When tough conditions persist, the decisions that help a business survive today can quietly become the habits that hold it back tomorrow.
Thinking Differently in Tough Times
This is the first in a three-part Herrmann series exploring how pressure can shape the way leaders and teams think, make decisions and respond to change.
There’s no shortage of pressure on business leaders right now.
Costs are rising. Customers are cautious. Margins are being squeezed. Economic and geopolitical uncertainty continue to affect confidence, investment and operating costs.
In Australia, almost half (46%) of businesses surveyed by the Australian Bureau of Statistics in June 2026 reported an increase in operating expenses over the previous four weeks. Among those experiencing higher costs, 65% cited business overheads as a factor, while 40% pointed to staffing-related costs.
The pressure is particularly apparent among smaller organisations. Twenty-nine per cent of small and medium businesses expected difficulty meeting their financial commitments over the following four weeks, compared with 17% of large businesses.
For leaders navigating this environment, the instinct to protect the business is understandable.
Watch the numbers more closely. Cut discretionary spending. Delay investment. Reduce risk. Focus on what’s immediately in front of you.
Sometimes, those are exactly the right decisions.
The problem begins when a temporary response to difficult conditions quietly becomes the way the business operates.
Marketing investment gets cut because the return isn’t immediate. Recruitment is frozen, leaving existing people stretched. Innovation projects are postponed. Leaders become more involved in operational decisions. Teams become reluctant to experiment because failure feels too expensive.
Individually, each decision may make perfect sense. Collectively, over time, they can change the organisation.
Survival mode has become the strategy.
What pressure does to decision-making
When conditions become uncertain, leaders don’t suddenly lose their ability to think. But pressure can change how they think.
A meta-analysis of research into acute stress and executive function found that stress can impair working memory and cognitive flexibility — our ability to shift perspectives and adapt our thinking as circumstances change.
Organisational researchers have also identified the “threat-rigidity” effect: under perceived threat, individuals and organisations may restrict information processing, centralise control and fall back on familiar responses.
Importantly, pressure isn’t inherently bad. A degree of urgency can sharpen focus and accelerate action. The problem arises when urgency becomes the normal operating environment.
When every problem feels urgent, immediate concerns can start crowding out longer-term questions.
Where can we save?
What can we stop?
What can we delay?
How can we do more with less?
All are legitimate questions. But what happens to the questions that aren’t being asked?
What has changed in our market?
What are our customers telling us?
Which assumptions are we still making?
Where should we be investing rather than cutting?
What opportunities are emerging because conditions have changed?
When short-term decisions create long-term consequences
One of the challenges of survival mode is that its effects may not become obvious immediately.
Reducing investment can improve this quarter’s numbers while weakening next year’s pipeline.
Freezing recruitment can protect costs while increasing pressure on the people who remain.
Centralising decisions can reduce risk in the short term while making the organisation increasingly dependent on a handful of leaders.
Avoiding experimentation can prevent expensive mistakes, but it can also prevent the organisation from discovering what needs to change.
None of this means businesses shouldn’t cut costs, manage risk or protect cash. In difficult conditions, they often must.
The more useful question is:
Are we choosing this response because it is the best response, or because it has become our default response?
When survival mode becomes a thinking problem
This is where the issue becomes more than financial.
Under sustained pressure, familiar ways of thinking can feel safer and faster. Leaders naturally gravitate towards the information, approaches and solutions they trust most.
But the challenge facing the business may require something different.
At Herrmann, we see this through the lens of thinking preferences. We all have preferred ways of approaching problems and making decisions. The challenge is recognising when those preferences are helping, and when they may be limiting what we see.
We explore the neuroscience behind this more deeply in Think Smart Under Pressure: The Neuroscience of Decision Making and the Power of Whole Brain® Thinking, including why pressure can cause us to fall back on familiar approaches.
That raises a bigger question for leaders:
When conditions change, can your organisation change the way it thinks?
Tough times call for broader thinking, not just harder work
Economic conditions will change. New competitors will emerge. Technology will disrupt established ways of working. Customer expectations will shift again.
Businesses can’t control all of those forces. What leaders can influence is how their organisations respond. That starts with recognising when a useful short-term survival response is becoming a limiting long-term mindset.
Protect what needs protecting. Make the difficult decisions. Pay attention to the numbers. But don’t allow survival mode to become the only mode your business knows.
Because when conditions change, doing more of what you’ve always done isn’t necessarily the safest strategy. Sometimes, the most resilient thing a business can do is recognise that it needs to think differently.
Don’t let pressure dictate how you think
Understanding how you respond to stress can help you recognise when pressure is influencing the way you think, communicate and make decisions.
Our Stress Management Toolkit offers practical Whole Brain® strategies to help you navigate pressure, manage stress and stay on course when conditions get challenging.
Download the free Stress Management Toolkit →
Next in the series: When Pressure Narrows Your Thinking: What Are You Missing?
