatever economic climate your startup finds itself in, and here’s what it means to company leaders: always seize new opportunities to show forward action. If you find yourself in a recession, use it as an opportunity to sell and trade, even when others in your industry may be scared. This not only supports growth, but also signals to your team that there is a better future beyond the recession.

7. MEET WITH CLIENTS

The latter is related to “Flucht nach vorn”, but deserves its own call: Meet the customers, who are, of course, the soul of your company. You need to make sure they can adopt your solutions quickly and efficiently to generate the ROI they want. I’ve been traveling as much as possible these past few months, meeting face-to-face with clients from around the world, listening to their concerns and determining how we can best support their goals and growth.

PERSEVERANCE IS KEY

These seven tips can help business leaders maintain a calm resolve that will help the entire company persevere through any type of economic turmoil. These next few months could be your “WFIO” moment, and it’s up to you to be direct, proactive, nimble, efficient, talent-savvy, values-driven, forward-thinking and customer-minded.

But above all, it combines toughness and empathy. As someone who’s been through a few economic downturns, I can tell you that he’ll probably be proud that he didn’t quit. If you show the strength to suffer, push through, and ultimately succeed, it’s a journey you and your team can look back on fondly and never forget.


Godard Abel is co-founder and CEO of G2, a software review platform. Previously, he was the founder/CEO of BigMachines and CEO of SteelBrick.

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