Your business has weathered a tough and challenging cycle. Now it’s time to start breaking out of crisis mode. How do you do it?
As with any kind of upheaval, it’s difficult to get past fears born out of a bad experience. A brush with the demise of a business falls into its own traumatic category, with your professional, financial, legal, and personal life seemingly on the line. But how you deal with the aftermath of that tough situation is important, too. Afraid of committing to an expansion or new segment of customers? Lingering resentments over what went wrong and who’s to blame? Unable to lead staffers in a clear direction?
Troy Hazard compares it to what he’s learned from racing cars. The serial entrepreneur, business consultant, and author has been taking classes at tracks for years. But one instructor’s advice resonated with both of his passions. The lesson: Don’t obsess over the first turn, or getting into an accident. Think about what you intend to do to attack the curve that’s two turns ahead, because that’s what will help you win the race.
“The biggest challenge most businesses have now is the hit they took back in 2008,” he says. “There’s such a fear about ‘What if it happens again?’ And the answer is: It’s going to happen again. It’s happened every seven to 10 years for the last 70 years. The problem is we’re so reactive to things that are drama today instead of focusing on a strategy for tomorrow.”
His advice to clients: Take time every day—“walking the dog, even that 15 minutes in the shower”—to think about where you want to be in five years or 10 years, and what changes you might make now to reach that goal.
Jeffrey Kadlic works with companies in the wake of a crisis. His small business private equity fund, Evolution Capital Partners, based in Cleveland, uses a system of five “pillars” to take a company out of what he calls “no man’s land.”
Kadlic’s five steps to getting back to business:
“You can’t have any sense of what you’re doing or where you’re going until you measure where you’re at and what your performance has been,” Kadlic says. Some important questions: Where do you stand compared to your peer group? How profitable are you really?
2. Create a plan
Most companies start with a short-term plan, going out at least a few pay periods to evaluate their cash cycles. Kadlic suggests a 100-day plan, which should be enough time to see tangible results from the changes you’re implementing.
3. Put the right people in the right seats
Kadlic equates it to football: How can you create a roster if you don’t yet have a playbook? Once you know the market you’re about to attack, then it’s time to put the right specialists in your lineup to get it done.
4. Be transparent
This part can be difficult for a small business owner who’s used to making most of the decisions. But to have your key staff understand where they fit in this new plan is essential, Kadlic explains. “Show them the big picture and how they’re contributing to the results as a whole,” he says. He recommends monthly meetings to show where everyone stands in proximity to their goal. “It gives people a sense of ownership in what’s going on,” he adds.
5. Be accountable
Give employees a realistic goal against which they can be measured, he says. It sets expectations for old and new staffers. Plus, if someone isn’t working out as you’re trying to get back on track, those benchmarks make a dismissal less of a surprise to the employee and an easier way to define what a successor will need to do, Kadlic says.
At all of the businesses he’s bought over the years—most of which he’s entered during crisis mode, “because that’s where the opportunity is”—Hazard says he’s implemented not only a routine of not-to-miss Monday morning meetings, but also a “daily huddle” that keeps the focus on what’s down the road. In that 10-minute meet-up, teams from finance to operations come together to answer the question: What are the things you see that are strategic roadblocks for you right now? “It brings up the things that are going to affect the business long-term,” he says, “but it also gives everyone a chance to help overcome these obstacles and collaborate on a solution.”
Hazard likens it to what he’s learned on the racetrack. “It takes the day-to-day issues and turns them into longer-term strategies,” he says. “That’s what changes the culture.”