The global economic landscape is everchanging, and commercial institutions must anticipate and be ready to adapt to its demands. Right now, many signs point toward a recession. Inflation has been on a steady rise; large corporations are laying off workers and reducing their expenses.
Small and young businesses are often the hardest hit during a recession, with retail businesses and services-rendering companies being some of the most affected. Sales inevitably decline due to a reduction in demand for goods and services.
Industries also have limited access to credit through banks, lending institutions, and their customers. Banks have less incentive to give credit or loans to establishments because of financial uncertainty. The effects of an economic downturn have severe impacts on the finances, growth, and survivability of commercial institutions.
In response to this, small and large companies react in several ways. Some of the key takeaways of the management decisions for businesses and companies anticipating or reacting to a recession can be summarized in a few sentences:
- Effectively manage all resources.
- Create a lean managerial system.
- Cut down on financial excesses such as capital expenditure, hiring, and research.
- Improve productivity among staff.
- Provide value to clients, customers, and target audience.
- Improve brand retention.
OKRs are a must-have for companies and businesses in a recession
For companies to thrive in difficult situations, they must devise agile recession-proof strategies that prioritize meeting the needs of their clients, customers, and target audience. That is, they must be anticipatory, proactive, and flexible.
A perfect example of this is Intel’s “Operation Crush” in 1979, which edged out Motorola in the “microprocessor wars”. The company developed a revolutionary marketing strategy that garnered great success using the OKR methodology. Intel focused on its end-users while taking a proactive approach to goal setting and management.
One of the core elements of developing and implementing strategies that can help establishments weather economic storms is a robust goal management system. After all, as a business owner, you may set lofty goals for your company but if you don’t have an effective framework to track progress, ensure collaboration across teams, and manage milestones, they are as good as nonexistent- This implies that stakeholders must not be complacent in their operations and must upgrade existing systems to meet up with, and surpass industry trends and meet the unique managerial and economical demands they face.
OKR stands for Objective, Key Results. It is a robust goal-setting and management framework used by large and small businesses/organizations. OKR is a powerful tool that cuts across all spheres and levels of the industry.
At times like this, companies must fully leverage the power of OKR to go above and beyond to surpass its limitations. Both types of methodology should be integrated into the company policies and goal management systems. They are; Aspirational and committed OKRs.
Adopting both halves of the OKR gives companies an edge over those who merely follow the status quo. For instance, although nearly impossible to achieve aspirational goals push staff and foster creativity and outside-the-box strategies required for success in an unforgiving, downturned economic climate.
With committed OKRs, workers will achieve stretch short-term goals following your long-term vision.
Let us look at some of the benefits of adopting OKR.
How OKRs can help in sailing through recession & inflation?
Companies that adopt OKRs are unafraid because they are confident in their ability to keep everyone on track with their vision, flexibility to respond to market perturbations, and relevance for achieving vital goals and objectives.
OKR improves efficiency
Downsizing and reducing expenses are systematic approaches to dealing with financial uncertainty. However, the remaining staff is tasked to perform beyond their base output. As a solution to prioritize productivity across all levels, the OKR methodology is more than capable to bolster productivity.
In the advent of a black swan event, companies using OKRs can quickly adapt and course-correct their operations and strategies. While this may seem like a difficult task, the framework facilitates a more convenient transition due to its short, and long-term effectiveness.
OKRs help manage resources and evaluate performance
OKRs can help a company manage resources and evaluate performance more adequately than conventional methods. As a business owner, you can track how well your departments perform and effectively manage resources for performing teams. This is one of the knock-on effects the methodology has on companies.
OKRs help companies provide value
Companies that provide the most value to their customers and clients are indispensable regardless of the global economic landscape. However, without market research, strategies, and objectives, organizations can’t achieve said goals. Given the benefits listed above establishments can adopt OKRs to outperform their competitors.
OKR creates a change in mindset
OKR does more than provide a robust goal management system. It builds confidence and resilience among the staff, management, and the company- This highlights one of the main strengths of the methodology, that is, impacting a positive mindset among all involved parties.
With this in mind, companies can head into a depression better prepared than others with the right attitude, knowledge, and management systems to back them up.