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Updated 18 February 2013

The psychology of the recession

Despite the pressures, financial and otherwise, that many companies had to endure during the recession, it also had the effect of catalysing a number of good behavioural spin-offs.

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Despite the pressures, financial and otherwise, that many companies had to endure during the recession, it also had the effect of catalysing a number of positive behavioural spin-offs. Behaviours and attitudes that very often only surface during tough times despite the obvious benefit they bring about.

“When faced with adversity or an unexpected challenge, many companies are forced to stop and take stock,” says Natalie Davies, Head of Interim Management at Cycan, a leading transition and acceleration enterprise. “This is exactly what we saw happening in our dealings with many local companies. Declining profits, a constrained operating environment and staff restructuring wrought by the recession, forced openness to alternative ways of doing things.

Davies says that during the recession, there was a marked surge of interest and uptake of interim management. “Companies, who could not afford this calibre of management indefinitely, at least accepted that they needed this expertise in an immediate and short term capacity.

Business environments and benefits

It essentially brought about a business environment where organisations were open to the multiple benefits of interim management, and boards and strategic thinkers were open to tapping into the expert skill sets of interim management practitioners.”

Besides taking time to take stock, in came the necessity for optimal performance, an imperative in a recession where many companies were fighting for market share while having to do more with less. “In this operating environment, companies, if they were in a position fortunate enough to be able to hire new staff, had to make each hire count.

This meant that candidates were required to fulfill broader psychological objectives of being the right ‘fit’ for a company, as well as being able to grow the company and grow within it. In this context, the appointment of new staff particularly at executive level becomes a long term strategic move,” comments Davies.

Davies says that this necessitates the inclusion of additional factors not reflected in a clinical, linear hiring process, such as: personality and; capacities not reflected on a CV, like decision making capacity. It also suggests that appointments not be relegated to HR alone. In turn, it requires companies to facilitate and commit to the personal development of their staff.

“Ultimately the world of people is sorely misunderstood and rather than a less clinical approach when hiring, a more complex and psychologically nuanced approach should be adopted,” she concludes.

(Press release, September 2012)

 
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