Decision making without looking into a crystal ball – to see the correct choice ahead – is hard to perform well, long-termly.
Entrepreneurs are challenged most when it comes to start and run a new biz idea. In the first 1-2 years things go up and down. The decisions matter most!
In the new INC. online magazine I was just reading the article “DAMAGE CONTROL”, supported by a picture of a huge red fire-extinguisher on page 22. Making choices which deliver negative news is the hardest…..
I choose to give you 2 out of 4 tips, if you´re Entrepreneur:
1) Be collaborative and act transparent:
Announcing layoffs is like dropping an unannounced bomb. As an Entrepreneur things might change quickly after a few months and you need to adjust the internal structure. Cash-flow problems and reducing benefits are just some choices an Entrepreneur has to face.
- Before you drop a bomb, do not run away from the situation. It would make it worse!
- Before you sit down to think about cuts by yourself …..
Maybe follow the way of Naomi Poe, Founder & CEO of Better Batter. She gathered her employees and showed the financials. Next, she invited them all to choose what to do, when speaking with her 5 employees. They all decided about a solution which fits them all and they searched for many cuts: they found items like coffee and health insurance (be careful with that one). She as the CEO accepted a big pay cut herself and was able to keep all 5 employees at Better Batter. By now, this openness paid off in loyalty and productivity.
Collaborative Leadership is ideal for Entrepreneurs. It shows that building a business needs some survival strategies and a certain openness is one big part of it. If the CEO offers the responsibility to the team it is no bomb you´re dropping. It is an act which is only necessary in negative situations which are forced on you like immediate cut-backs.
The result was they toughended up to get through it. New companies force you to decide between your success, your friendships & family and your reputation.
2) When you HAVE TO order layoffs:
When you have no choice but to announce layoffs in your new company as a survival strategy then follow these 3 rules!
1. Do them all at once! Speak to all concerned employees and tell them the choice you had to make. Dragging things out will destroy morale.
2. It´s better to cut too much than to cut too little. Avoid repeating the process, it might look incompetent if you have to do it within a short period of time.
3. Make sure you communicate that the result saves the jobs of the remaining employees. Be clear and announce the lay-off as a one-time emergency act. Make sure the remaining employees have a secure position now, and tell them.
Building a thriving business is one of the hardest things and in the past it took many entrepreneurs 3-5 years before the business was stable. Today it can be different but this time will force a lot of decision making from you – be prepared! Stay flexible and focus on your goals. Be open when necessary, be collaborative to keep up the productivity and communicate each plan.
BE A DECISION MAKER. BE OUTSTANDING.
rita jaskolla – Leadership Architect –