Management Development: challenges during an economic upswing
The business cycle brings with it a variety of trials that successful organisations must be prepared to surmount. It is common to think of such trials as happening only during economic downturns, but the truth is that even upswings in the economic cycle can bring particular challenges, especially where management development is concerned. Organisations that excel at promoting management skills and talent during an upswing are the ones that will be best positioned to take advantage of the new opportunities that economic recovery brings.
The Personnel Challenge
During a downturn a typical business will shed jobs, significantly reducing its workforce. The beginning of a recovery will often cue a need for additional personnel, particularly since workers who stayed through the downturn may now see opportunities elsewhere that they would like to pursue. The turnover that results poses challenges all its own when it comes to management development.
Supporting strong management development during this phase of the business cycle will require a number of different efforts. One will be to improve applicant screening and interviewing procedures. This is particularly important because during an upswing a business may receive many more résumés for each position than is typical. Being able to develop strong management means, first and foremost, finding the right people to flesh out a team. Management development must begin at the beginning – with the selection of highly motivated and talented individuals who can demonstrate a strong flair for innovation.
With a number of new faces on board, the organisation will now face increased challenges in the area of team building. Many employees may have lost the individuals with whom they were most comfortable. This by itself would pose a challenge, but the situation may be exacerbated by newcomers who do not initially ‘fit into’ the organisation seamlessly.
Management development at this juncture must explicitly respond to the need to encourage cooperative attitudes so that new teams can begin to function at their peak levels. One common strategy in this situation is to have staff engage in a series of team building exercises. These are sometimes ridiculed as “boring” or “a waste of time” by the very staff they are meant to assist; attitudes which of course can make it more difficult for trainers to persist.
One way out of this dilemma is to make special efforts to ensure that team-building exercises are relevant to the workflow employees must complete. Teaching executives to brainstorm together can be done by asking them to produce a Mind Map answering the question “Why do people like cats?” but the team building exercise can just as easily be focused on a topic that better suits the business context of the organisation. “Reasons why product X was a success” or “Customer perceptions of failed product Y” are far more likely to be perceived by the staff involved as useful, interesting exercises.
Management development, however, can be quickly derailed if trained and capable personnel leave the organisation once the economy is in full swing again. Planning ahead can help to avert this situation, though of course no business can hope to fully retain all the staff it would prefer to keep to itself.
Businesses should create and regularly update a retention strategy that will give employees reasons to stay in the organisation. Financial incentives usually play a large role in such strategies, but salary and bonuses – both forms of direct pay – are not the only options companies can exercise. Retention strategies can also include more innovative elements, such as the opportunity to earn additional vacation days as length of service increases or the inclusion of a more generous life insurance policy for employees who have stayed with the business for a designated length of time.
One of the most important management development initiatives a company can undertake during an upswing is a concerted effort to revise the expectations of high-level personnel. If a downturn has been protracted, executives may have adjusted to a “new normal” that includes decreased expectations in terms of profitability and sales. The onset of an upswing will cause some management personnel to automatically raise their sights, but this tendency is far from universal.
The company should set new strategic goals that are in keeping with the economic recovery, then clearly communicate those goals to management personnel. However, this is only the start; managers and supervisors may also need additional training and resources to enable them to meet the goals that have been set for their divisions. It is important, however, to make it clear that now that the economy is in an upswing, the company will be expecting improved results – possibly across the board.
Developing management talents during an upswing is essential because it will set the organisation up to run at full throttle in the good days to come.