Yes, a recession falls under change management. Why? Because a recession means change. Changes in the market. Changes in available resources. And so on. We’ve enjoyed a healthy economy for some time now, but many experts are starting to point to signs of an impending recession. Integrating change management and risk management will be a vital step to surviving this kind of change.
There’s a misconception that core business priorities, shifted by the recession, will bounce back after the recession is over. On the contrary, these priorities typically shift permanently as a result, which means preparing for this kind of change earlier rather than later will give you a sharp competitive edge.
Before a recession, when everything is going up, companies tend to go on autopilot and focus less on how they’re providing their core service or product. But then, when the economy is on the downturn, organizational priorities shift to value and efficiency, and suddenly, businesses have to scramble to refocus their attention on creating business processes that deliver their product or service efficiently and cost-effectively while making difficult personnel, product, policy, process, and service decisions.
Avoiding this scramble requires being proactive – the name of ERM’s game. To get off autopilot and refocus on value and efficiency, organizations need a way to risk assess their offerings and identify which aspects of them provide or hinder value or efficiency before the recession hits.
Cross-functional risk assessments and ERM will help you engage with subject matter experts to identify potential risks of a recession, as well as opportunities to mitigate these risks by refocusing on value and efficiency within key departments, products, and services. Going forward with these opportunities means implementing change within your company, which means you’ll be scrolling back up to scenario one to make sure those changes are managed successfully.