How to Manage Personal and Professional Ups and Downs While Managing a Business
Business owners and entrepreneurs are facing uncharted territory and a situation that is unparalleled to anything that the majority of us have seen throughout our lifetimes.
David Johnson, Chicago Booth MBA graduate and founder and managing partner at Abraxas Group, took on how to manage these challenges and uncertainties in his Small Business Bootcamp session last week.
Johnson not only explained the current and projected economic landscape in the US, but provided advice rooted in acceptance, awareness, and preparation on how to best get through the ups and downs that many are facing or will face given the current situation:
The path ahead is a nonlinear one. It is important to realize that one’s path for life and success as a small business owner or entrepreneur is going to have a nonlinear path. While the idea of an uninterrupted ascension up the ladder of success is as an appealing one, it is rarely a reality for most.
Tenacity. It may seem simple, but persistence will be key as a small business for managing the challenges in a downturn. Johnson provided both T Boone Pikens and Charles Bukowski as examples of two individuals in very different fields that in the face of various adversities both found extreme success in spite of the odds.
Clear Your Mind. It is important to think of ways that we can slow down and not get overwhelmed during these changing times, so we can best think clearly, plan how to move forward, and take care of ourselves.
Maintain Perspective. Recognize that small business owners and entrepreneurs are all in this together. While the players, businesses, and capital providers may be the same, the mindset will, and has, changed dramatically. Continue to focus on profitability, cash flow, and cultivate your relationships with current capital providers. In addition, become comfortable with the fact that there are some things we never knew as well as we thought we did, that there are, in fact, unknowns. Parse out these explicit and implicit assumptions: For example, you don’t know what competition may go out of business, so you should assume that you will have competition.
Plan to Win. For Johnson, it strikes him as rare for companies to have strategic planning to win. Far too often companies in crisis try to survive and live day today. However, if you want to survive and get through these times you should embrace versatile strategic planning. We don’t know when the situation will change, but develop a plan now on the premise that it will work as we transition back to normalcy. This is not necessarily an overly formal exercise, but rather a roadmap for you and your business. Put pen to paper and asses the following:
- As a business leader, what do you do yourself?
- How do your stakeholders factor into your business?
- What is your capital availability and how to improve it (maximizing internally generated funds and while minimizing the amount that you need)?
Strategic flexibility. Tactics should follow strategic planning but should never dictate it. It’s important to recognize that success can take multiple forms, understand your risk tolerance, and acknowledge that your path is yours alone. Johnson here quoted Frank Herbert: “Any road followed precisely to its end leads precisely nowhere”.
Putting Your Plan into Action. In order to do so, focus on the things you can control and act decisively, but be willing to change course and employ reporting and analysis to build informational advantages.
Create and Use an Adaptive Framework. A model adaptive framework is: Asses, Observe, Plan, Act, Adapt. Using such a framework allows for cyclical progress. Each revolution allows business leaders to become more insightful and formidable.
The Polsky Center’s virtual Small Business Bootcamp was made possible through a partnership with the Rustandy Center for Social Sector Innovation and the Office of Civic Engagement at the University of Chicago, on behalf of a larger coalition of University groups and partners.
// We will be recapping the Bootcamp all week, but all the sessions were recorded and can be found online, here.
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