Bad things are going to happen in business. They just are. So we as entrepreneurs have to learn how to deal with them. Often, the difference between having a mediocre organization and an extraordinary one comes down to how we act during these unexpected, challenging times. Your ability to respond, or what I like to call your “response(ability),” will dictate your future success in business. Here are a few tips for how to improve that response.
This is probably the hardest thing to do during challenging times. The first few moments of a crisis are critical, and it’s important that you stay calm. Personally, I like to step away for a minute or two so that I can be alone with my thoughts. In that quiet moment, I allow myself to take a second to panic and feel the weight of everything going on. If you’re able to step away and get some space, collect yourself and prepare to deal with the situation with clear thoughts. Get to a place in your mind where you stop thinking about the crisis, and instead focus all your energy on solution-based thinking.
For example, ask questions such as, “How can we fix this? or “If someone else were in this situation, what would I tell them to do?” The ability to focus on solutions instead of problems is arguably the single most important skill a leader needs to have. However, that will only happen if you stay calm. Remember, you’re not being helpful to anyone if you are freaking out. Your team looks to you to set the tone as to how they should respond.
Assess The Risk
Take time to figure out the worst-case scenario. Identifying this will help set the course for your next steps. I remember the day we found out that one of our largest vendors, who owed us around $200,000, had a budget freeze and weren’t going to be able to pay our invoice. My first reaction was panic, because we needed that income in order to pay upcoming expenses. However, after I took time to calm down and assess the situation, I made a few phone calls. It turned out that payment was just 60 days late. Once I started dealing with the problem in those terms, I was able to find a bridge round of funding to pay expenses until I received that invoice.
Oftentimes, entrepreneurs let their minds go wild with every possible bad thing that could happen in the world. There are probably simple steps you can take to fix the problem you are in. Assessing the risk will allow you to remain rational about the decisions you’re going to have to make. Remember, no matter how bad things look, there are people who have been in worse situations and have found a way to respond that allowed them to continue with their success. You can too.
Consult Your Board
A board of directors is a group of three to five people with whom you can consult whenever you’re making a big life or business decision. Whenever you’re in a situation that is seemingly impossible to solve, reach out to your board. Your board has a vested interest in your success. They are removed from the situation, so their objectivity allows them to give insight you might not be able to see in your moment of crisis. Tell your board exactly what’s going on. For me, being able to do this during critical moments has been incredibly helpful. For example, in the situation I mentioned above, a friend of one of my board members was able to come in and provide the bridge funding. Their outside perspective can at least spark a new way of thinking about the problem, which might be the thing that leads to a solution. Calling on your board is always a good response.
Consult Your Team
As leaders and entrepreneurs, it’s easy to feel as if you need to have all the answers. Great leaders know that other members of their team have valuable perspectives, especially during tough times. Ask your team what they think the best way to solve the problem is. Sometimes we feel like because everyone is relying on us, we have to come up with an answer. But your team can give you different points of view. As a matter of fact, the best way to find out what your team is made of is to see how they respond during a time of adversity. Your response(ability) can grow if you allow more people to become involved.
The cavalry is not coming. Superman is not going to save the day. It’s your response(ability) to solve this problem. So, after consulting your board and your team, decide to respond. The big secret in life is that there is no big secret. You just have to do something about the situation that you’re in. Sometimes what you do will work, and sometimes it won’t, but no one is going to do it for you. When you get hit in business, remember to stay calm, assess the risk, consult your board, consult your team and be honest so that you can respond appropriately.