Stay in the know. Subscribe to Currents
CurrentLead

3 Ways Small Business Leaders Can Prepare for an Election Year

3 Mins read

Recent history suggests that the year of a U.S. presidential election can be marked by either economic turmoil or relative stability and recovery. What tends to distinguish a presidential cycle from other years is the dynamic interplay between market events and campaign positioning.

Market indicators become magnified as they are scrutinized for messages about the economy, while market crises are often utilized as political leverage. For instance, the financial crisis in 2008 set the tone for the final stretch of the election cycle, as the shock of Lehman’s September 2008 bankruptcy seemed to tilt an even race towards Obama.

While election years bring uncertainty and volatility to the markets, the impact doesn’t end with the announcement of a winner. The 2008 crisis delayed several developments in the health care industry as health care reform efforts, one of Obama’s key campaign promises that would eventually become the Affordable Care Act, had to wait until after the passage of a significant economic recovery package, the American Recovery and Reinvestment Act.

In 2000 and 2016, growing economies allowed for more nuanced campaign messages that focused on sustaining growth trajectories and addressed fiscal and regulatory issues, all of which had long-term economic impacts. It takes time for the market to digest new policies and their implications, prolonging these periods of instability. Volatility can pose challenges for small business leaders and executives, hindering their organization’s ability to stay focused and achieve its goals.

To lead effectively through the upcoming contentious election cycle, small business leaders can begin implementing proactive strategies now. Here are three key approaches to help lead through an election year:

 #1. Focus on risk management

As election-related uncertainties can introduce volatility into the market, it is essential for small businesses to review their balance sheets and potentially strengthen cash positions in the short term. It is also a prudent time for crisis stress-testing. Conducting tabletop exercises to simulate various scenarios, including those stemming from political maelstroms, allows organizations to identify potential vulnerabilities and refine their response strategies.

Tabletop exercises will ensure staff understands the roles, responsibilities, and priorities for collecting and communicating information during a political crisis. Developing robust risk management and crisis communication protocols enables businesses to swiftly address disruptions and reassure stakeholders about the organization’s resilience, thereby safeguarding its reputation and maintaining stakeholder trust.

#2. Review and reiterate company values

In preparation for the upcoming election cycle, it is imperative for business leaders to review and reaffirm their company’s mission and values. Articulating these core principles can provide a guiding framework for decision-making during a contentious time. It also can foster alignment among employees towards common goals.

The election cycle presents an opportunity to reestablish priorities that may have previously been in conflict with the political environment and review issues that may land on the ballot and impact corporate interests. In reviewing corporate values, make sure you have clear guidelines, with alignment from the board, to establish any public or private company stance on topics that may be viewed as politically controversial, and anticipate some backlash if your company chooses to allocate funds to political candidates or issues.

Review your code of ethics and ensure that it includes clear guidelines regarding corporate and employee campaign contributions and political activities. By communicating transparently and ensuring compliance with relevant regulations, your organization can maintain integrity, proactively address potential conflicts of interest that may arise, and achieve its business objectives.

#3: Foster a community of civility

Recognizing the potential for political campaigns to create divisions within the workplace, small business leaders should emphasize a sense of community and civility among employees. Encouraging open dialogue and respectful discourse promotes inclusivity and diversity of thought, contributing to a more cohesive and productive work environment.

Additionally, communicating support for employee participation in the democratic process, including policies related to taking time on election day to vote and civic engagement, reinforces the organization’s commitment to democratic principles and empowers employees to exercise their rights responsibly.

It is always critical to nurture a culture of unity and respect, but the importance of civility during election years is magnified. Small businesses that effectively mitigate the risk of internal discord and maintain focus on achieving their strategic objectives amid the distractions of election season are likely to perform more cohesively once the election has passed.

As the U.S. presidential election approaches, business leaders should be proactive in preparing their organizations for potential disruptions and uncertainties. By defining company values, strengthening crisis communications, and fostering a sense of community and civility among employees, organizations can approach the challenges of an election year with confidence and optimism for the future.

Kavan Choksi, a successful investor, business management and wealth consultant at KC Consulting. He works strategically with companies across fast-moving consumer goods, retail and luxury markets – leveraging his vast experience to help clients turnaround and revitalize their business.

With expertise in economics and finance, Kavan has developed a passion for investing over the years and enjoys helping others do more with their money. He provides thoughtful commentary to publications such as CNBC, Business Insider, MSN, International Business Times, and Nikkei. Kavan is also a regular contributor for Nasdaq, where he shares his expert insights on what’s moving markets and the global economy.

Election stock image by Derek Hatfield/Shutterstock

Related posts
CurrentMarketing

Crafting a Memorable Brand Identity as a Small Business 

4 Mins read
As a small business owner, standing out can feel as challenging as being a mom-and-pop shop on a street full of big-box…
CurrentManage

5 Ways Small Businesses Can Recover from Supply Chain Disruptions

5 Mins read
Over the past four years, global supply chains have been pushed to their limits, revealing the weaknesses of a complex system that…
CurrentLeadManage

Building Leaders From Within—Growing Employees Into Management Roles

3 Mins read
Companies that promote from within sidestep many of the pitfalls associated with filling management roles. It helps them preserve their organizational culture,…