In this article, Kate Hesk, CPO and co-founder at HRtech startup, Cognomie, shares how you can help your people, businesses, and customers emerge stronger.
For leaders in the healthtech industry, even pre-Covid, ours was a story of growth.
With the pandemic accelerating the digital health market boom, we’ve seen the market sky-rocket from an estimated value of $152bn in 2020 to $456bn by 2026.
As a relatively young sector, it’s no surprise that many founders are facing their first downturn.
As we head into what is set to be the most challenging business climate in over a decade, how can leaders prepare for this difficult environment?
Prioritise a healthy runway
We’ve just come through a boom period of high valuations, questionable early-stage investments, and a race to back the next unicorn.
But as times get harder, investors want to see the numbers, and a proven business model.
Smart founders will focus on investing in efficient growth and resource to extend their runway, regardless of the wider economic environment.
This built-in resilience – with a full picture of cash-flow runway, options for increasing runway, and the cost of increasing your runway – are essential to navigating trickier tides.
There’s also the tendency to take a zero-based thinking approach when it comes to spend. From people to marketing spend, we rush to make fast fixes.
Remember, economic uncertainty also brings opportunities for significant growth, but you’ll need to be well positioned to achieve that.
What are the investments you need to deliver on your mission? And when it comes to building cash reserves, how can you ensure you protect your core priorities and deliver exceptional value to your customers?
That’s where you spend.
Develop your talent
In downturns like this, startups are quick to cut costs by cutting headcount. Just this week, we’ve seen companies from Twitter to Stripe slash staff numbers as fast as their forecasts.
In the age of the Great Resignation and quiet quitting, an engaged team, brought into your vision, is essential to long-term success.
And you can’t do this if teams are overworked, stressed, and concerned about their own job security.
This is particularly pertinent in healthtech, when teams have come through nearly three years of high-velocity growth and the pressures that come with that.
Now’s the time for compassionate leadership. To double down on supporting your team and foster personal and professional growth at an individual and company level.
We know that drops in valuation can impact motivation and confidence – keep a closer eye than ever on your people’s mental health and wellbeing.
You can do this by encouraging face to face contact, take time to connect in person, and offer self-directed support through personalised coaching. We’re seeing more start-ups build in wellbeing days which suggests a positive shift in culture.
Downturns are paradoxically an ideal environment to ramp up skills.
Where you can, support investment in skills development and self-agency across your team – peer support groups, coaching, and mentoring are affordable ways to support your team.
Think about how you’re investing your L&D budgets – coaching might be the most immediate need over technical skills development right now.
Self-care as a strategy
Your team doesn’t need a burnt-out boss going into recession. So it’s essential you take care of yourself too – self-care really can be a strategy.
Normalise mental health conversations by modelling your own positive wellbeing behaviours.
Openly take a mental health day, and share your personal wellbeing practices – exercise, connecting with hobbies, being in nature.
Leaders can set positive examples by investing in coaching too, and sharing that proactive experience of their own commitment to self-development and growth.
Think simple, accessible ways communicate a commitment to creating a positive culture around mental health.
Prepare for opportunities
Remember that while few of us would welcome a recession, challenging environments also bring growth opportunities.
It’s about having the capacity to leverage new opportunities from a position of strength, rather than battening down the hatches to ride out the storm.
Again, be it talent acquisition, operations, or innovation, chances are your competitors will be pulling back.
Which means by increasing your investment in these same areas, you’ll be able to rapidly outpace other players in the market.
Now’s the time to get truly strategic too – explore new partnerships, leverage collaborations you’ve not had the time to focus on, go deeper into building your customer community.
For healthtech leaders, there’s such a brilliant opportunity to shape peer networks, share knowledge and create new opportunities together, to support and bolster the eco-system.
Keep mission focused
Research shows the most fulfilled employees are those that truly connect with their organisations’ values.
Staying on-mission keeps your people connected to a genuine sense of purpose in uncertain times.
And keeping customer success as your north star is a powerful way to do this, delivering on your promise of value.
Making sure your customers’ needs are front and centre, you can also better predict new challenges, respond with new solutions, leading with innovation and staying ahead in the market.
Tougher times demand you bring your mission into focus each day – share customer and client feedback across the team, acknowledge wins and the roles of each team member consistently.
A small thank you can go a long way.
Bring your team, your customers, your partners into your mission. This becomes a collective call to action – and your roadmap to longer-term success.
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