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How important is it for leaders to effectively communicate a pathway? That’s particularly hard in the current uncertain economic environment.

It was the same at the beginning of COVID.

I’m a communicator instead of an economist. I’ve tried to understand what’s happening by consulting with two financial gurus to come up with the moving parts, all of which influence our fortunes at home and at work:

  1. Inflation: RBA wants 2-3% for stability.
  2. Interest rates
  3. Unemployment rate.
  4.  Wage growth/contraction.
  5.  Sales: export growth
  6.  Productivity growth
  7.  Population growth.
  8. Cost and supply of energy.
  9.  Asset prices: stock/share markets; property values.
  10.  Overseas factors: geopolitics (global tensions, war, famine, etc); foreign exchange rates; external inflation and interest rates; import costs; sanctions.
  11.  Supply chain disruptions
  12. Extraordinary factors: floods, fires, drought, disease (e.g impact on agriculture).
  13. The public’s expectation (confidence) – including the influence of the media. If we think it will happen, our behaviour affects the outcome (we stop spending, demand wage rises, etc).

All these rub against each other, like giant icebergs in an ice flow. In other words, if one moves then all the others change position. This is made complicated by understanding that they are all moving at the same time, all the time!!

Then we have the two institutions that try and manage the above:

  1. Fiscal (Federal and state governments) policy and how they influence all the above moving parts:
    • Budget position – increase or pay-down debt
    • Taxation
    • Spending
    • Stimulus
    • Policy (health, education, etc.).
    • Monetary (Reserve Bank) policy, also trying to manipulate all the above:
    • Interest rates
    • Money supply (quantitative easing/tightening).

Tips on how to communicate about the economy:

  1. It should be part of an overall staff comms strategy, rather than in isolation. If employee comms is not normal, perhaps now is the time to start?
  2. Guide people on how to educate themselves.
  3. Bring it down to earth: how it will impact your families and tips on what you can do.
  4. Learn from others, e.g. Woolies and Coles talking about their price rises. Be open about the ‘Why?’.
  5. Give people an upside as well as the downside – other people want what Australia has (minerals, ag products, etc); we will come out the other side.
  6. The rich will get richer – so companies should watch for gross executive pay rises when the workers are doing it tough.
  7. Be sensitive about scare tactics from stakeholders with vested interests.
  8. Monitor feedback: beware also of communications fatigue.

P.S. Will Jim Chalmers meet the challenge with effective communication skills on this topic? Listen to his interview with Hamish Macdonald on RN(6/7/22); move past the politics to about 4 mins in.

Image source: The Australian

Author Peter Wilkinson

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