The Stress Test: Leading with Integrity, Even Under Fire
In my time in the IT sector, almost a decade of my experience has consisted of doing “turnaround work” as a sole practitioner. “Turnaround work” is a term used to describe working with distressed companies that are close to insolvency and desperately trying to avoid bankruptcy. Seeing these distressed CEOs taught me a lot about leadership.
My job was to work with the bank and bankruptcy attorneys to help the business owner navigate a situation they were ill-prepared to face. I noticed that there are quite a few ways to get a business into financial trouble. It’s under these conditions, when the owner has everything on the line, that we see leadership play out in real-time.
Under severe stress, a lot of good and bad leadership behavior comes out. It’s important to repeat that few are prepared to go through a business crisis leading toward bankruptcy. Most do not know what it takes to save a company. They are all good people who wanted to run their own business, but most of the time it doesn’t work out, and a large majority of small businesses fail.
Here are some observations in working with those companies, their owners, and their management teams.
Poor Leadership Traits
Regardless of the industry, economy, weather, suppliers, or business cycles, it’s your job to lead the company given all these challenges, because that’s what business leaders do. Every successful business has its own combination of challenges to navigate. So, don’t think the world is uniquely stacked against you. It’s not. It’s stacked against every business.
Thinking that doing more, faster, is the solution
Doing more of what got you in trouble won’t help, so quit doing it. Drilling deeper into detailed reports simply won’t move the needle, especially when you need to move the needle fast. It was amazing to me that the most desperate leaders seemed to spend most of their time in their office looking at spreadsheets. Looking at modified numbers won’t turn the business around.
No decision is a decision
It’s time to be decisive. It’s time to do something different. Imagine that you only have 24-48 hours and get started. Because if you don’t, the bank or another major creditor may make a different decision more in their interests than yours. Don’t get to that point simply because you won’t decide.
People know more than you think
Your banker, accountant, suppliers, customers, staff and even your family. “Ugly doesn’t stay in the boardroom.” People don’t hide stress well. Plus, it can kill you. Literally. So, don’t think you are hiding anything from anybody – it will make it easier to do what needs to be done.
If you don’t communicate, others will make up their own version of the situation, and it will likely be wrong. So, say something: what you plan to do, how you plan to do it, and when you expect results. Be truthful and open. If you tell a supplier you will send a check for $100 dollars on Wednesday, make sure it happens. It seems simple and small, but follow-through is important. Because, as a leader, all you have is your word.
Afraid to ask for help
People really do want to help, so don’t be ashamed to ask for it. The supplier you paid on time, even if it isn’t the full amount, appreciates you maintaining honesty and transparency. This works with bankers, customers, staff, family, and friends. When you do get help, be grateful and appreciative, and communicate that to them.
Good Leadership Traits
Avoid the bad traits above
Truly. Re-read them and think about doing the opposite. It can be as simple as letting someone in or not trying to put on a brave face. Businesses that teeter so close to bankruptcy can be dissolved or saved based on these small decisions.
Figure out a solution or find someone who can
This isn’t something that you prepare for. Even if you have been down before, you likely haven’t been here. So, find someone who has. Don’t be afraid to reach out and discuss the situation. Finding expert advice and having the good sense to listen to it is important, especially when your business is in trouble.
Hopefully, you don’t have to test your mettle against the bottom of the barrel. But, keeping in mind what makes and breaks good leaders can help you thrive in your business. Every company needs decisiveness and honesty, and its best to implement them before you are in the red. Truly successful businesses are founded on the principle of doing what they say they are going to do, and doing it well. Trust me, I have seen enough bad businesses to know when I see a good one.
Bruce Lach is the President of SUCCESS Computer Consulting. If you have read through this article and have questions about leadership, how a business can improve or just general knowledge about the industry, contact us at 763-593-3000