No one can predict when or how the economic environment will emerge from recession, but one thing is certain: the conditions of the previous decade are history and to persevere with strategies devised on the presumption of an early return to prosperity would be delusional.

Too many executives began 2008 denying their company's vulnerability and, having spent the summer first concealing and then trying to contain nascent problems, they now have to moderate their ambition and focus on survival and the condition in which they will emerge from this pernicious phase.

The board agenda must turn to the question; what is to be done and by whom? Few executives have experience of running a company when the economy is contracting, when banks are reluctant to lend and established management methods, which rely on economic stability, are no longer dependable. This is a bad time to begin at the bottom of a learning curve.

Transitional times require transitional leaders. Turnaround specialists who were active in the 1990s may offer insights into the techniques that helped companies through the last recession but which have been forgotten in the intervening 17 years. Leading a business through turbulent times requires something other than the more stringent application of the scientific management techniques of control and analysis. Some, such as budgeting, working capital management and cost control, remain important, but, in isolation, they are insufficient.

Also perilous is the natural tendency to take the risk out of companies by re-establishing a previously successful business model. “Let's get back to basics,” will be heard in too many boardrooms. This is like driving the car forward on an unfamiliar road while focussing on the rear view mirror.

A company may have a dozen important issues, each demanding resources and attention, but experience of leading in unstable times teaches that only three or four are vital. Failure to manage these successfully renders the others irrelevant. Get them right and the others will seem less difficult.

Turbulent times require counter-intuitive processes. Managers address instability instinctively by imposing more and tougher controls, which is like increasing the scaffolding around an unsteady building to make it robust. Leaders recognise that businesses need the flexibility to adapt.

This is not to imply that we must abandon reason and implant a culture based on unrestrained intuition, but, more subtly, that we must recognise that we are walking through a minefield in the dark with a map of a different place. Leadership in these conditions is about the orchestration of unplanned change and the mantra must be: “Imagination, flexibility and adaptation.”

Unshakeable commitment to a single plan can be fatal. Only those able to lead with ingenuity, able to formulate creative options and to act with the confidence to abandon previously favoured plans and projects will see their company emerge with the strength to prosper.

— Anthony Holmes is a corporate turnaround specialist whose book Managing Through Turbulent Times is published in March next year.

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