- Come to grips with the fact that the ground has
shifted.
Do this quickly. The faster you grab hold of reality, the longer you will have to respond and the more options you will have. Work though whatever anger, frustration, denial you need to, but get over it as fast as you possibly can.
Failing to come to grips with the inevitable cycle of change is probably where most companies fail most frequently. You are now going to have to enter a transition period, from the reality you knew to a reality that is yet to be determined. - Come to grips with the forces that got you where you are today.
- What caused your current situation?
- What else influenced it?
- What did you miss that might have altered it?
- What else might you be missing?
- How long do you think this transition period will last?
- What are the variables that might lengthen or shorten this time frame?
- Define how you want to come out of this transition
period.
For example:
- Do you want to be poised for growth?
- Do you want to be leaner and meaner?
- Do you want to reposition yourself in the marketplace?
- Do you want to position the company for a sale?
- Define your minimal acceptable conditions for making it
through the transition period, and what your priorities will be
during this time.
For instance, your minimal acceptable conditions might be: "We will maintain a breakeven cash flow or better", or "We won't cut any muscle that will inhibit our ability to grow".
Priorities might be ranking cost reduction strategies – from cutting expenses or stopping capital expenditures to voluntary layoffs, pay cuts, and then permanent layoffs. Or they might be to build good processes, become leaner, reduce rework, and so on. - Decide who is in your foxhole.
Going through tough times sucks. Going through these times alone is even worse. Going through tough times uncertain whether you are alone or not is the worst.
For those people you decide are in your foxhole and are going to charge the mountain with you, you have to have their back and drop whatever doubts you may have about them until the mountain is taken.
This doesn't mean you might not argue with them about strategy, approach, etc. early on and occasionally along the way, but you can't be questioning whether or not they get to stay during this time. They are going to need your support to have the courage necessary to do what has to be done. - Meet with this group and discuss (in order) points 1,
5, 2, 3 and 4.
Articulate what is not up for debate. Keep this list to a minimum, but it is imperative to have some things on the list. To lead during this time without a clearly communicated set of intolerables is suicide. - Jointly come to an agreement on points 2, 3 and
4.
Decide, but then sleep on it. Agree not to talk outside the group: that would impede your ability to reverse your decision when you get back together. - Assess your plan for feasibility.
If your plan is unachievable you are setting everybody up for a huge demoralising failure. Decide what your benchmarks are going be during this transition period. Also, determine the trigger points that will initiate further discussions and different actions. - Get back together and do one last gut check on your
decisions.
Remember that the "what" is usually easy; it is the "how" that will make or break long-term success. - Develop your communication plan.
Decide first who needs to be communicated with (employees, customers, suppliers, bank, board, etc.) and where you want to leave each party. - Be a beacon of hope and confidence; above all, be in
touch with and talk about reality.
All eyes will be on leadership looking for safety. Don't promise what you can't do: you will be crucified if you fail to deliver. People can handle the truth, and this includes the words: "I don't know what will happen. All I know is that we are going to face whatever comes our way with ...."
At the same time, you need positive force in your actions and interactions. Demonstrate confidence in yourself and others. Above all, be visible and listen more. - Take the hill together.
- If you have to cut, cut deeper than you think you have
to.
Having to cut a second time is five times more damaging than the first round.
Lessons from experience
- Employees: Realise that their anxiety level is
likely to be at an extreme high and that you therefore need to
focus their attention on what they should be doing. People almost
always want to do the right thing; they often just don't know
what that is.
Give everybody something to focus on (preferably a measure) every day that will tell them if they are moving (as an individual and/or as a group) in the right direction. Your role then becomes to help them help themselves when the results are not heading in the right direction. - Board: Remember, this is the time to use them for help. So many people fear telling the board the tough news, instead of realising what a powerful resource they can be during this time.
- Bank: They are going to need to see an action plan and then see you execute it. Whatever you do, under-promise and over-deliver!
- Customers: Don't forget them. It is so easy to become internally focused during these times and forget who is your reason for existence.
- Suppliers: Work with them. Don't leverage this situation to make short-term gains that you will have to pay for later.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
