US businesses buckling in amid growing fears of recession
Written by Dan Parry • 3 April, 2025
Leadership Article
Uncertainty can be paralysing. Businesses across the US have been pausing decisions and delaying actions amid what Federal Reserve chair Jerome Powell described as “heightened uncertainty about the economic outlook.” That was before the new round of tariffs. Given the uncertain future, how can leaders protect productivity, maintain morale, and keep their team on track?
The short-term impact of the “Liberation Day” tariffs won’t be pretty. And it will hit just when the US may face slower growth, higher unemployment and higher prices, according to the Fed. “This is a very resilient economy…But it doesn’t like this uncertainty”, said David Kelly, chief global strategist at JPMorgan Asset Management.
Uncertainty is the prospect of slipping into unmanaged difficulty. It’s associated with fear of a future that cannot be reliably predicted or governed. Acknowledging the link between unmanaged circumstances and fearful reactions is the first step towards developing a plan of action.
It’s easy to confuse uncertainty with change and complexity. But each of these challenges demands its own specific response.
Imagine a walk in the park – same path, every day. Change puts you on an unfamiliar path. Complexity adds a confusing number of alternative paths to choose from. Uncertainty throws in fog and a trip hazard – which maybe explains why businesses have been treading carefully.
Managing uncertainty comes down to finding a secure path back to business as usual.
Uncertainty can have one underlying cause (such as a pandemic) or many (financial factors, for example) that come together within a relatively short space of time and combine into something that’s hard to calculate.
At the moment, America’s economic future feels unclear. And somewhere out there in the fog is a potential recession threatening to trip those who aren’t ready for it. Consumer sentiment has plunged 30% since November. People are buying fewer products, fearful of high unemployment and high prices – a combination that could see a return to the stagflation of the 1970s.
In times such as these, what are the key skills that leaders can rely on?
Managing uncertainty begins with thinking about solutions in advance. Early preparation gives leaders the confidence to sidestep natural feelings of fear and focus on five key skills that will help take them forward.
Together, these five skills offer a path back to a more promising future. For leaders who develop them early on, uncertainty may even present an opportunity to gain a little competitive edge.
The five skills are:
Fear is a natural reaction to uncertainty; it might even be your first reaction. But don’t allow it to be your last. It comes from the disconnect between the need for solid answers and the absence of clear information. The brain prefers confident certainty and tends to interpret uncertainty as a threat – which leads to a fight or flight response.
By managing your relationship with uncertainty, for example focusing on decisive steps forward, you can look past fear and break free of its paralysing influence. This involves learning a new response to uncertainty.
Instead of fear (of the unknown), uncertainty can lead to acceptance (of a new set of market conditions and opportunities). Leaders may choose to accept that – along with new difficulties – there are new things to learn that may make life easier. It’s about keeping an open mind, which is what Satya Nadella, CEO of Microsoft, meant when he said that leaders must shift from a “know it all” to a “learn it all” mindset.
A show of confidence helps others follow your direction. Take your team towards solid ground by reframing uncertainty as an opportunity rather than a threat, a chance to come up with new solutions that can lead to recognition and reward.
The resilience, of your employees and your organisation, can be developed long before you need to rely on it. Start by focusing on your people. An organisation will be in better shape if its greatest asset is protected. By encouraging a culture of trust, respect, belonging, and psychological safety, team members will reach a level of collaboration that will withstand testing times.
Rather than allowing themselves to be unglued by uncertainty, teams who trust each other will come together to find the creativity, engagement, and productivity that will help the business pull through. Organisational resilience at this level is best developed by thinking about culture as a long-term commitment by the board not just a single initiative from HR.
By offering support, creating goals, and maintaining focus, resilient leaders present calm and confident optimism. They encourage purpose, maintain motivation, and create the sense of safety that allows people to make suggestions and take risks.
Effective communication is critical to the reset of the relationship with uncertainty. Leaders can only maintain the support of their people through honest updates and clarity.
When you feel like you might be saying too much too often, to everyone else it may seem that you’re finally saying enough. Take time to listen. Authentic appreciation of others’ fears and concerns helps to develop leadership credibility.
Communication need not be reduced to a transactional exchange of information. Regular updates support optimism, direction, and teamwork, and help people make sense of what might be happening around them. Even when there’s no update to give, there’s still plenty that can be said about being in it together. Not saying anything speaks volumes and can lead to negative assumptions and frustration.
The pursuit of perfectionism is a negative. It dedicates time and energy to chasing something that’s neither possible nor even necessary. Better to aim for progress instead.
A preference for perfectionism doesn’t reveal the presence of superhuman abilities, it indicates the absence of a disciplined view of reality. Stay realistic by maintaining honesty and integrity, paving the way for any tough messages that need to be delivered.
Ironically, perfectionism can lead to timid and imperfect ways of working. People may stick to safe methods that they know will be OK instead of trying something new that might work out for the better. Perfectionists worry about getting things wrong. But mistakes along the way can be regarded as lessons learned, leading to better abilities the next time bold actions are called for.
It can be tempting to look back on better times of confidence and certainty. But neither certainty nor uncertainty are as solid as they might seem. In business, there’s only ever a fluid set of circumstances that requires an alert and agile response.
Fear can lead to two secondary reactions: paralysis or heightened action. In the fog of uncertainty, you can avoid tripping up by standing still. But this isn’t a recipe for success. No-one thrives in paralysis.
Heightened action (fight or flight) isn’t much better. The urge to throw caution to the wind and just do something can make a difficult situation worse. Concern expressed by others (shareholders for example) can push them to demand action. But between paralysis and a rush to action lies a third way. This involves maintaining a framework for decisions, developed in advance and based on clear parameters.
In times of uncertainty, leaders cannot be expected to solve all the problems themselves when no-one can see the issues clearly. Leaders will need to draw on support from their team. And by calling on their wider network, they’ll be able to discover how others are looking at the situation, allowing alternative viewpoints to inform their decisions.
At Working Voices, we spent two years researching and developing a training programme designed to support engagement in all eventualities, including uncertainty. In March 2025, we published our detailed research and conclusions in our book, Engaging Teams, available in the US and UK.
Focusing on future skills, our Team Engagement curriculum includes two modules on leading through change and complexity. A third module, specifically focusing on managing uncertainty, includes ideas briefly sketched out above.
Managing uncertainty requires an element of confidence. Not just the sure-footedness to take decisive steps when the going gets tough, but the confidence to prepare ahead of time. Whatever the future might bring, investment in skills pays dividends and might just make the difference between surviving and thriving.
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