Plan for the unexpected, but lead through the surprise
The year started out strong with the economy projected to have slow but continued growth, continued low unemployment, and overall, 2020 looking like a fairly good year in all respects. Then, COVID-19, or better known as the coronavirus began impacting the global economy. Starting with international travel restrictions, quarantine of those traveling abroad, and large gatherings/events being cancelled and/or spectator attendance limited.
What do you as a business owner do when unplanned, uncontrolled events happen in your business, such as:
Loss of a large customer due to acquisition/consolidation
Large projects or engagements being delayed or cancelled
Mix of work changing causing either increased or decreased capacity
Supply chain interruptions
Loss of a key employee
Over the past 10 years, we have experienced the longest U.S. economic expansion in history, breaking the record of 120 months from March 1991 to March 2001, according to the National Bureau of Economic Research. So as business owners, most of what we’ve seen has been an upward trend for an extended period. We begin to forget and/or haven’t experienced a slowdown or recessionary business trend, depending on how long you’ve been in business.
As we advise business owners when we are discussing exit planning, strategic planning, and general financial planning/forecasting, you need to plan for what you can control and adjust accordingly.
I recently had a coaching meeting with one of my clients that is experiencing 3 of the 5 items listed above. They have been on a growth trend, have added people, and then a large customer project got indefinitely delayed, workload and projects fell off dramatically because of the concentration on this one project, and a key employee recently left.
As a business owner, we all carry stress and anxiety about our businesses because of the large responsibility we hold for our customers/clients and our employees. Also, many business owners tend to want to control outcomes. So, when uncontrollable events happen, it can throw the business owner into a tailspin.
Here are some thoughts on how to respond to unplanned and uncontrollable events.
Take control of that which you can control
o What do you know? Focus on that.
o Give hope to your organization but lead with reality.
o Don’t make hope your strategy. Base forecasts on reality as much as you can.
o Being externally focused, confronting the economic reality, and building a stronger future state for your business will give hope to your organization – and to you.
o Make decisions on what is known. Current and projected workload, resource capacity, spending, etc.
·Communicate, communicate, communicate
o Engage your entire team
§ Be a role model for open dialogue
§ Talk about stress and how you’re dealing with it
§ Talk about the importance of having colleagues, mentors – people you can feel safe having a conversation
Let your team be part of the solution – no one likes to be in a helpless position, so let them be part of fixing the problem
§ They are the ones who can help you turn your forecasts into results.
The lesson here is, you can mentally prepare yourself for a surprise, but never kid yourself that you’re truly ready.
Every business goes through cycles of good times and bad. How you handle those cycles defines your leadership. It’s easy to lead when everything is going well. It’s a lot harder to lead when you are stressed, feel anxious, and/or are carrying the weight completely on your shoulders. Realizing that your leadership is based on your ability to rally when the chips are down, but be transparent about the situation, are critical traits that can build a stronger, better, and more engaged team.
Being a business owner is not for the faint of heart. Yet, working through the tough times makes the good times that much sweeter. Don’t operate by fear, but rather control what you can control, make the tough decisions, but engage your team. These times too will pass. Lead, learn, and grow! You will be stronger both individually, as a team, and as an organization.
Jayne McQuillan, CPA, MBA, CEPA, President, Journey Consulting, LLC