Be bold in the face of fear

Instead of shrinking your way out of a crisis, what if you decided to grow and innovate your way back to sustainability

With so many companies under extreme financial pressure as a result of the current high levels of uncertainty - many are considering cutting costs considerably, and trying to preserve whatever cash they might have.

This is an attempt to try prolong survival in the face of a crisis in which nobody has any control.

Tactics to cut costs include retrenching staff, delaying or cancelling the payment of suppliers and key partners, eliminating all spending on promotional activity and postponing all projects not deemed essential for the survival of the business.

A short-term cost cutting rampage by company leaders is totally understandable.

A recent PWC survey suggests that a third of US CFOs will resort to retrenchments and other extreme measure to preserve cash reserves.

Source: PWC

But instead of shrinking your way out of a crisis (which you know all of your competitions are going to do) what if you decided to grow and innovate your way back to sustainability in anticipation for the post-crisis era?

Opening up the floor to a broad audience

What if instead of laying off staff, you clearly communicated the real task at hand and put a challenge to all of your employees and business partners to come up with new and innovative ways to survive.

What if you asked everyone to share the load of the challenge?

A personal example

By example, I have a client who is a small international retailer - who has a great brand, but the business itself was running into trouble because of low levels of growth and far too much micro-managing on the part of the CEO.

Through a process of strategy consultation and one-on-one coaching, the founder of the business decided to experiment with the idea of handing over far more of the decision-making and operational execution to her team.

Against her instinct not to do so, she asked them to step up and take responsibility for their own futures as well as that of the business.

The result, is that during the lockdown, the business has enjoyed two of their best financial months in the history of their existence; her team have taken it on themselves to hustle their way towards new growth and global opportunities that never would have been realised had she not taken the leap of faith not to immediately retrench everyone, but to rather use the crisis as leverage for new growth

And all of this while she has personally worked less than she ever has.

It's not to say that there is never a good reason to downsize a company in times of extreme crisis, but there a loads of experiments and creative solutions to explore first, long before you resort to putting a 'retrenchment gun' to the head of your organisation.

The important thing to keep in mind is that your competition will most certainly be cutting back and reducing their capacity to deliver a quality product as a knee-jerk reaction.

This may then be the most opportune time to go against the grain and instead of cutting back, look and how you can rather drive forward.

By doing the opposite, you may just be doing what Warren Buffett always suggests when it comes to successful investing; "Be fearful when others are greedy, and greedy when others are fearful"