Over 70% of senior management admit UK bosses have little or no experience of how to deal with a downturn.
This is according to a new survey by Pentacle, the virtual business school, which finds that over two-thirds of executives believe the UK is now heading into a recession or serious downturn.
Worryingly, the research suggests that those at the top have little experience of dealing with a recession.
Professor Eddie Obeng, director of Pentacle, said: “For the Googles of this world, the closest they have been to a recession is post 9/11 – a much more contained economic crisis than the global tightening we are now witnessing. The question is whether these same bold leaders have the expertise to adapt to much more challenging conditions.”
In further bad news, 71% admit that as soon as the downturn hits the bottom line there will be a knee jerk reaction of ‘panic firing’ from the top, and with 95% saying that reviewing headcount will be a prime focus, this looks likely.
A further 83% of executives argue that senior management should invest in strong internal communications in a downturn, yet only one in five believe that they will actually do so. Similarly 56% believe that businesses should actively remunerate key staff, but only 26% think this will happen.
The majority of executives (81%) blame government for the doom and gloom saying it was running too large a budget deficit at the height of the boom, making it difficult to give the economy fiscal stimulus in hard times. On the upside, 69% believe the Bank of England and government still have the financial and economic ability to alleviate the current turmoil.
Obeng added: “With Northern Rock clocking up a liability equivalent to the cost of four Olympic Games or two Iraq wars, one would hope that business leaders will recognise the need to show a little bit more foresight and control with their own bottom-line. It is encouraging that the financial services have already recognised the risks of the current climate but it is important this attitude spreads to other sectors of the economy. The challenge is to run a much tighter ship now that the party – of explosive global growth – is coming to an end.”
Over 200 business people were quizzed as part of the survey.