We are all earning our business stripes these days. There is considerable economic uncertainty. It’s challenging to make sense of both the short-term and long-term implications. When do you pivot? When do you cut costs? Where do you invest? How do you make the best use of your existing talent? Many questions need answering.
I am fortunate to work with over fifty businesses on a regular basis. I have the opportunity to observe both positive and negative aspects of leadership challenges. Here are some observations that I hope will be helpful as you continue to navigate 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 harsh realities of your situation and make difficult 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. Empower them to take on additional responsibilities. Ask them for input on the best direction for their area of the company. Assign them to lead 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. The present is not a time to provide security for your “C” players. Should they fail to fulfill their responsibilities or make a positive contribution to the team, their removal is necessary.
- Implement contingency thinking/planning in your organization. External and internal circumstances can change. Just as you are, your customers, suppliers, and other partners are dealing with their own uncertainty. You never know when your numbers could fluctuate rapidly based on factors beyond your control. Put a plan in place now. Don’t react emotionally in the moment when rapid change occurs.
- Keep your powder dry. Now more than ever, you should be laser-focused on your business liquidity. Cash really is king. Be cautious about incurring excessive 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 ensure you have sufficient 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 any impending difficulties. They have more tools at their disposal than they think.
- Don’t anticipate or expect any additional government handouts or financial protection. Yes, they may come. However, as much as possible, your business should be self-sufficient and not rely on external 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. Also, don’t dilute your culture by taking advantage of opportunities that don’t fit your identity and goals. 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 take on unnecessary or unwise risks.
- Strengthen your core product and service areas. Not every business line is created equal. You need to understand what’s generating revenue and what’s costing you too much. The numbers don’t lie. When you have limited discretionary investment capital, ensure that you focus on maximizing returns and mitigating risk. There should be no sacred cows, and let the numbers speak for themselves.
- Build your external network and peer relationships as a leader. This moment is not the time to close your door and sit alone in your office. You should reach out to your colleagues (and even competitors) to gain insight into their challenges and share best practices. The picture becomes clearer as more eyes focus on the horizon.
- Work diligently at retaining your culture, especially in a virtual environment. Don’t let your team members become disconnected from one another or the company’s mission. It’s the “ties that bind” that get us through the tough times.
- Increase your one-to-one and group communications significantly. Please don’t leave your people out there on their own trying to connect the dots. They will inevitably draw incorrect conclusions.
- Be on the lookout for burnout from your key staff and yourself. We’ve all been operating at maximum capacity for quite 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. Please ensure that you and your key team members are taking the necessary breaks. When things start to improve, you’ll require all your energy.
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 a matter of 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 remain functional rather than dysfunctional. We need to continue to invest in our own professional development and business intelligence. We must continue to view innovation as our path to progress. We need to continue to lean into this challenge with our eyes wide open, make thoughtful and informed decisions, avoid panic through planning and preparation, and embrace and create the future rather than resisting and bemoaning it.
Good luck, and keep up the good work!