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The first COVID-19. Then come health requirements. The conflict between Russia and Ukraine, constricted supply chains, increased costs, interest rates, and inflation should also be considered. As a recession is predicted to be unavoidable, economists are beginning to agree.
No one has a crystal ball, and the future looks more unpredictable than ever, but if we break these issues down (such as pandemics, conflict, and increasing food and fuel costs causing a recession), we realise that many of us have faced such difficulties in the past. Either we survived and prospered, or we made errors and learned what not to do. For navigating this next period of uncertainty, these thoughts are quite helpful.
One person's perspective on a problem may only be so broad, especially for entrepreneurs. It may be challenging to think creatively when there is limited prior experience to draw from, especially for new leaders. However, that's where a board can come in and help with better-informed decision-making, thanks to the knowledge of its members. To better address problems and seize opportunities, leaders may draw on the wide breadth of knowledge that their board members possess — their "been there, done thats" — to help their organisation navigate through even the most trying circumstances, such as the impending recession.
Utilize your knowledge
With an average of 17 months of contraction followed by 38 months of growth, the United States has seen 32 economic cycles since 1854. Recessions have occurred four times since 1980 during these times of deflation. No two recessions are the same due to the passage of time, but there will probably be some commonalities in the procedures needed to overcome them. Having members of your board who experienced the worst of all of these in 2008 may help you identify circumstances that are comparable and might benefit from similar solutions, as well as instances in which unanticipated developments may need unanticipated action.
In order to get through the next difficult times, CEOs should make the most of all the board members' contributions. After all, a board's responsibility is to steer a firm toward its objectives. A company's prospects of surviving the recession increase with the expertise of its board of directors. With the help of a knowledgeable board, even newly appointed CEOs may prepare for probable traps and steer clear of impending problems. Leaders may make better, more informed choices with a lower chance of failure by incorporating the lessons learnt from prior mistakes and triumphs and then analysing them via the varied viewpoints on your board.
Everyone benefits from transparency in their job.
One of the most important factors in success is open communication between the organisation, its board of directors, and all stakeholders. The epidemic has made openness more important than ever, according to Salesforce President and CFO Amy Weaver. "All of a sudden, you were compelled to make judgments at lightning speed, ones that may actually alter the whole course of your organisation." Weaver thinks that the solution to finding a balance is to communicate more with the board.
No one is aided by false information, particularly those who intended to utilise it to direct a business. If they sense the company's leadership is concealing anything, board members find it difficult to trust them or feel they share their values. Their experience may assist us in converting our thoughts into workable plans of action if we bring all of our ideas to the table in an open and honest manner.
Develop and implement a clear vision.
A long-term development strategy for your business may serve as your compass during unpredictable times by keeping it going in the correct way. According to a recent FMI research of 150 firms, executives who took snap judgments that were at odds with their organisations' long-term goals suffered negative short- and long-term effects. Some people have discovered the advantages of relying more on their board to question choices by drawing on the knowledge and perspectives of their board members. When the waves are threatening to sweep everyone under, a clear vision acts as a "lighthouse in a storm," keeping everyone in the group focused on reaching the land.
Everyone engaged is more prepared to succeed if you establish clear objectives and order the construction of a board according to the height of those goals. Make a vision immediately if your business doesn't already have one. If you already have a vision, it can be a good idea to review it to make sure it jives with your goal and key principles. Your board members may provide you guidance on how to maintain that path after everyone has come together around a clear vision that outlines the issues a firm address, how it addresses those issues, where it wants to go, and what that will look like.
Spend your money more wisely.
A board of directors may assist in analysing the vision to make sure that investments made by the firm are working toward that goal. Investments are necessary for a company to grow. When Universal Investments CEO Mary Cantrell asked the board of directors to determine whether to restrict or shut a diamond-mining investment fund, the board ultimately decided to increase the fund's charter, which beat the majority of benchmark indices. A better corporate choice was made as a consequence of the board members' analysis and insight than the management would have been able to come to on its own given its knowledge and expertise.
Boards can provide greater guidance on saving, budgeting, and planning to successfully navigate challenging economic times and thrive. Let them see your finances and where the business is so they can know where you are financially and where the firm is headed. When financial pressure increases, take the advise of the board to make more deliberate recruiting and firing choices rather than hurriedly laying off employees. Reconsider long-standing connections with suppliers using the knowledge of the board. Your board can aid you in brainstorming fresh methods to go on cooperating in ways that still benefit everyone in the face of difficulties.
Even if there may be a recession on the horizon, the good news is that we have already survived one. A beginning and an end may be spoken about difficult times. When everything is said and done, your company can succeed if you have a board ready to lead you and its wealth of expertise and knowledge through the obstacles ahead.