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In the face of economic pressure, downsizing may appear to offer immediate financial relief. Yet decades of organisational research warns us: this short-term solution often inflicts long-term harm. Beyond the balance sheet, the true cost is diminished human capability, lost innovation, deteriorated morale, and a weakened foundation for recovery.
To remain competitive and resilient, organisations must evolve from production systems into learning systems. Now more than ever, investing in people — particularly through executive coaching — is not just a morale booster, it’s a business imperative.
The Hidden Cost of Downsizing
Reducing payroll during financial stress is a widely used tactic. During the Global Financial Crisis, it became almost a default response, with thousands of workers made redundant across industries. However, research shows that this reactive approach comes at a steep price:
  • Diminished sales capacity due to loss of client-facing staff
  • Innovation stalling from under-resourced R&D and strategy teams
  • Burnout escalation as survivors take on unsustainable workloads
  • Cultural erosion as psychological safety is replaced by uncertainty
  • Brand damage that hinders future talent acquisition
These impacts are especially damaging in leadership ranks, where institutional knowledge, influence, and decision-making capability reside. Without intentional development and support, organisations risk a leadership vacuum when they need strategic guidance most.
Coaching as a Catalyst for Resilience
Executive coaching provides a highly targeted, high-return strategy to support and stretch leaders through challenging periods. Rather than eliminating people investments during downturns, forward-thinking companies double down — coaching executives to adapt, pivot, and lead with clarity.
Organisations that sustain or even increase their investment in leadership development during economic hardship experience:
  • Stronger alignment with strategic goals as leaders are coached to prioritise and focus
  • Improved morale and retention as coaching sends a message of trust and long-term commitment
  • Increased discretionary effort from leaders who feel psychologically supported and empowered
  • Faster recovery post-downturn, due to preserved capability and culture
A global study of high-performing organisations found that those who invested twice the industry average in employee development enjoyed 24% higher profit margins and 218% higher revenue per employee over a five-year period.
Developing Talent from Within
With baby boomer retirements accelerating, the need to develop internal leadership pipelines has never been more urgent. Executive coaching enables organisations to:
  • Identify high-potential leaders early
  • Tailor development to individual readiness and strengths
  • Accelerate growth in areas like resilience, communication, influence, and decision-making
  • Foster succession readiness without relying on external hiring
Rather than viewing coaching as a remedial or luxury investment, best-in-class organisations now treat it as a core talent strategy — especially for navigating complex change and shaping the future of the business.
A Better Way Forward
Economic downturns are not just threats — they’re opportunities. They offer a unique moment to recalibrate, reallocate, and reaffirm what matters. Investing in executive coaching during these periods enables leaders to emerge stronger, more adaptive, and more aligned to purpose.
At Steople, our executive coaching programs are built on psychological research, behavioural science, and a deep understanding of organisational dynamics. Our bespoke coaching engagements deliver measurable growth by:
  • Using the Steople Positive Behaviour Change Framework™ to track progress
  • Aligning coaching outcomes with organisational strategy
  • Building emotional intelligence, decision agility, and resilient leadership
  • Supporting leaders to become mentors, change agents, and cultural custodians
Let’s Shape the Next Era of Leadership
Whether your business is weathering a downturn or preparing for the next growth phase, your leaders need the right support to thrive. Executive coaching is not a cost — it’s a catalyst for transformation.
Contact Steople today to explore coaching solutions tailored to your leadership team.
Recovering from Burnout and Leading with Purpose: Insights from Lieutenant General John Frewen
In Episodes 13 and 14 of the Leadership and Wellbeing podcast, Lieutenant General John Frewen shares his extraordinary journey through high-stakes leadership, recovery from burnout, and the power of self-awareness. With more than 40 years of service in the Australian Defence Force (ADF), Lieutenant General Frewen brings a wealth of insight into what it takes to lead under pressure while maintaining physical and psychological health.
The Weight of Command
From leading multinational operations in Rwanda, the Solomon Islands, and Afghanistan to heading Australia’s COVID-19 vaccine rollout, Lieutenant General Frewen has carried immense responsibility. But such roles came at a cost. In Episode 13, he reflects on the personal toll that leadership can take, sharing how burnout affected his wellbeing and decision-making capacity.
Burnout, as defined by the World Health Organization, results from chronic workplace stress that has not been successfully managed. It manifests as exhaustion, cynicism, and a sense of reduced effectiveness – and John felt them all.
The Role of Self-Awareness in Leadership
In Episode 14, we explore how John used self-awareness to rebuild his leadership approach. He reflects on moments when his team had to intervene and tell him to slow down, prompting a deeper understanding of his limits and needs. This humility and openness to feedback became the foundation for lasting change.
John now regularly assesses his capacity and encourages his team to do the same. His commitment to creating a culture where people feel safe to speak up has enhanced not only his effectiveness but also his team’s cohesion and trust.
Trauma and Psychological Support
Throughout his career, John has championed the importance of mental health in high-stress environments. Drawing on the ADF’s model of mandatory psychological check-ins, he likens psychological support to having a personal trainer for your mind. By normalising mental health conversations, leaders can encourage early intervention and build a culture of resilience.
Rest, Recovery, and Performance
We also discuss the Effort-Recovery Model by Meijman and Mulder (1998), which emphasises the importance of rest after periods of high effort. John now prioritises daily and weekly recovery rituals—whether it’s physical exercise, sleep, or time with family – to recharge his energy and sustain high performance.
These strategies aren’t just for the military. Leaders in any sector can benefit from pausing to reflect, setting boundaries, and supporting the wellbeing of their teams.
Key Takeaways for Leaders
  1. Recognise Burnout Early: Learn the signs of stress and create space for recovery before it escalates.
  2. Foster a Culture of Support: Normalise psychological check-ins and encourage open dialogue about wellbeing.
  3. Lead with Humility: Seek feedback and remain open to adjusting your leadership approach.
  4. Build Team Resilience: Use group discussions and collective reflection to navigate challenging experiences.
  5. Prioritise Recovery: Balance periods of intense work with regular rituals for rest and renewal.
Why This Matters
Lieutenant General Frewen’s story is a compelling reminder that even the most experienced leaders are vulnerable to burnout. For people like Andrew aiming for board-level performance or Alex focusing on psychological safety, these insights highlight the necessity of wellbeing as a foundation for sustained leadership.
Take the Next Step
For more, tune in to Episodes 13 and 14 of the Leadership and Wellbeing podcast. Discover how to recover from burnout and lead with renewed clarity and purpose.
https://haydenfricke.com/leadership-and-wellbeing-podcast/
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