So you’ve re-forecast a dozen times, had multiple board Zoom calls, sliced the forecast all over again, made painful cuts, and said goodbye to loyal employees.
This has been a horrible couple of weeks on so many levels.
Now it’s time to move past the pain and begin operating the company again.
Accept the new reality. Conditions are dismal, we don’t know when this will end, cash is tight, employees are nervous (as are you), and the future just doesn’t look quite so bright anymore.
So let’s get started. First and foremost, you’ve got to get your remaining employees refocused and re-energized. Has the mission of the company changed? I’m guessing it hasn’t… just the timing and trajectory has been slowed. So revisit your existing mission/vision presentations and get the team re-oriented to what’s always been your true north. (And if it’s changed, then articulate the new vision.) If the vision that you laid out before still holds, freshen it up and use it to inspire and invigorate. You can never communicate your company’s vision enough (assuming it is solid and motivating) enough. Give the message repeatedly at town halls, all hands, team meetings and one-on-ones. Your employees need to hear it from you.
But this is just one piece of the message that you need to deliver. Your employees want to hear from you on how we’re going to grow out of this mess. So walk them through it, just like you did with your board and investors. Tell them what you expect to happen over the next few months, rest of the year, and into next year. Sure it might not be perfect and your predictions for the future might be way off. But your team wants to hear your thoughts on where the company is going and how it will get there. Show them your plan and give them the confidence that you’ve thought it through. This is not the time to hold back (with employees, the board or investors).
Speaking of teams, remember the important concept of cascading communication. It starts with keeping your executive team and direct reports in the loop and letting them know what’s happening and where we’re going. Then they can help communicate and reinforce the message in their team meetings and one-on-ones. This is super critical in large organizations but the concept still holds even for smaller startups.
Once you’ve got the initial communication going, keep it up. This is a marathon not a sprint. Set up a regular, on-going cadence for communication opportunities and make sure the message is getting out. You cannot over communicate in times of crisis. Remember my analogy about the delayed airplane situation: passengers get infuriated less about the actual details of the flight delay than about not having timely information. We’ve all been in this situation at the airport and you can use this as a lesson for how often and how loud to communicate the direction and the progress to the team.
On that note, you can never host enough team meetings and one-on-ones. Go deeper than you’ve ever gone before. Even if you just sit in on another team lead’s video conf and listen, the team will appreciate that you are there. It’s the virtual equivalent of ‘walking the halls.’ Reach out and listen.
Now let’s talk about your customers…
I’m hearing from most of my CEOs that many customers are asking for pricing or contract relief. Depending on your vertical and pricing model, this may or may not be feasible but you’ll want to think this through to avoid being forced into reactive concessions. This is an opportunity to understand your customer base and to determine ways in which you can really be a partner. Real partners will find solutions to customer problems that also work for you. Here’s an example from one of my companies, a SAAS platform focused on small dental/medical offices. Their customers are generally shutting down and begging to get out of contracts. To help them, the CEO is considering offering a three-month suspension of payments in return for a year or two extension on their contract. Would it be worth it to you to give away a couple months of revenue in order to double your TCV? Of course you’ll have to model this out, but I’m guessing this would be a worthwhile tradeoff for most companies.
Once you’ve arrived at the plan in which you feel confident, consider offering it proactively to all of your customers. Can you get in front of their pain and offer them a compelling solution? Imagine what would happen to your ACV if you could get every one of your customers to sign on for two more years. Would that be worth a couple months of free service? Getting in front of this now with your customers will help you control the message, avoid dreaded churn, and build stronger relationships for life.
Another thought on customers: spend some time analyzing the data to understand who is hurting and who is not. I heard an interesting stat today from a CEO who provides a platform to the ailing restaurant industry: while sit-down and casual dining restaurants are hurting badly, pizza chains are perhaps doing better than ever as they specialize in tasty comfort food delivered to your home. Knowing who is hurting, surviving and thriving across your customer base will help you both in your financial planning and in your customer interactions.
As you talk to your customers, make sure you are offering help and guidance to them. Provide some of your learnings from across your customer set (non-confidential of course) and find out their pain points. Again, by taking some short-term pain on your side, you can be setting yourself up for long-term benefits. Another simple tip: offer up your personal cell phone number to your important customers so they feel like they have an easy executive access point at the company. This is where long-term customer relationships are built.
You’ll note a common theme here: This crisis will end at some point and we will ultimately find our ‘new normal.’ The CEOs that are prepared for this to happen will set the stage along the way and will emerge on the other side stronger and healthier than their competitors. Do not let yourself get captured in the dire emotions of the moment… we will come out of this and your company will be better off if you’ve made a few focused bets along the way. Use this unsettled time to negotiate better vendor contracts, to look for weaker competitors to partner with (or acquire?), to hire outstanding talent, and to possibly even lock down more efficient office space for when times get better.
Finally, and most importantly, take care of yourself and your loved ones. Breath, sleep, eat, exercise, socialize (from a distance). Life goes on and the company needs you to be a strong CEO to manage through the crisis period. You can’t do that if your mind and body aren’t up to the task.
I’ll also reiterate an important point that I made in my earlier note:
Be a good person. Recognize that in these trying times, you have advantages that your employees and your neighbors probably don’t. Listen to them, care for them, and help them work through their issues if you can. While you may be unsettled, remember that your teams, neighbors and your community are too. We’re all in uncharted territory and you can help.
This sucks. It’s no fun managing or living through this crisis. And this is the toughest and loneliest time to be a CEO. But you will get through it and one day life will normalize. For your company, you hold the keys to the strength of its survival. Communicate often to all of your constituents, make the important tradeoffs to set you up for long-term resilience, and be positive about the future. Your company is looking to you to lead.
Be well, be strong, be successful, and please let me know how I can be of help.