- Downturns in the economy put all at work on edge, especially frontline employees, who often find themselves navigating stressed and frustrated customers.
- Frontline leaders can have an outsized impact on an organization’s ability to steward employees through tough economic times, given they supervise an estimated 80% of the workforce.
- Research by Harvard Business Publishing has uncovered the top leadership skills frontline leaders most need to navigate economic uncertainty—and the capabilities aren’t just business-centric; they’re human-centric, too.
Downturns in the economy put employees on edge, especially those on the frontline, who often find themselves dealing with frustrated and sometimes rude customers. Add to that changes in company policies and belt-tightening that accompany an economic slowdown, and it’s a recipe for a discouraged and unsettled workforce.
Leading the frontline through an economic downturn presents managers with a challenging set of circumstances. What do they need to be up to the task? Let’s examine what it takes for those in frontline supervisory roles to succeed.
Recessions: Rarity or workplace reality?
As the saying goes, “What goes up must come down”—and as it relates to economic prosperity, this truism eventually plays itself out at everyone’s workplace. At some point in our careers, we all experience a slowdown in the economy. In the United States, recessions occur on average about every six years,[i] so most employees can experience up to two negative business cycles while they are still early in their careers.
Though global recessions are much rarer, there are many experts who believe that as major countries increasingly accumulate economic power, and as our economy grows increasingly global, a recession in one nation can have an outsize impact on the world economy.[ii]
Whether employees have lived through a downturn or not, it’s natural for all to feel a sense of uncertainty. For the youngest of employees, the first time going through a recession as part of the paid labor force can be nerve-wracking because they lack the experience of coming out the other side of the eventual economic upturn. And for employees with families to support, the pressure feels even more intense. Regardless of their life stage, all employees in a downturn will have a host of questions about the viability of their employment—and possibly the ability of their employer to stay in business.
Frontline leadership: A pivotal population during downturns
Since business downturns are an inevitable part of work life, it’s incumbent on leaders to help employees make sense of their reactions to the current business cycle. And because frontline leaders supervise an estimated 80% of the workforce,[iii] they are in an excellent position to provide important context and reassurance to a vast majority of an organization’s workforce.
Furthermore, attitudes about where employees seek out information at work have shifted. Where they once felt that the executive team was the most reliable and trusted source of information, employees now turn to their direct supervisors to understand the organization and its priorities.[iv] This makes frontline leaders a powerful resource for delivering key organizational messages and providing reassurance during difficult times.
The skills frontline leaders need to navigate economic uncertainty
Research by Harvard Business Publishing has uncovered the top leadership skills frontline leaders most need to navigate times of economic uncertainty. Unsurprisingly, the list is comprised of business-centric and human-centric capabilities. A fitting discovery: the two leadership capabilities that rise to the top as being most needed across the organization represent proficiency from each category. This analysis highlights the balancing act all leaders face: organizational success is found in a leader’s ability to attend to both the business and the people side of things.
Specifically, researchers discovered that among top-performing organizations, the capabilities of leading strategically and leading authentically were among the two most emphasized in the organization’s culture.[v] Other findings from the research indicate that additional people-centric capabilities, when done well, such as leading through uncertainty and championing inclusion have positive impacts on employee morale. On the other side, when leaders poorly execute business-focused capabilities like driving digital and data intelligence and understanding the business, the organization’s strategic and financial goals are more likely to be put at risk.
Let’s unpack what this means for frontline leaders tasked with leading the workforce during tough economic conditions.
Frontline leaders as business dot-connectors
One of the most important roles any leader can play is that of “dot-connector” – helping employees make sense of the current business situation in which they find themselves. There are big “dots” such as industry knowledge, market awareness, business strategy, and operations. Smaller dots may include departmental policies and communication norms.
Frontline workers often express their frustration that senior managers are out of touch with the rigors of customer-facing work.[vi] So, when a skilled supervisor can connect these business-related “dots” for their team members in a way that resonates with their daily lives, it reduces employee resentment and increases engagement. This is especially true during difficult economic times when employees may not see the connection between what they’re being asked to do and the overall business strategy.
Navigate economic uncertainty: Leadership skills in practice
For instance, if there is talk of discontinuing a popular (but unprofitable) product, a frontline leader can engage employees through the following:
- First, a manager can start by saying, “I know you’ve heard that we’re discontinuing the XYZ product, and a lot of your customers really like it. Here’s why we as a company are moving away from that product, and here’s how we’re going to streamline our product suite.”
- It’s during these conversations that a manager must acknowledge the reality of the situation. To accomplish this, the supervisor might say: “I know that you gave feedback to senior management on how much customers love the product. Here’s the reality: we’re losing nearly $X a quarter on this product so it’s just not viable anymore.”
- Finally, the frontline leader should connect this decision back to the larger business strategy. They can do this by being transparent and sharing something akin to the following: “Our strategy is to move towards a ‘greener’ product. Once we launch the eco-friendlier product next month, we’ll be better positioned to offer a superior alternative to our customers.”
Encourage open exchange, empathy, and empowerment
During an economic downturn, a manager’s need for finely honed people skills becomes vital. This is where the capability of leading through uncertainty comes into play, especially related to communication. In times of uncertainty, employees tend to fill in information voids with speculation and gossip. Given that some communication experts believe up to 90% of conversations might qualify as gossip,[vii] leaders must keep the line of communications open to quell rumors.
Additionally, leading authentically becomes critical during times of duress. Employees can sniff out insincere pep talks from a mile away.[viii] So, if the news is indeed dire, it’s important for leaders to acknowledge the challenge that lies ahead while still providing hope for a better future.
Navigate economic uncertainty: Leadership skills in practice
For example, a leader might say, “I’m going to tell it to you straight because you deserve to know—we are in for a tough few business quarters. Sales are down 20%, and that’s scary. But I also know what a talented team we have. We’ve been in tough spots before and we’ll get through this one, too. Senior management has a plan to do XYZ. And we on the frontlines need to do our part too. Let’s talk about how we can get this done.”
The leader should then clarify the team’s focus for the near future, and either share a few tasks the employees can immediately focus on or ask the team for their input. By closing the talk with an engaging question, such as, “Does anyone have ideas about how they’d like to approach this project?” or “Can I count on you to lead this?” or “How confident do you feel about our path forward?” the leader is communicating their trust in and respect for their people—all qualities that empower employees to do their best work.
When a leader is vulnerable, acknowledges the reality of the current situation (e.g., “sales are down 20%”), and provides a clear path forward with opportunities for team contributions, they effectively demonstrate the type of authentic leadership needed to steward the front line through tough economic times.
To learn more about the top leadership skills frontline leaders need to not just navigate economic uncertainty, but to thrive in any environment, download our paper, Surviving the Trial by Fire: Five Crucial Capabilities for Today’s Frontline Leaders, and contact us today to discuss how we can help you transform your frontline managers into successful leaders who get the best from their teams.
[v] Harvard Business Publishing Corporate Learning, “Leadership Reframed for the Workplace of the Future: 10 Capabilities and 7 Superpowers,” 2022.