Making Unpopular Choices

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 –