Surviving the recession...

 By Claudie Plen and Gavin Andrews, Edge Thinking Ltd.

The Chinese word for "Crisis" consists of two characters, "danger" and "opportunity". That we are currently in the grip of an economic crisis is beyond doubt, but for the creative sector in particular that crisis represents not only significant dangers but also multiple opportunities for growth and development.

To take advantage of these opportunities whilst navigating past the dangers we need to be realistic about the scale of the crisis, and flexible, visionary, creative and strategic in our approach to it.

Reality check – the dangers

Every day now the media is bombarding us with doom, gloom and fear. It's easy to be overwhelmed by panic as you wade through endless reports of job losses and business closures, stock market crashes and house price collapses, but how bad is the situation for the creative sector?

Unemployment:

• The current worst case scenario is that by the end of 2010 there may be an extra 1.4 million unemployed. That means that if you are in a job now, your chances of losing your job by the end of 2010 are 6%.
• Of course that means that there is a 94% chance that you won't become unemployed. Not bad odds at all, although this is an average and doesn't take account of variation between sectors.
• If you are one of the unlucky 6% then, while you might find it difficult to find a similar role in the short term as there are currently 600,000 vacancies which need filling. There's a good chance that you won't have to sign on if you don't want to.

The economy:

The latest IMF figures indicate that the UK's economy will contract by 2.8%. This is obviously a bad thing, but, it does mean that 97.2% of the economy will remain intact. How desperate is a 2.8% contraction in real terms?

The creative and cultural sector:

• 545,000 people work in the UK's creative and cultural sector. Just under half are self employed and the majority of these have relatively limited costs. In simple terms, this means that they are able to survive on less. You probably won't be making record profits, but chances are you will be making some profit. 
• In the mid-long term the sector is growing. It is expected that an extra 49,000 workers will be required by 2014 and that creative sector outputs will be growing by 4% per year by 2013.
• Preparation for and delivery of the 2012 Cultural Olympiad will offer a boost to the sector.

Your business:

• 53% of creative sector outputs arise from the Business and Finance sectors. Most of these clients are serviced by medium to large businesses. If the majority of your clients are in these sectors, then it is likely that you will be hit hardest. If they aren't, then it's much less likely that you will lose significant enough levels of business to lose your job or for your business to go under.
• Between 2001-2004 (which included the period of the dotcom crash) 10% of all creative sector jobs were lost. During this period there was a significant oversupply of workers. Currently there is not, hence the need for 49,000 more workers by 2014. By understanding the real dangers posed by recession, we are in a better position to manage the risks and maintain a level of stability in the face of uncertainty. But what are the opportunities for growth, and how do we take full advantage of them?

Spotting opportunities

Each organisation is different and the opportunities available to you for growth will in part depend on your organisational vision, values and goals. Success in a recession depends on maintaining a high degree of flexibility and creativity when looking for solutions to problems, both for you and your clients' clients. Many creative agencies for example are taking the opportunity to explore a 'solution neutral' approach to providing value to their clients. It's not a new idea but current circumstances have conspired to make it far more attractive as a means of increasing flexibility. By moving away from the model where the agency specialises in offering a single solution (e.g. TV advertising, web-marketing, posters and billboards...), they remain flexible in their approach and provide the creative solution most appropriate for the client's needs.

But how is it possible to maintain this level of flexibility without enormous staffing levels and unrealistic budgets? Many creative businesses are exploring the benefits of working in partnership to fill gaps in their ability to provide multiple solutions to clients and also (for the smaller agencies) to be able to pitch for larger pieces of business which would otherwise be beyond their reach. The rise of digital technologies in recent years has led to a proliferation of 'virtual agencies' where a central hub or project manager connects to a network of freelancers, providing the ultimate in 'solution neutral' flexibility. People work from home, the business loses the expenses related to having a 'actual' office, without compromising on quality and speed of delivery. In order to find these partnerships or to build up a network of trusted freelancers, consistent networking and relationship building is essential.

Many people see networking as a way of bringing in new business but it is equally important as a way of identifying extra resources, potential partners and referral givers. Developing relationships with other creative businesses who share your client base but provide different services will immediately create a new stream of referrals, if you nurture those relationships and ensure benefits are reciprocal. When in crisis many businesses make the mistake of focussing entirely on new business initiatives when investing in existing client relationships can provide the quickest, most sustainable wins. Helping your clients to navigate through the recession by providing them with different cost effective solutions can be a massive boost to your own stability. Your existing clients already know and trust you so are far more likely to buy.

It's also worth encouraging your staff's entrepreneurial abilities, so everyone is looks out for opportunities and is rewarded for creating new business opportunities and producing ideas. In order to do this, maintaining staff productivity/engagement through coaching and training is essential. Well trained, highly skilled staff will ensure that your business is going to be able to take advantage of the needs of a changing market whilst thinking on its feet.

Managing yourself to make the most of the opportunities

To motivate others effectively you need to maintain high energy levels. Leading by example is the only way to create real momentum, and to do that consistently means you have to start by managing yourself.

Stress management

Stress is extremely damaging to our bodies. We have not evolved to cope with the type of sustained stress which many of us experience. Physiologically and psychologically we have evolved over hundreds of thousands of years to cope with short, infrequent bursts of high stress which require a "fight or flight" reaction.

How to prevent the damage caused by stress

It's important to manage your stress levels. The following may seem obvious but will help.

• Eat and sleep well
• Make time for exercise
• Meditate
• Actively manage your state/notice your breathing and where you hold tension in your body, and remember to consciously release it

Make space for your creativity

If creativity is your business you need to make time for the ideas to flourish. In 'Creativity: Flow and the Psychology of Discovery and Invention" Mihaly Csikszentmihalyi talks about the period of incubation being perhaps the most important and essential aspect of creative process. Out of the stillness of this 'mysterious time' flow the connections and relationships which when fused, will lead suddenly to a eureka moment, clarity as if out of nothing, when least expected. Effectively this means that what we perceive as being the work of creativity, the brainstorming, research and experimentation which occur as we explore or invent the problem in hand is merely the start of the process at a conscious level, whilst the real magic happens as the problem goes underground, into our subconscious.

Taking time out for creativity is essential if you want to maintain your cutting edge, and simultaneously will help to manage your stress levels effectively. If we trust that the creative process can never be entirely controlled or contained by deliberate focus we open up new worlds and possibilities of discovery where we allow our conscious and unconscious minds to collaborate. It doesn't need to be hours out of the office, a quick walk in the park can have a dramatic effect if it gives you the space to think.

Recession-proofing your people

Your mood is commercially significant - it will affect your bottom line. People who sustain positive moods are more successful and influential than people who sustain negative moods. This is because our moods are directly linked to our performance. If we are positive we are able to dedicate our brains to effective cognitive processing. We can be creative and decisive, work effectively with others, negotiate successfully, resolve conflicts and, most importantly we can lead. However, when we are in a negative mood our cognitive abilities are dedicated to our mood. Neuroscience has proven that when we are in a "bad mood" our brains literally shut down in certain areas - this is why we find it difficult to perform. Importantly, our moods are highly contagious - especially if you're an influential person. This is great when we are positive, but if you "show up" in a bad mood then it won't be long before your team catches it... and performance (including revenues and creativity) will suffer.

Given that being in a positive mood is so important for our performance (and profits), it makes sense to take action to create and sustain positivity within yourself and amongst your team. It's easy to fall into a negative mindset and to believe that the best way to survive is the "bunker mentality" - cut costs and keep your head down, but a positive mood will enable you and your team to manage dangers and spot opportunities effectively. It is said that more millionaires are made during recessionary periods than when the economy is buoyant. So how do you create and sustain a positive mood?

Notice your thoughts: Psychological studies show that most people spend 80% of their time focusing on what they don't want. This is a habit formed over years and, as with any habit, with self discipline and practice it can be overcome by forcing yourself to be positive. To start with just say the opposite to your negative thoughts (e.g. turn "I can't" into "I can"). Then, as you get better, begin to positively re-frame situations; that is, actively search for the silver-lining. It's not easy but every outcome presents both costs and benefits.

Focus on what you do want: Set goals: Setting clear, specific goals for yourself and your staff creates momentum and is a great way to ensure that everyone is pulling in the same direction.

Always ensure that goals are realistic, inspiring and committed to, as an impossible or constantly shifting goal can be incredibly de-motivating. Don't move the goal posts if you want your staff to score!

Manage the dangers, lead towards the opportunities

Effective recession proofing hinges on being able to manage the dangers and lead towards the opportunities. In simple terms managing and leading differ in the following ways.

• Managing is administrative, leading is interpersonal.
• Managers plan, organise, direct. Leaders inspire, motivate, influence.
• Management produces and sustains order. Leadership produces change and adapts to new conditions. 
• "Managers do things right. Leaders do the right thing." (Warren Bennis).

It's impossible to clearly separate the roles. Indeed, both are essential, whatever your job title may be. Managers must lead. Leaders must also manage.

 

Most businesses are not as good at leadership as they are at management. It's harder to teach (and to learn), but it's a critical role. When times are good and there's plenty of business around we can get by nicely with managing alone. Right now, however, times are not good, and they're getting worse. Visionary leadership is especially vital in our current situation. Without it businesses are unlikely to survive - and they certainly won't be able to spot and seize the opportunities that come with any crisis. Only leadership can provide the vision and inspiration for the way ahead. It's important therefore to be able to "flex" between the managing and leading. The table below lists some of the management and leadership roles and behaviours which we must be able to flex between.

 

Motivating your people

In their book "Motivation Management", Richie and Martin argue that "the task of the manager is to find out what motivates people... to make them smile more and carp less." To help managers to identify what motivates people, they developed a list of 12 "motivational drivers" and then questioned 1,355 professionals to determine the relative strength of each driver. Their findings were very interesting.

 

Money and tangible rewards came 9th in the list. For most people rewards like interest in their job, sense of achievement, recognition and personal growth were much more motivating. This is important in a recession.

While losing money is likely to demotivate, gaining it will not be particularly motivating. As managers we can motivate our people by sustaining and increasing the rewards they value most. The great news is that most of these cost nothing and can be relatively easy to implement by adapting people's roles and delegating tasks. What we must do is seek to understand each individual, discover their motivational drivers and then find ways to use the individual's preferred motivators to help them seek and find reward in their work - even when their take home pay has dropped.

Don't underestimate the value of supporting and developing your staff as a means of boosting performance and productivity. Research by the UK Commission for Employment and Skills in 2007 confirmed that "firms that don't train are 2.5 times more likely to fail than those that do". Ensuring that people are up to the job and feel confident in their abilities pays dividends, and although ROI can be difficult to quantify the results of training and coaching interventions on staff are often dramatic. A challenge for creative organisations where people are often promoted into management positions on the strength of their creative work rather than an ability to manage people is ensuring that your managers have the support and training to manage, lead and ideally coach their teams effectively.

Performance levels dip significantly when people are badly managed and de- motivated by a lack of strong leadership. You need to be clear on the aspects of your business and financial situation you have control over and the ones you don't. Raise productivity, engagement and performance levels, manage your own stress and above all keep communicating, with suppliers, clients, staff and your wider network. Celebrate wins, and learn from mistakes. Be clear on your vision, the values you hold and how they translate into practical everyday behaviours, and the environment you create for yourself and your staff. Be flexible, open to new opportunities and above all use your creativity to grow your business, solve problems and access new markets, it's the greatest capital you have.

Resources for training:

www.edgethinking.co.uk

www.ccskills.org.uk

http://www.skillset.org/companies/traintogain/

http://www.ukces.org.uk/

http://www.bl.uk/bipc/

Edge Thinking Ltd. Edge Thinking Ltd are a consultancy specialising in change management, coaching and training for creative organisations. If you want to know more about how to become a more effective manager and leader, team or organisation please email Claudie Plen at claudie@edgethinking.co.uk.