We are all earning our business stripes these days. There is a lot of economic uncertainty. It’s hard to make sense of both the short and long term. When do you pivot? When do you cut costs? Where do you invest? How do you make the best use of your existing talent? There are a lot of questions out there that need answering.
I have the good fortune of working with over fifty businesses on a regular basis. I get to see the good, the bad, and the ugly when it comes to leadership challenges. Here are some observations that I hope you will find useful as you continue to manage through these challenging times.
- Stay optimistic and positive but make sure your conversations are grounded in reality. You can’t ignore the truth. Yes, there are some things we can overcome with hard work and a positive attitude. However, sometimes you must accept the brutal facts of your reality and make tough decisions. Don’t dither.
- Double down on your top performers. Now more than ever you need to rely on your talented employees. Stretch what you think they’re capable of. Ask them to take on more responsibility. Ask them for input on the best direction for their area of the company. Put them in charge of critical work groups or teams. They are there to help. They want to help. They are your future. And, pay them more if you need to. They are worth it.
- Have zero tolerance for toxic employees. This is not a time to provide security for your “C” players. If they can’t step up and do the job or be a good teammate, then they should be gone.
- Implement contingency thinking/planning in your organization. External and internal circumstances can change. Just like you, your customers and suppliers, and other partners are dealing with their own uncertainty. You never know when your numbers could go up or down quickly based on factors beyond your control. Put a plan in place now. Don’t try to react emotionally in the moment when rapid change happens.
- Keep your powder dry. Now more than ever you should be laser-focused on your business liquidity. Cash really is king. Be careful about getting into too much debt too soon. Reduce unnecessary expenses. Be very strategic about your investments. We don’t know how long this uncertainty will last. You want to make sure you have enough capital to see it through. Balance your short-term needs against your long-term survival and success. When things turn around, you’ll want to be able to take advantage of it.
- Treat your bank as a business partner. Don’t hide bad news from them. View them as a resource that can help you navigate your way through any impending difficulties. They have more tools at your disposal than you think.
- Don’t anticipate or expect any additional government handouts or financial protection. Yes, they may come. However, to the greatest degree possible, your business should be able to stand on its own without 3rd party subsidies. And, please don’t include PPP funds in your profit calculations.
- Establish and use decision-making filters. This is not the time for “off the cuff” decision-making. Make sure you screen all major decisions against your strategic and tactical realities. In addition, ensure you don’t dilute your culture by exploiting opportunities you shouldn’t even consider in the first place because they aren’t a good fit with who you are and what you are trying to build. Now more than ever, learn to say no. Never act out of desperation and be true to your business model. I’d rather have your business contract and remain strong than grow and increase unnecessary or unwise risk.
- Strengthen your core product and service areas. Not every business line is created equal. You need to understand what’s making you money and what’s costing you too much money. The numbers don’t lie. When you have limited discretionary investment capital, make sure you’re focused on maximizing your returns and mitigating your risk. There should be no scared cows and let the numbers speak for themselves.
- Build your external network and peer relationships as a leader. This is not the time to close your door and sit alone in your office. You need to reach out to your colleagues (and even competitors) to get a sense of what they’re dealing with and to share best practices. The more eyes that are focused on the horizon, the clearer the picture becomes.
- Work diligently at retaining your culture, especially in a virtual environment. Don’t let your people get disconnected from one another or the mission of the company. It’s the “ties that bind” that get us through the tough times.
- Increase your one-to-one and group communications significantly. Don’t leave your people out there on their own trying to connect the dots. They will inevitably jump to the wrong conclusions.
- Be on the lookout for burnout from your key staff and yourself. We’ve all been working in high gear for some time now. I know many leaders who haven’t taken a vacation in well over a year. You need to protect your time off. You need to maintain some semblance of balance with your personal and business life. Your family shouldn’t become a casualty of your business stress. Make sure you’re taking the requisite breaks and that your key people are doing the same. You’ll need all your energy when things begin to turn around.
I have great confidence in the resilience of the US economy and the talents of our small business leaders. The American business century wasn’t just timing and good luck. We built a business infrastructure that is the envy of the world. We need to stay unified and help one another. We need to ensure that our markets stay functional rather than dysfunctional. We need to continue to invest in our own professional development and business intelligence. We need to continue to see innovation as our path to progress. We need to continue to lean into this challenge with our eyes wide open, make thoughtful informed decisions, avoid panic through planning and preparation, and embrace and create the future rather than resisting and/or bemoaning it.
Good luck and keep up the good work!