Leading Through Market Volatility (Again)

As recession panic takes hold, CEOs need to stay the course, control what they can and keep employees focused on customers.

Starting to drive you crazy again? Welcome back the side topic in lobbies, lunchrooms, telephone calls and even meetings: “What’s the market doing today?” Now it’s the global threat of the coronavirus, early last year and continuing it has been the threat of trade wars.  Give it a few months and recession indicators will have their day. And lest we forget, political conventions and polls just might move the market needle too!

In 2007-2008, the skies grew darker and darker and then…the elevator cable snapped. No doubt, the market’s current volatility rekindles some of those memories. Most of us have no control over the equity markets and yet, the markets seem to have control over some of us—it’s hard to ignore the caution signs. Volatility is the new normal and preparing for it is not an option…it’s a must.

We all learned from the hard lessons of 2007/8 and figuring out how to adjust is not as much a challenge as when to do it. Refresh your contingency plans. If your enterprise has excess cash invested in equities, make sure you can still meet your cash needs while we all ride the roller coaster. Consider trimming your inventories, both your own and that held for customers; order less but more often, reconfirm expansion plans and exceed your customers’ expectations. Retaining them is more important than ever; a slowing economy is not exactly the ideal time to find new ones. Be ready to cut the frills, they can always be added back on a moment’s notice and most of all, get everyone on board.

The message is simple: we’ve been there before, we know what to do and we’re going to stay ahead of the curve.

Let’s not forget the personal side. Folks will once again begin checking their investment accounts more often; they will have a need to talk about the market with anyone willing to engage and yet seldom find peace of mind in those conversations. They will be distracted, and your opinion won’t matter—but your counsel will. Tell them that none of us can influence the market, but all of us can influence our continued success. “We’ve got a job to do here and we need to stay focused—let’s be ready if we have to tough this one out.”

Keep your sanity and help others do the same. Focus on the things you can control, put to work the lessons you learned 10-plus years ago and stay the course. It certainly looks like once again, it will be a while before we find calmer waters.

Fred Engelfried
Fred Engelfried is Director/Chair of North Coast Holdings, Inc. and its subsidiary Lewis Tree Service, Inc. He has been a member of the board of directors of Lewis for over 20 years, and for 10 years prior to that worked with the company intermittently in various consulting capacities. He also is President of Market Sense Inc., a participative management firm that has served more than 100 regional clients over 35 years.