June 18, 2020 6 min read
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Back in 2008, I was happily running a thriving ad-tech business — until the day the economy tanked. I woke up that morning to find my inbox overflowing with about 50% of my customers writing to cancel their services. Pretty soon, I was having to lay off dozens of smart, hard-working employees and move our office, along with a handful of survivors, into a barn. I had to give up my family home, too, and move with my wife into a moldy studio apartment. Unable to pay my remaining employees and also myself, I spent my weekends refinishing furniture and selling it at yard sales to make ends meet.
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Unfortunately, many startups are now staring down the barrel of a crisis that threatens to dwarf anything I saw during the dot-com bust or the Great Recession. To ensure their companies survive this pandemic — hopefully, without issuing too many pink slips — founders will need to learn from past economic disasters and get smart about crisis management.
Unfortunately, the skills you’ve picked up running a successful business don’t necessarily equip you to cope with catastrophes. Over the past few years, I’ve interviewed Navy SEALs, fighter pilots, and even a battleship captain to learn how the military trains its people to cope with unforeseen disasters, and I’ve found that there are four key steps all organizations must take in order to survive a major crisis:
1. Stop the bleed
First things first: you’ll need to do some damage assessment. Which clients have you lost for good, and which could be brought back on board? Which are shaky, and need convincing to remain with you?
And what other vulnerabilities are you facing — will crucial vendors be going under as a result of the crisis, or will your distribution pipeline be disrupted? Will your marketing and sales efforts still work in the era of widespread lockdowns, or do you need a new approach?
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Once you’ve figured out what’s broken, take what steps you can to help stabilize and stop the bleed. That doesn’t mean putting everything right immediately, but it does mean taking whatever immediate, obvious steps you can to keep things from getting worse. Once those fires are put out, you can survey the rubble and start figuring out how to make things better.
2. Find your crisis pivot
This is the critical bit: once you’ve bandaged the open wounds, you need to stop, take a breath, and figure out how to move forward. After all, you still have customers, assets, and talented employees. How can you leverage those resources in new ways? How can you bring in and adopt new technology? How can you do things differently today to keep revenues flowing, keep your people employed, keep your customers engaged, and keep stakeholders and investors on-side?
Figuring that out requires looking with fresh eyes at your team, your customers, and the world around you. Any crisis changes the marketplace — so what does your new market look like? You’ll need to figure out how the world has changed in order to find your own place in it. The good news is that when you switch into pivot mode, you’re taking ownership of that process, and beginning to lead instead of simply getting run over by problems.
3. Seize the opportunity
Once you’ve figured out a plan for pivoting your organization, it’s time to start executing. The leaders who do this best are the ones who understand that every crisis brings real opportunities. After all, the world will look very different once the dust settles — and the difference between the past and the future is where opportunities arise. Whichever companies see those opportunities the clearest and seize them earliest will be positioned to lead their industries as this crisis comes to an end.
If you have the first two pieces in place, then you’ll be well-positioned to act to seize the opportunities you’ve identified. Of course, every crisis is made up of lots of little crises, and you’ll have to keep putting out new fires and solving new problems as you pivot. But by forging a clear plan for the future, you’ll be able to prioritize, manage your limited resources effectively, and set the stage for lasting success.
4. Get back to business
When you’re rushing around putting out fires, it’s easy to get hooked on adrenaline — but at some point, you have to go back to acting more deliberately. Try to do that too soon, and you won’t survive or adapt to the new world you’re facing. Do it too late, however, and your pivot will turn into a flash in the pan, without a resilient and deliberate operational infrastructure to sustain it.
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The key is to remember that getting back to business is a gradual process, and different parts of your business will be restored to normal service before others. Sales teams, for instance, can get back to pitching deals almost as soon as you’ve hatched a strategic plan for them; your finance team, on the other hand, might need a longer runway while they find new capital or undo the damage wrought during the early days of the crisis. It’s important to manage that reality carefully, in order to prevent chaos without forcing your team to run before they can walk.
Don’t panic or despair
When the sky seems to be falling, it’s easy to fall into panic or despair — but I’m here to tell you that if you play your cards right, it’s possible to survive and thrive amidst virtually any crisis. After all, I’ve led more than a dozen startups, and I’ve never seen a company launch that went completely according to plan. Nobody wants things to go wrong, but often it’s the bumps in the road that help you figure out exactly what makes your company special and the enforced detours that ultimately lead you to lasting success.
That’s not to say that the coming months won’t be incredibly challenging for businesses. But if you get serious about crisis management, set the right priorities, and execute accordingly, you can emerge on the other side with a stronger, leaner, and more profitable business. Get that right, and you’ll be ready for success — and secure in the knowledge that you can handle whatever the future throws at you.
This article is from Entrepreneur.com
