Written by Joe Prats CEO/COO
Our human instinct is to protect what we have when faced with fear and uncertainty. We rush to protect our loved ones, our family, our resources. We “circle the wagons” to protect what we have and who we treasure.
Business leaders are not exempt from this natural human response to fear and uncertainty. Business leaders will quickly draw up plans to protect company cash, working capital, and future profits. Business leaders “circle the wagons” to protect their board of directors, stockholders, and employees.
As a business owner, I am not immune to the COVID-19 pandemic. I have experienced the same fear and uncertainty. Our business saw revenues decline immediately. Our customers stop giving us orders. Our customers wanted us to reduce our prices and to partner together to get through this crisis.
Days leading up to a partner meeting, I was creating wonderful complex spreadsheets to model the financial impact of potential bad scenarios: 20% revenue lost; 40% revenue lost. How long could we operate in the red? Do we use all our working capital? How much working capital do we reserve for long term debt?
I modeled cash flow and profitability; monthly fixed obligations; critical staff needed. I developed trigger events that would tell us when we would need to make crucial decisions. During the partner meeting, we discussed the scenarios and implications. Fear and uncertainty caused us to “circle the wagons” to protect what we had.
Like so many of you, I am watching the news channels and reading stories online. These stories talk about businesses closing their doors, possibly permanently, employee layoffs and furloughs; employees who are forced to take a reduction in pay, etc.
I identified with the challenges fellow business owners or leaders faced. Sprinkled in from time to time, I noticed a different story—stories illustrating a different way of handling fear and uncertainty. A different theme arose from these stories. These stories demonstrate an elevated leadership view beyond the normal reaction to fear and uncertainty.
- A business owner will continue to pay his employees who had no work but asked them to perform community service in exchange for each paid hour.
- A school district that asked school bus drivers to help with janitorial services to get the schools ready for when students return.
These examples remind me that when each of us choose to sacrifice the bottom line a bit for the welfare of others in a crisis, it is the right thing to do. If one has resources to help others, then the right thing to do is to demonstrate social responsibility for the good of others.
Other stories demonstrate hope and new opportunities. Some leaders expect a bounce in their business services when their business reopens. Some believe that new business methods will be incorporated that before were perceived as not preferred or not accepted, primarily because we have been forced to work so differently while we stay home and perform social distancing. These leader’s mindsets indicate they are looking past the crisis. They have a growth mindset. This mindset creates a feeling of hope and a sense of social responsibility. This mindset is refreshing, forward thinking, and needed now more than ever. This leadership mindset can benefit any organization and its leaders facing fear and uncertainty.
Joe Prats is Chief Executive Office for Alliance Professional Resources LLC. Headquartered in Portland, Oregon, Alliance Professional Resources operates a portfolio of Contingent Workplace Staffing companies. Joe has been a business owner for almost 20 years, starting his first company in the middle of the Internet Dot-com Bust. Since then, he has navigated his companies through the 911 crisis, 2008 Great Recession and now COVID-19. His leadership experience includes service on non-profit boards, foundation boards and school district boards. He has had a front row seat as a leader on a non-profit board, on a public school district board and as a business owner dealing with the COVID-19 issues confronting our society.
Connect with Joe here: https://www.linkedin.com/in/joe-prats-25b4a0/
