Freeze, Fumble or Fight
Leading Through Crisis
Six months into COVID-19 and it is not over yet and could be another year or more before it is behind us. Like many I am hopeful we have started to turn the corner on this horrible pandemic. I think we are nearing the end of the beginning and will soon be at the beginning of the end. With better and more effective testing and therapeutics and vaccines close to being approved, the light at the end of the tunnel is no longer a proverbial train.
In this 24 minute presentation I offer some thoughts, ideas and insights into what business owners can do to FIGHT AND THRIVE, not just during this crisis but as we move ahead beyond this crisis. If you prefer you can read the full post below including a couple of updates not on the video and a special bonus..
To get a new Tip every 3 days to your email, register to the right.. To your Success!
No question right now COVID-19 has our attention. The good news is that it is not an extinction level event and we will get through this. The bad news is that it is not the last crisis we are going to have to prepare for and lead through in the months and years ahead. Examples include things like more pandemics, economic meltdowns like the banking crisis in 2008/9 or runaway inflation, natural disasters like hurricanes, forest fires, tornados and floods, business disasters that could be everything from a local flood or fire to an online attack from hackers or ransomeware. Did you know that over 90% of businesses that experience ransomware never recover to pre ransomware levels? Finally, are you prepared for personal disasters or tragedies from accidents to sudden illnesses for you, key staff or family members? Now I am not going through this list as a scare tactic – it is simply a reality that as a business owner you must be prepared for. Taking the ostrich approach and keeping your head in the sand saying la la la la la is not going to cut it when or if any of these ever happen to you.
I know many of you are already thinking or even saying out loud “I do not have time for that – I am too busy just trying to keep my business going” What this means is all the investments you have made in your business suggests you bought yourself a job – now is not the time to get into this but as long as you spend all your time IN the business without committing to time ON the business your long term success could be significantly limited.
Perhaps your business has grown during COVID – that is awesome but be honest. Was that because you had planned and prepared for this type of thing or took action very early to adjust and adapt or is it simply a fortunate circumstance?
So who am I and why am I asking for you to listen to what I have to say. I am an Army Veteran with over 25 years of Regular and Reserve force service. I also have over 30 years of business experience with an emphasis on Sales and Marketing and have worked at the Executive levels for both private and public companies. I have also been self employed and am a published author. Most importantly I am a husband of almost 40 years, a Father of 2 great sons and grandfather to soon to be 4.
Here is some great news. Just in the US there are over 7.2 Million small businesses and 98% of them have fewer than 100 full time employees. The bad news is 90% of them will fail within 10 years so if your business is older than that congratulations because you have beaten the odds! By the way these are pre-COVID numbers. Digging a bit deeper into why so many fail it, really comes down to 4 very hard numbers. 78% lack a solid plan. I am constantly shocked at how few businesses I work with have no plans in place at all – they just sort of wing it on the fly.
73% of business owners are just too optimistic about their sales numbers. Most owners overestimate what they can do in the next 6 to 12 months and underestimate what they can do in the next 3-5 years. The key is having in place the plans and the financial ‘runway’ to get to the 3-5 years.
77% of businesses do not price their products or services properly to maximize their gross margins. I have always taught that if the only conversation you are having is about price you are probably having the wrong conversation and maybe with the wrong person.
And finally and this one really hits home. 70% of people do not ask for help or when they do they ask the wrong person or people. As an example, if you want job advice don’t ask someone who is either un or underemployed.
The former president of Harvard said this ‘if you think education is expensive, try ignorance'.
Ok so let’s change gears and speak directly about what to do when facing a crisis like the COVID 19 pandemic. I coined this phrase way back in 1988 while on a one year technical project management course with the British Army. They were implementing a new project management system and we were constantly told that old mantra “if you cannot measure it you cannot measure it”. In response I came up with Management is the Science of Reaction, Leadership is the Art of Action.
So what about the crisis. You have 3 options, namely you can Freeze and Fail, you can Fumble and Maybe Survive or you can Fight and Thrive. For the rest of this presentation I am going to assume the first two are non starters and focus entirely on the decision to Fight and Thrive.
This is really important. You do not have to like this but you really must accept it. The new norm will not be the old norm. Too many people and owners are saying things like when things get back to normal like it used to be…stop thinking that. In some rare cases the new normal might be like the old normal but overall the new normal will be completely different. Your #1 priority should be to try to figure out what YOUR new normal will look like and get in front of it now..
Let’s start with some Immediate Actions you should take. First you need to start with your Mindset and I will go into this in more detail in a minute. You need to Set your Focus. You need to Stay in the Game. Even if you have to slow some things down, you cannot go to zero as the odds are you will not come back at all. And finally, as I have already talked about you need to Seek Help.
As to Mindset here are 3 key things to consider. Be Decisive and not Impulsive. In order words Act – do not React. This really ties directly into the difference between Managing and Leading. You need to be the Leader, especially if you have employees. You must also have an Abundance and not a Scarcity mindset. What does that mean? Look at the first 4 letters of scarcity – add an e and d and you get Scared. It’s ok to be nervous, it’s ok to be uncomfortable but it is not ok to be scared. Fear is contagious and spreads like wildfire but guess what – so is confidence and belief.
Here’s an example I like to give about this. In the peak summer months of July and August it is typical that 25% of all people are on vacation at any given time. Many of my salespeople would say everyone is on vacation and I just cannot get anything done. That is a scarcity mindset. The abundance mindset says 75% of the people are there and I just need to work a bit harder to figure out who is that I can sell to.
As a leader what are some critical things to consider? First of all, remember that indecision leads directly to paralysis. In the absence of clear and concise direction most people vacillate and do nothing. Indecision is the root cause of procrastination.
You must have empathy and reassure both your employees and your customers. Pretending the crisis is not happening is not the right approach – I will come back to this in a few minutes. Only make promises you can keep. Remember the old adage to Underpromise and overdeliver. Finally, you need to make the tough decisions now or as soon as possible. Putting off the inevitable only makes the problem worse.
Let’s get back to the idea of seeking help. I know you have all heard this before – Pride cometh before a fall. Put your ego in your back pocket or leave it at home or in the car. Nobody is an expert in everything and you need to have the best advice possible to make the good decisions. Information is free – just ask Google. A cautionary note though is to remember that when something is free it is often regarded as having no value. That is not always true – this presentation is free and I sure hope you find it offers value. What you have to do is make sure the free info you are getting is from a credible and respected source.
Really beware of opinions. Everyone has one and often their opinion is based on everything but the facts and a detailed knowledge of the subject. If you need advice on marketing don’t ask someone who has spent their whole career as an accountant – ask the accountant for financial advice..
When you seek help make sure you look for a return on that investment. Education is not an expense, it is an investment and deserves an ROI. Is there any type of guarantee? Far too often you will hear ‘I can do that – I have done it dozens of times’. My advice is to proverbially be from Missouri – the Show Me State. Ask them prove it either with references or with a guarantee or both..
Next I want to talk about the importance of planning. One of the reasons far too many business owners do not have comprehensive plans in place for a crisis or in some cases even day to day business is because they do not know how to prepare a plan. In a minute I am going to walk you through a planning process that is simple yet can address any situation you might face. This is different from pure ‘financial’ planning which is in many ways just about numbers BUT what feeds where those numbers come from? So even a good financial plan, whether it is a cash gap plan, revenue and profit plan or break even plan has to be inspired and driven by something more than just numbers.
Before trying to figure out the how, you must first determine the what or the why. To understand this you have to realize that plans are not created in isolation – they are created to support or implement a decision. So what are you trying to decide? That is the WHAT or the WHY. Remember the old adage FOCUS on the WHY and you will figure out the HOW. For a crisis you may simply be trying to decide something like ‘in the event of a major crisis that impacts my ability to maintain my existing customers how do I replace them with new customers?’
If you go online you will find literally hundreds of sites that offer planning tools or processes, some of them highly specific to unique situations or challenges. By all means do your research. What I teach is highly flexible and can be easily scaled to any sized organization or any sized problem. The fundamentals remain the same. In my book Sales Leadership: Distinctions with a Difference I actually provide a real example of working through the process in a lot of detail. In the end planning is part art and part science. It takes hard work and focused efforts, but it can be done.
Here is the power of planning. It forces you to analyze all the options available and that options analysis drives the development of contingencies. I learned a very long time ago that even the best plan does not fully survive the first interaction with the market or a customer or a crisis. This is key - the process of diligently looking at all options and contingencies allows you to quickly pivot to plan b, c, d or z. Taking it to the extreme you can do so called ‘war – gaming’ of your plans to evaluate and gain insight into how and when to make these pivots and how those pivots will address the challenges faced.
So here is the planning framework I learned years ago and has withstood the test of time for literally hundreds of years. To make a decision you must first select your what or why or objective or goal – call it what you want. Once that is clearly defined which means it is specific and unambiguous, you need to determine what are the factors that influence or affect the objective. If your objective is as I noted earlier ‘to replace my existing customers with new customers’ a simple factor could be ‘what is my ideal customer profile’? Another could be where do these potential customers live? How do they buy now?
You need to learn how to ask the question SO WHAT until it drives you nuts. For example if a factor is ‘my ideal customer buys online’ and you ask the question SO WHAT you might conclude
1. I must have an online store. SO WHAT
a. I do not have the skills or staff in place now to create an online store. SO WHAT
i. I must find someone to do this. SO WHAT
Hopefully this simple example gives you the gist of how this plays out. When you get to the point where you can no longer ask SO WHAT you have effectively come to conclusions that flow from one or more factors. These conclusions lead you to options and in this example that could include hiring a new employee or contracting for this work to be done.
Once you have options you have a basis to make a decision and then the plan flows naturally from the whole process. I could and should and probably will do a separate workshop just on planning but the message here is based on the tried and true adage that Most people do not plan to fail – they just fail to plan!
Update - I have completed the workshop on Planning and it is available on my site for $97 but if you email me and ask for it I can send you a link at no cost. Email email@example.com and use the Subject Send me the Planning Link and it will be on the way to you right away.
Crisis leadership is more than doing a single plan. It really
is a series of plans and contingencies and needs to be driven from the top
down. What I mean here is start with a strategic very high level plan. This defines
and forces you to then create a series of tactical plans that can include
things like a Revenue and Profit Plan, a Cash Flow Plan, a Marketing Plan, a
Sales Plan, etc. If you have a team of subordinate leaders reporting to you as the
owner, you can delegate many of these plans to those leaders but they must all
fit into your overarching strategic plan.
Finally you must execute on those plans and when you do you must monitor progress, measure using key performance indicators, adjust as necessary and adapt as required. Putting this all together is the foundation for everything.
Moving on, lets talk about some specific actions you need to take care of as soon as possible. First you need to protect your customer base. You should already know that your best customer is an existing customer and the cost of acquiring new customers can be very high so keep the ones you’ve got. To do that you have to strengthen and solidify your relationships with them. The best way to do that is to actually overcommunicate, even if you do not have a lot of new information to share. You absolutely must acknowledge the reality of the crisis and be empathetic. Falling back on my sales training, this fits perfectly with one of the best ways to overcome objections using the FEEL FELT FOUND approach. When someone offers an objection or concern about your offer you say I know how you feel. When I first saw or heard or learned of this I felt the same way. Rather than disagreeing or being argumentative with them you agree and show empathy. This make them much more open when you finish with when I did my research or whatever let me tell you what I FOUND.
Finally, you need to demonstrate through your communications and relationship building with your customers (or employees too) that you are resilient and you are competent and you will be here for the long term. Nobody wants to follow or trust someone who does not know where they are going or how they are going to get there.
Now that you are working to solidify your base, your next step which can be done in parallel, is to focus on expanding your audience. These are your prospects who may become your next customers. It might sound counter-intuitive but this is more important than revenue growth or expansion at this time. The crisis marketing plan you created before now gets kicked into overdrive. With COVID 19 still raging, advertising costs are way down. Now they have come back a bit as things have started to reopen and get going but they are by no means back to where they were pre COVID. Key decisions you need to make are how much to spend and where or how. Also be prepared, where you can, to offer things at a preferred rate or even for free for first time buyers. You must do this carefully but the objective is to add incredible value and lock those customers and even prospects onto you, so when they can or do open their wallets and increase their spend they do it with you..
In all your communications, whether with paid ads or organically and free on social media, your website and through other marketing initiatives, you should engage your prospects and customers in the conversation THEY are having. This goes back to acknowledging the crisis. If you are in complete denial that it is real or if you are tone deaf to the conversations the majority of your customers are having, then you are not going to be successful. It really is simple. Now to be clear this is about mirroring your tone and messaging and imaging to the conversations your customers are having. Knowing your ideal customer is critical to doing this really well.
Don’t lose sight of this next point. Right now salesperson direct access to your customers and prospects is at an all time low. Perhaps this is not an issue for your business depending on how you sell but it is for the majority of businesses, especially those that depend on business to business sales. Given this you need to make sure you allow your customer to buy on demand or remotely or both and this really means with online tools in most cases. When you cannot put a salesperson in front of a prospect or customer the next best thing is to use video. It is the best storytelling and messaging medium available. You don’t need expensive or fancy production studios – just use your phone! The message and content is way more important than the qualify of the video. This has been proven over and over again..
When you do this remember to not avoid the tricky or delicate stuff that is best done in person, namely handling pricing and competitive issues. This fits into the old saying that you can deliver good news any way you want but you should always deliver bad news (the tricky stuff) in person. It is also much easier to do when you have strong differentiators and a guarantee in place to separate you from the competition.
For this to work you must know your numbers and I don’t just mean your financials. I earlier talked about the need for KPIs or key performance indicators and this is where they come into play. By knowing your numbers you have something to measure and manage to give you the necessary info to adjust and adapt. My advice is to track everything at the beginning – there is no such thing as too much info. Some of it may prove to be less important or relevant but don’t go down the road for weeks only to realize you are missing key data do drive a critical decision.
In a crisis one of the most important numbers you must have is your runway? What is your monthly burn rate, what is your monthly shortfall and how much money do you have in the bank or available through credit to overcome that shortfall and for how long.
Now here is a key tip that most do not understand. You do not have to make huge improvements to all your KPIs to survive. By understanding your business and your numbers did you know by simply incrementally improving 5 standard and key metrics in any business by as little as 10% you can effectively double your net (not gross) profits. Under normal circumstances I ask owners if it would be ok if we took a year to do this but it has and can be done in weeks or months depending on the business and the owner. I call this the Profit Equation and until you have seen it, it really seems far fetched but it is absolutely provable.
If you would like to work through your Profit Equation for your business then let's set that up. Give me a call for an overview of your business and we will walk through the 5 metrics and I will show you how it works. Real math - no smoke and mirrors - most owners are stunned when they realize it is absolutely realistic and achievable.
The last specific action to take in a crisis is really
dependent on the type of business you have. Some industries and businesses have
seen their activity and revenue go through the roof during COVID and the
biggest challenges these business have faced are related to out of control
growth. This can create a unique set of challenges too. Outside of those
businesses, an overwhelming number of businesses have not been as busy as they
would like and their staff have downtime. If this is your business, use this
downtime to do things like improving soft skills with lots of training. Take
the time to master technology. Under COVID the adoption of work from home or
remote technologies has gone through the roof and owners that were highly
resistant to implementing or mastering this technology pre COVD are now fully
As a leader do not ignore the importance of both physical and mental well being for yourself and your family and you team. You need to be in top form and so does your team to operate at a high level, not just during the crisis but when it’s end is in sight and you turn on the afterburners..
I hope I have offered you some valuable information you can immediately put to use in your business. Thank you for your time and attention. You may be asking okay so what is the catch or even better SO WHAT. There is no catch. If you would be interested in what your PROFIT EQUATION would look like and how much of that doubling of net income in what timeline is achievable in your business, then reach out to me for a 15-20 minute introductory call. I work with a proven framework called the 5 Steps to Freedom that over the last 20 years has helped literally thousands of small business owners like you take their businesses to the next level. Within the 5 Step Framework are 22 Silver Bullets that fit into the 3 critical categories of TIME TEAM and MONEY. Flowing from this is the completion of the PROFIT EQUATION. Once you see and understand this and how it impacts your business, you will be in a position to make a decision about whether business coaching is for you. Remember you really need to SEEK HELP so the real question is whether I can be that help or not. To book a 15 minute call go to takeactionresults.com/15-minute or email firstname.lastname@example.org
Regardless of your decision to connect with me
or not I want to wish you the best of success.