I along with my other co-founder friends are witnessing a very unusual phenomenon of what is known as pandemic and a threat of economic recession at the same time.
If you drill down the history you would notice that whenever we had recessions, it was purely because of underlying economic conditions. This is the first time the threat is largely due to the reasons which are purely not economic and an external factor that is posing a risk to lives (~2% mortality rate) globally.
There was a world before COVID-19 and there is going to be one after. COVID-19 is a black swan moment. We don’t know when a normal situation is going to come. We are speculating, we are hoping. We are even in the process of hoping at what a normal world might look like.
I head a testing services company and it’s been close to 6 years we are in this business. We are growing one client at a time, also carefully hiring who we want by our side. To date we are close to 70 folks and a handful of clients. We created a business plan at the beginning of the year which we were trying to execute and achieve the growth of being a 150 plus company.
Perspective
In this pandemic, the first industry to get impacted is airlines followed by tourism and then we saw the stock market collapsing across the world in panic mode. With the airline industry getting impacted we loose one of our potentially large accounts which we were banking to help us reach 100 people org. Welcome to the world of uncertainty!
For a small services company like us, which largely depends on billing from the client every month to pay salary and maintain expenditures it’s a big blow. We have no previous experience in management and the first thing we decided a month back was that the strategy has to shift from “growth” to “sustain”. Sustenance while paying all our employees, honoring all the tech job offers made.
Priority
Everyone wants to hold on to cash, even the decently funded startups. The first lesson comes from them. Cut down your expenditures, but for a services company, it’s largely the salaries unless you have a bunch of folks in middle management.
Prepare
Revise the strategy of the company which helps you move towards sustenance. Efforts need to go in to create a plan which will help you see through this phase. One of the most important questions is what you must do now to keep the business alive and paying. Realign your focus to minimize risk and attain stability either by balancing the number of clients or by revisiting the profit margin.
The first thing to get hit in the turbulent times is the profit margin. Everyone wants to save for an unknown future which could be worse than the current situation. It’s all about surviving the phase and profit is the last thing that comes to mind.
When you run an org, the larger responsibility is the people who are employed with you, who are dependent on the salary, who have worked tirelessly to grow us till here. We need to take care of them. The strategy needs to factor the most important aspect which is “people”.
My learning in these uncertain times: We don’t need to know everything upfront and we don’t have to pretend that. An org is all about people we love working with and leadership is about going extra miles to take care of these people to accomplish something remarkable.
Happy Reading !!
