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Leadership In Crisis

In 2009, RedBalloon made the BRW fast list for the sixth time – even despite the economic downturn. In the end, it came down to brave strategy and leadership in crisis mode.

The team was pretty chuffed. Not a bad effort given that it was all organic growth. We did not make any acquisitions. The bigger you get the harder it is to keep growing quickly. Together with the ‘downturn’ I had no idea how we would fare that year.

As part of the process we were asked to consider some ‘why us’ questions. I thought I would share our answers in hindsight as a lesson in leadership during a crisis:

Has the economic downturn offered opportunities for your business?

Yes – there is no doubt that there are more opportunities…


What were the opportunities and what have been the outcomes so far?

We haven’t viewed the economic downturn as a reason to put the brakes on our growth strategies, we believe that now is the time we should be investing in order to reap the rewards in the upturn. We can negotiate better deals now, to take products to market quickly and more cost effectively than we would have been able to at a market peak.

Two opportunities we have invested in are:

    • Retail – we have been looking to enter the retail marketplace for a number of years now and the conditions have never been right. We made the decision to launch into retail just before the downturn took hold and all we have done since is increase the scope of our retail strategy, such is the level of engagement with our brand.
    • Our Corporate Services – in a downturn as budgets and headcount get cut, businesses can also find themselves facing morale and engagement issues as valued colleagues disappear and many corporate benefits are put on hold. We have been investing in strengthening our corporate services messaging, in a down turn it’s more important than ever to continue to invest your people, so that they stay with you on the journey. Our reward and recognition conversations remain buoyant and incentives enquiries are up.


What steps have you taken to mitigate the effects of the economic downturn on your business?

It’s funny, after the initial media doom and gloom stories, we were actively sought out by journalists looking for a positive counter balance.

Yes, we may be technically in a downturn but we have a compelling vision and absolute alignment across the business to take us there. We are not downgrading our plans for investment in growth, we are just working smarter and more efficiently.

With full transparency on our financials, we engage our people to ensure we stay on track. We’ve made the decision to invest heavily in our IT resourcing and infrastructure, doubling the team in the last 3 months and yes it does come with some compromises.

This is not the year for extravagance, we can’t justify another company ski trip! But no one expects it. Our people expect us to be responsible and frugal in a downturn as long as we don’t strip out all sense of fun and culture.


What are the most important trends emerging in business this year?

We are definitely seeing a trend towards customers wanting more:

  • transparency across the board, more clarity on what fees cover,
  • even more information on experiences than we currently have room to publish,
  • more reviews and
  • more ways to look into who we are as individuals and what we stand for.

People want to see our personalities and know that what we present is really authentic. We are who we say we are and yes we really do have this much fun.

People want to engage with us as a collection of individuals, that stand for something, we are seeing it and hearing it from our fans on, our reviews, customers who call us and we need to cater for the multiple ways people want to engage with us.


What will be the barriers to growth?

We are finding in a downturn the decision-making process really seems to slow down when looking for new opportunities and dealing in the corporate space.  Sign off has to go higher than it used to and generally speaking people will avoid anything with a level of risk attached. Rebuilding confidence in taking risks and being decisive is the biggest barrier to overcome.


What challenges does an economic recovery pose?

We have not altered our course in the downturn, we have continued to invest and deliver on the strategy. If anything we have an even greater sense of urgency. We have to do more with less, we must continue to innovate – it is the successful execution of great ideas that see us stay competitive and fast growing.

Reader Interactions


  1. A sound plan – confidence is an important key during a downturn, especially when you’re selling to corporates that are cost cutting and can easily find a reason to push you aside. I like your strategy of keeping corporates informed about the importance of maintaining a scope for morale especially when times are tough.

    The retail sector is a different story… I have noticed RBD retail boxes in myer, and I’m interested on how well they’ve been working? I remember another business had the same strategy long before the GFC and at some point pulled the plug on it, I’m assuming because of performance – although it provides good exposure in high areas of walk through traffic I’m not sure if the ROI would be worth it? Considering current GFC, costs of packaging, distribution and product positioning within the centre vs sales of the actual product.


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