{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Wartime CEO","description":"As the COVID-19 crisis unfolds, a lot of businesses find themselves in a tough spot. Studies and surveys tell us that a significant number of small businesses\u2014as many as half\u2014have less than a month of cash on hand. It\u2019s frightening to think that if things don\u2019t go right for 30 days, most businesses are in serious trouble. People\u2019s instinct is to think: \u201cIt\u2019s too late now. There\u2019s nothing I can do.\u201d But there are things you can do now to protect your business and employees (and their families) while supporting your customers. If you\u2019re in a business\u2014especially one in which a lot of people depend on you\u2014recognize your responsibility and act. Don\u2019t assume this is the bottom First, understand that you don\u2019t really know how bad it could get\u2014because it could get much worse. If you haven\u2019t yet built a cash buffer, it\u2019s not too late to start. It may be time to cut costs and preserve cash. Your obligation as a leader is to imagine what the future might look like and to put yourself in a position to act. Look toward the horizon and try to get ahead of it. Adopt a \u2018wartime CEO\u2019 mindset A crisis like this requires you to adopt a wartime CEO mindset, as Ben Horowitz writes in \u201cThe Hard Thing About Hard Things.\u201d You might have been doing a great job running your business for the past decade during peacetime. But now it\u2019s wartime, and something different is required of you. Different rules apply.  \u201cPeacetime\u201d in business means the company has an advantage over the competition, the market is growing, and the company can focus on expanding the market and reinforcing its strengths.  \u201cWartime\u201d means a company is fending off an imminent, existential threat\u2014a competitor, a change in technology, a macro-economic change, or a pandemic that demands something different from you. Scenario planning Ask yourself, \u201cWhat if things get worse?\u201d If you have 30 days of cash left and revenue is cut in half, then you have 60 days left. What can you do now to make it more likely that revenue will return? Alternatively, if revenue isn\u2019t likely to return, what can you do now to put yourself in a better position to survive? You might have to pivot Restaurants were forced to close and dealt with it by pivoting to take-out. Owners of distilleries that converted to producing hand sanitizer look like heroes. When you get in a crisis situation, you\u2019re always better off if you\u2019re nimble enough to do things that support your customers. This is an opportunity to distinguish your company  People will remember how you behaved when things got tough. It can have great long-term implications for your business. Bad behavior is always remembered, so be sensitive to your customers. You could get focused on an acute problem your customers are facing. Talk to your employees like adults A wartime CEO has to be very effective at communicating. When there is an existential threat to the business, your employees will naturally worry. Tell them what\u2019s happening and what it means based on what you know\u2014and be open about the things you don\u2019t know. Let people know you have a plan for how you\u2019re going to handle it. If people believe in you, they will accept hard choices The faith employees have in the organization and you in your leadership role are critical to pulling an organization through a difficult time. If people believe in you, they\u2019ll accept a disruption of their normal work; they\u2019ll volunteer to make sacrifices.  Internal challenges are not your customer\u2019s problem For the most part, internal challenges of an organization are not your customers\u2019 problem. Your customers care about their own problems. So limit what you make public. If you tell your customers and suppliers that you\u2019re facing a cash-flow problem, they don\u2019t know if you\u2019re being totally transparent. If it ends up being a one-off thing, that could forever change their impression of you. Entrepreneurs step up in hard times A crisis like this helps to highlight one of the reasons I love entrepreneurs. They all choose to take responsibility for somebody else\u2019s family. People talk about becoming a founder like it\u2019s this big aspirational thing, but the reality is you\u2019re picking up a really heavy rock and carrying it on your shoulders. You\u2019re either cut out for that or you\u2019re not. Links: \u201cThe Hard Thing About Hard Things,\u201d by Ben Horowitz Full show notes: https:\/\/smith.substack.com\/p\/wartime-ceo-d71 ","author_name":"Smith Sense","author_url":"http:\/\/smithsense.com","html":"