This time last year, I faced a painful thud. Our business, that I thought had survived and recovered well from an earlier crisis in the middle part of the decade (you can gain some insights about that painful decline in this blog’s “about” page), actually had reached the point of desperation. Without drastic, immediate and brutal changes, we would collapse.
Yes, the recession caused many of our problems. But how could I have been so dumb to increase my break-even point, while allowing inconsistencies and unfairness within the business, just as the economy nose-dived? We had grossly overpaid writers doing the same work as others earning virtually nothing. The person keeping our books, having taken a big cut in the previous crisis, observed that we were unable to pay the bills (including hers), even as we raised pay and guarantees for some sales reps, who were starting to pad their expense accounts without unnecessary extras. Without a seeming care in the world, I took business trips which depleted the already-scarce cash even more.
And I continued moving forward with expansion plans, adding even more burden to the payroll.
Thankfully, like the time my mother doused me with a pot of cold water when I dared (as a teenager) to bring a motorcycle home, I got the message — just in time. And here I applied the techniques and methods needed to bring things back on track.
Survival
One fundamental of survival is to do what you need to do, when you need to do it. This means hard and difficult decisions. We started with the easy stuff, a thorough look at embedded expenses which were doing us no good. We were paying for phones we weren’t using, and some freelance writers were earning $300 for stories we could have written for $100. But then the more challenging choices had to be made including laying off some employees who might, under more relaxed conditions, have received a second or third chance (and one who really had done his work well throughout, but we simply couldn’t afford any more.)
The toughest survival issues involved our bookkeeper, who we decided to ask to leave after finding the cash to pay a five-figure debt to her employer. We needed to find a replacement and that person left after three months. In fact, one of our biggest challenges proved to be the loss of some key employees we didn’t want to leave, and the sudden loss (for reasons not our or the employees’ fault) of productivity and effectiveness by two of our three salespeople. I needed to make imperfect, fast, and painful decisions, keeping the public front of the business in order while pushing emergency buttons and making sometimes brutal decisions.
Creativity
The rather overworked (and perhaps untested) phrase: “Crisis equals opportunity”, has implications in creative solutions and surprising insights. We discovered new markets outside our traditional framework and focus. We rehired an excellent salesperson with a unique contract that allows him to express his entrepreneurial values with his own residential contracting business, without conflicting with our operations or our advertising clients (and gives me a real-world insight into the marketing challenges of construction sub-trades that we can’t see directly as publishers.) We also discovered approaches to re-frame our primarily print publications into exciting online ventures, specifically the Design and Construction Report.
Values
I can’t say we lived by all our values, all the time. Sometimes values are threatened when you are in survival mode, and sometimes they are lost in the lazy corruption of good times. On the other hand, the business’s core values held up: We focused despite painful cuts on maintaining and improving our product’s quality, communication, client service, and even in dismissing employees sought ways to lessen the burden on them without draining our budgets. At our (abbreviated and slimmed down) annual planning meeting, we decided to review the company’s mission statement: “Breaking new ground, building new bonds, and delivering news you can use every day.” In the end, we decided it really reflected our business — but we would remind ourselves of it every day by including it on our weekly reports, email signatures and marketing materials.
Systems
I first learned the strengths (and weaknesses) of systems from Michael Gerber’s The E-myth Contractor
However, in the end, the reason we have been able to recover is the fact that, despite some chaos and much change, our business has some simple, effective, and in some cases, near-unique systems to solve problems and keep things moving forward. Certainly our hiring selection and staffing systems worked reasonably well. We made a few mishires, but ultimately have restored our core operations, and while we had some glitches, the new employees have been able to connect with and follow procedures in our operations manual.
In advocating a systems approach, I however remain skeptical of simple, fast, and off-the-shelf systems sold by a variety of consultants because I think the key to business success is to create your own systems where they count the most, and often to meld several processes from other providers to create your own unique model. You still need to listen to your own inner spirit (values) and be creative.