6 Tips: Leading through Financial Uncertainty
The depth and breadth of the financial impacts of the coronavirus are unlikely to be known for some time, but we can be relatively certain that everyone from small business owners to multinational corporations are going to be hit hard. This is the first recession I’ve faced as a business owner, however, it’s not the first time I’ve looked down the barrel of a gun (financially or literally).
Last year, just a couple of months after purchasing my company from my former partner, I was working to grow the company while still on shaky financial footing. I committed to investing heavily in people, rebranding, and infrastructure that would increase our long-term value, but I did not give the company much margin for error. We pulled through that situation nicely and going into March our financial position was stronger than ever, but no one knows what to expect given the current macroeconomic situation. I learned a lot about myself through last year’s financial issues and while we don’t know what’s going to happen during the public health crisis, I’m committed to heeding lessons learned.
1. Plan for multiple scenarios.
This ranks at the top of my list because until you have a written plan for how you will deal with a situation, your mind will endlessly ruminate and hypothesize about how you will respond when/if x, y, or z happens. Currently, we’re planning and budgeting for how we’ll respond to 20, 40, and 60 percent losses in revenue. I’m terrified at the prospect of laying off staff and asking them to take pay cuts, but this is a potential reality that cannot be ignored. Prepare for the worst while you are thinking rationally, and be thankful if (in hindsight) it seems like overkill.
2. Step away from work.
The harder I work, the more I realize there is to be done. I feel a lot of pressure to provide leadership during these uncertain times. As a leader, it’s my responsibility to make good decisions, set the right priorities, and support our culture through providing grounding, inspirational leadership. If I don’t get out of the weeds and practice self-care, I’m not going to show up for my team like they need me. My meditation, yoga, diet, and exercise routines are more important than ever. If things do go to hell in a handbasket, at least you’ll have a well calibrated body and mind to deal with it.
3. Practice full transparency.
We believe in “radical candor” at all times, but it’s especially important when the situation is rapidly changing. Our revenue is almost directly correlated with our census. When the census is low, revenue is low. When we struggled last year, I thought that by not directly confronting our low census, I was thinking, “at least the leadership team wouldn’t blame themselves.” I was wrong. Right now, transparency is more important than ever. Our teams deserve accurate, timely updates on the status of the organization.
4. Trust and empower your team.
If you share information effectively, you’re equipping your team with the tools necessary to help you make good decisions. Leverage the other members of your team to help you get through difficult times -- they often have ideas and insights you may not have considered. Arm your team with facts and then give them time and space to be creative.
5. Network within your industry.
We’re all going to struggle with difficult decisions over the coming weeks. Now is a great time to reach out to others in your industry to see how they’re handling things. No matter what happens, being in touch with your industry will help you make better decisions and who knows, maybe there is an opportunity for consolidation. We’ll all need help at some point, and the more you help others, the better you’ll be positioned moving forward. (Plus, it’s just the right thing to do.)
6. Know what you don’t know.
I was a college student during the 2008 Financial Crisis. There is an entire generation of people in the workforce who have never managed, or even worked through a recessionary environment. I am reaching out to mentors and family friends who successfully guided organizations through the last downturn to fill my gaps in knowledge with their wisdom and experience. By staying humble, and knowing what you don’t know, you can stay ahead of the curve.
Questions I’m Asking Myself:
What type of environment am I creating?
What can I learn from this experience?
How can I support others in my field?
What I’m Reading:
The Surrender Experiment - Michael Singer (always a good choice during stressful times)
The Innovator’s DNA - Dyer, Gregensen, Christensen
The Body Keeps the Score - Bessel van der Kolk
What I’m Avoiding:
The 24-hour news cycle. I’m limiting my input to morning and evening news updates.
