Being a leader can force you to deal with a lot of difficult situations. Still, when you’re a leader in an organization facing times of economic hardship, those challenges seem to multiply. Right now, many companies are facing drastic changes and cuts due to a halted U.S. economy. Those in leadership are tasked with making tough decisions in a situation that seems well out of their control. No matter what challenges leaders are faced with, there are leadership principles that hold true. To steer their ships safely through the storm, here are a few things leaders must do.

Be Candid with Employees

Leaders will need to be transparent about the challenge the organization is facing. Being honest about the situation with employees can help to ease their fears and anxieties. If leadership is not open, it can lead to panic among employees. Panic will negatively affect morale and may cause employees to begin looking elsewhere for employment. Losing all of your talent will only worsen the overall organizational outlook. According to Jacobson Online, “Discussing your organization’s current state with employees at all levels, not just senior management, is imperative. A candid approach to what is going on in the industry, as well as where your company stands, can provide an increased sense of security and an overall boost to morale.”

Be Smart about Cutting Costs & Be Proactive

Rather than rushing to cut costs haphazardly, remain focused on your company’s mission. What expenses can be reduced or eliminated that won’t hurt your business long-term? Look at what expenses directly contribute to the business and reduce or eliminate those first. Make intelligent cuts that won’t end up impeding revenue generation in the long run just to save money. 

Also, along with cutting costs, be proactive. By regularly reviewing your operating procedures and streamlining your processes before a crisis arises, you’ll not only be ensuring the longevity of your business but also adding value for your customers. Taking action while others maintain a “wait and see” attitude can help you to stand out from the competition. Taking the time to reach out to key customers and staying in the forefront will allow you to remain close to those customers and strengthen those relationships. You might not be able to win many new clients during a financial downturn, but by investing in your customer service, you’ll have a better chance of keeping those that you do have.

Engage Your Employees

Along with being honest with employees, you must include them in making decisions and allow them to contribute to cost-cutting efforts. By engaging employees in proactive measures, leaders can keep morale high and give employees a greater sense of purpose. 

Double Down on Company Mission and Values

While leaders certainly need to be cognizant of the economic situation, it’s best not to let that be your sole focus. Emphasizing the company’s mission and values and demonstrating them on a personal level can help to inspire others to do the same. This continued focus on mission indicates to employees that company leadership isn’t so consumed by dealing with the economic instability that they’ve forgotten what they’re fighting to save.