When the business is struggling, most business owners I know feel like anything but a leader. They start second-guessing their own vision, and are prone to making snap decisions suggested by someone else, in lieu of their carefully crafted processes and metrics. Entrepreneurs who can keep their cool under fire are the long-term winners I look for as an experienced angel investor.
In fact, the best will probably tell you that entrepreneur struggles are the best leadership teachers in the long run. Sir Richard Branson, who has built hundreds of companies, is quick to note that his trails and failures have taught him the most about leadership, and may even have saved his life in other endeavors. The challenge is to anticipate and meet struggles in a productive way.
Effective leadership in a crisis does require a base level of stability and emotional intelligence, which I believe can be sensed by investors and the people around you, even if you don’t have any prior experience in this area. In addition, there are some practical strategies that I recommend, no matter how much you have previously learned or experienced:
Act quickly when you see the team facing issues. When the business is struggling, you should expect anxiety on the team. Communicate with them immediately on the problem and strategy, rather than assume the less they know, the better off everyone is. You need to avoid emotion, don’t place blame, and be the role model for calm.
Be visible, actively solicit and listen to team feedback. People need to know that it’s safe to express views, both positive and negative. Once you get beyond the negatives, most people have real contributions. Your front-line team can give you direct feedback from customers, such as pricing, quality, or support problems, with suggested solutions.
Seek out advisors who will tell you what you need to know. You will get no real help from people in the organization who tend to tell you what you like to hear, or are always negative. Smart entrepreneurs build relationships with trusted advisors, both inside and outside the company, who can see the big picture and recommend practical changes.
Take time to practice management by walking around. Direct contact with people at every level is the best way to learn, generate trust, get support, and expedite action. Don’t assume that your message to direct subordinates will be passed down the management chain, or that input from the team will get back to you by the same process.
Don’t allow analysis paralysis to keep you from taking action. Encourage decisive action by all key players, and be the role model for what you expect. If everyone is accustomed to fixing problems with confidence, the business will prosper, struggles will occur less frequently, and customers will sense the integrity of an effective team.
Eliminate any implied or actual penalties for missteps. Create a culture that encourages and rewards innovation and progress, with no stigma for failed experiments. Eliminate any contention between internal groups and functional areas, including sales, marketing, and development. Make sure everyone is willing and able to pull their weight.
Negotiate alternatives with external partners and investors. New and existing partnerships can provide new sources of revenue, distribution, and support. Investors and major suppliers may be able to provide additional funding and credit to get you through the hard times. Your initiatives will also cement your own leadership perception.
With these strategies, you can feel like and look like the leader you want to be, even when times are tough and the business is struggling. In all cases, it does require that you put aside your ego, emotion, and pride, to listen carefully to the people who want to help, and don’t hesitate to make the critical decisions you have to make for your company, your team, and your customers.
These efforts will take you back to the reasons for taking on your own business in the first place – having full control of your destiny, being your own boss, and doing what you love. Don’t let the struggles, which come with every business, make you forget that.