“The thing you did to get you there, is the thing that gets you to the next level.”
– Gary Vaynerchuck
So, there we were, dropping fast like one of those rides at an amusement park. What goes up must come down, right?
That is true, but, there are ways to slow the drop and avoid a crash landing. Different situations have different options. We needed to figure out ours. We had to think about that opening quote and assess our situation.
What got us to where we are? We had to look at the good and the bad? What brought us success and what made us vulnerable? Everybody thinks and operates differently. I belong to the group that likes to start with the bird’s eye view, the macro view. Look at the business as a whole, the industry as a whole, and the economy as a whole. Perform a cursory assessment of the current ecosystem within the greater economy. Not a detailed analysis, just where we fit into the current conditions. Make note of the external factors that influenced our current situation then move on.
On to the details; Put the business under the magnifying glass and make a micro assessment of our business and current situation. Search for the causes and conditions that led us to where we are. This is the process that reveals the wrong turns, bad decisions, missed opportunities, etc. Leading to the discussions where the hard questions are asked and the harder answers are heard. These are the meetings where it’s not about blame, but accountability and responsibility. The blame is irrelevant when you’re bleeding profusely. When the damage is done, survival and recovery is number one, blaming just perpetuates the bleeding.
The micro view exposes the major injuries that need to be addressed first. If nothing else, a band aid to stop or slow the bleeding, buy some time so we can really dig in. Remember, bandages only address the wound, not the cause. Bandages are temporary relief; we are looking for the cure. Once the major issues are addressed it’s time to really dig in. So, we grabbed our shovels.
Before we started digging we had to address the major injuries. That usually revolves around saving cash. Our two biggest cash drags are usually production and payroll. We had to lean out and that meant letting some great workers go. This is truly one of the worst parts of being an owner. I can say I have perpetuated our cash problems by waiting too long on more than one occasion because I hate firing good people. We are a small business so our employees are like family, letting them go is very difficult. It’s hard to keep your emotions out of in a culture like ours. I know I need to do it but I am more than an owner, I am a human being. As I have said before, you got to do what you got to do.
On to the digging. We started digging and looking at what was really going on. Fortunately, we knew we were in a vulnerable position before we started to drop. I have shared this before that is why we started investing in our growth. We were expanding our line and improving the products we had and how we marketed them. I will share the details of that in another part. For now, what’s important is that we invested in employees and product development. We knew we needed more eggs in our basket so if one cracked, we would survive. Out target date for release and re-branding was our next major industry trade show. We thought we had more time – we were wrong. Two competitors decided to announce their new products before the trade show. You know the ones I discussed in previous parts; the products that that cracked our one egg.
That is when the bleeding really started and we had to make those tough decisions. After we stopped the major bleeding and did our assessment. The bottom line is stated in the opening quote. We had to get back to basics, and focus on doing the things that brought us success in the first place.
So we dug and dug and stripped everything down to the bare necessities. We did the things we knew worked before and focused on building and replacing the broken parts. Building a better engine, and moving forward.
The real digging goes far beyond the financial statements and deeper than the operations. It taps into the core reason you are in business. It unearths the “why” that can get buried in the day to day or lost in the glamour, the complacency, the frustration, and all the nuances of owning and operating a business. The real dilemma is found within that treasure where the real decisions need to be made.
Stay tuned for Part 12 where I unbury the treasure.