Questions for Leaders in Difficult Times

How do you behave when your company is in trouble?

I talk to a lot of startup CEOs, and over the past few months I’ve seen folks in a cohort of companies that raised money in 2020/2021 who are now starting to reach the end of that runway. Some companies with incredibly tight fundraising deadlines over the next few months, in the hardest funding environment for over a decade. They are doing the right things - acting early, cutting deep, focusing on fewer things, communicating with their investors and teams, adapting their business to scarce funding environments. But it is tough.

As many navigate how to move from prosperous times to adversity, it makes me think of a quote from the not-very-well-known Roman philosopher Horace: “Adversity reveals genius, prosperity conceals it”. Here are a few questions for folks navigating difficulties, that might help reveal your genius.

How do you prioritize what is most important?

One of the surprising things about coaching is how good advice, in the abstract, can apply across disciplines and domains. The best coaches aren’t looking at the precise tactical issue you face — they are helping you see possibility, formulate the vision and strategy, and stay accountable for making good choices — whatever the domain you are in.

This is why I often think of Aviate / Navigate / Communicate. It’s the mantra for handling emergencies when flying an aircraft. This general advice that the FAA provides on how to prevent aviation accidents is not bad as a primer for CEOs navigating startup challenges:

Aviate, Navigate, Communicate. Three top priorities, but the leader of them all is Aviate. That means to fly the airplane by using the flight controls and flight instruments to direct the airplane’s attitude, airspeed, and altitude. The instruments directly in front of you provide important information about your control of the aircraft. They give you critical information about airspeed, attitude, altitude, vertical speed and rate, magnetic heading, and turns and coordination.

Rounding out the top three is Navigate (figuring out where you are and where you’re going), and Communicate (talking with ATC or someone outside the cockpit). It seems very simple, but it’s easy to forget when you become distracted.

FAA

Of course the metaphor is obvious - See clearly. Make sure the company is heading in the right direction, that no immediate crises are in its path. Set a strategy that will be safe and effective. Communicate.

And it is very easy to forget all three when you become distracted. In a similar way, the advice that the job of a CEO consists of just 3 things is often more helpful than handing someone a thick book: Strategy, team-building, and keeping the company funded.

Have you thought about how you might do these things in relation to time? How you might manage the different responsibilities of a leader over these different time periods:

Day-to-day: How do you ensure the company’s day-to-day operations run smoothly without needing constant intervention from leadership? How do you help ensure there is no daily trauma that stems from company instability? How do you handle day-to-day comms about trivial things, when there is a bomb looming overhead? How do you avoid fear and anger driving your culture?

Week-to-week: How might you make sure, if you are holed up in fundraising hell, that you don’t let weeks go past without the team staying in sync? How do you keep track of cash burn in tighter cycles than normal without spending your whole time on bookkeeping busywork? How do you keep the team in the loop without making everyone worried all the time? How do you keep stakeholders happy without bending to their every whim?

Month-to-month: How do you keep stakeholders in the loop, when the news ain’t good? How do you solicit help and feedback without being beholden to twenty different directional suggestions? How do you set milestones in unpredictable times? How do you manage a stalled product roadmap that is due to lack of funding, and a sales team that needs new features?

Year-to-year: As startup folks who like to do things, it can feel worthless to spend weeks and months on selling what we are doing to people who don’t seem like they care very much. If you have been in an extended period of challenge, how might you create a chance to reset and re-evaluate with all stakeholders? What options might be available to you and the team that you haven’t yet considered? What decisions would a newcomer CEO make that you aren’t prepared to make by yourself? How might you change course?

Over years: How do you manage the fact that many people never have to go through this? If you work in a regular job in a gradually-growing tech company or corporate, the closest corollary to trying to save a company is perhaps going through a severe medical trauma, or saving a difficult relationship, or working with someone who is addicted to a substance. It’s chaotically traumatic.

The addiction analogy is maybe too close-to-the-bone for many startup CEOs. Andrew Huberman is known for saying that “addiction is a progressive narrowing of the things that bring you pleasure”. When you are trying to grow and save a startup, there is a progressive narrowing of the things that you find to be salient and valuable. It’s basically money. Seeing that happen to yourself is unpleasant when you are aware of it, and dangerous when you are not. What resources, techniques, people and strategies do you leverage to stay a sane and healthy individual among this?

How do you protect what is valuable?

When you enter difficult waters with a company, you are trying to preserve the company’s future, especially the original vision. You are trying to do this while preserving the team, assets, stakeholder relationships, legal standing. Navigating crisis forces you to evaluate what is truly valuable — what precisely are you trying to preserve? And it’s easy to get mixed up about what “valuable” means. Is it the money, or your honor? Is it the brand? Is it ‘feeling good’ or doing good? Is it the business model, the product, the customers?

Are you protecting your team’s connection to reality, or protecting a ‘good atmosphere’ in the team? Some leaders struggle with sharing bad news or bad circumstances with their team. There’s clearly a balance between telling everyone every last detail (which can freak people out unnecessarily) and hiding a bad reality. It can be especially challenging for leaders who have extolled the benefits of complete transparency while their company was crushing it, and now have to figure out how to communicate when everything isn’t going so well.

I suggest you always err on the side of transparency, but only with a clear vision and plan. And at the very least, you try to make sure that no one is surprised by anything they find out during or after a significant event. In good times, if a Director is given a promotion to VP, no one should be shocked if their precise compensation was revealed to be X. In bad times, no one should walk in on a Monday morning and find out their whole team was laid off over the weekend. No one should be told bad news over text. Etc.

The more senior people are, the more they are protected by knowledge. They have agency to direct their careers, they have the experience to know what x, y and z mean in their specific situation. The more you share, the more they can help you. They will put more trust in you the more trust you put in them. They have more options — and also it often takes them longer to find the next valuable role.

The more junior or distant people are, the more they can be protected by structures, contracts and financial protection in the form of severance. The more junior or inexperienced people are, the more they can be derailed by information about circumstances that they cannot directly impact — especially if the leader gives them bad news with no plan alongside it. For folks like these, as a leader it is in your power to create structures for them to leave in safe and comfortable ways before things get really bad. For example, you might offer a certain team of people a severance package and opportunity to leave several months before the company might enter a really dire situation. This is not to say you should not communicate the gravity of the situation, but you will find little value in providing information alone.

Who do you talk to, and when? In the book Chasing Daylight, Eugene O'Kelley, a high-powered KPMG CEO is confronted with a terminal illness diagnosis. He applies the same left-brain organizational and logic approach to his death that he did to his career: He makes plans and executes them. One of his strategies as he sickens, is to clearly delineate his interactions and communications with folks that are close to him, versus the hundreds of other people who are part of his life but not his close consorts — imagine a set of concentric circles. He progressively says goodbye to the outer circles while devoting more and more time to his inner circle, of his closest family and friends. This allows him to focus his attention and dwindling energy. The book is heartbreaking but also shows how one person found strategies and proactive ways to feel some modicum of control over an uncontrollable situation. In the same way, are you able to create some logic around how you prioritize your communication, and who you spend your time with? What do you do when the circle gets very small? What do you do when it’s just you?

How might you survey the chaos ahead while maintaining detachment? Back in 2022 when we (thankfully temporarily) had to close down Farm.One, my knowledge of ‘what happens next’ with a company closure and liquidation was limited at best. It was also strikingly clear that as the company’s funds started to dwindle, our ability to engage expensive outside experts became weaker and weaker!

When you are running a startup, you focus mainly on how to achieve success, not the details of what failure might exactly look like. This is probably the right way to approach it - it’s not worth going into a doom loop where you map out every single detail of how to close your company, when you might be putting effort into saving it.

But still, it’s worth learning a little about what it might look like to close your company before you have to do it. I’ve found that this knowledge doesn’t really exist in a good form online, it’s really something you have to talk to people about. Talk to people in the same industry, in the right geography, with similar business structures to yours. Talk to the folks who buy equipment at liquidation. Talk to people who buy and sell businesses for parts. Do at least a little of this while you don’t have to, so that you are forewarned and forearmed as to what that path at least looks like. Get comfortable with what crashes look like, so that you can make a safer, controlled emergency landing.

What’s the smallest-possible crew to keep this ship running? If you needed to get the burn rate down to a microscopic level and keep this company going for several months longer, how might you do it? How might you do it in such a way that you are not incurring debts among this crew, and so that you have a definitive, clear, timebound goal - not just ‘staying alive’?

What is the escape pod? Who’s on it? If the thing is really crashing and burning, who is on that final lifeboat? Where are you going? Friends of mine who have seen their companies collapse have often been able to salvage a tiny, elite crew to extract some valuable nuggets of corporate value from the original company, and create new companies with the backing and blessing of some of their original investors. Have you thought about what this might look like for your company? How might you do this in an honorable way that is blessed by your stakeholders and your team?

How do you proceed with clarity and energy?

The closer the company is to your heart, the more you will pull out all the stops to save it. But there is a distinction between being selfless and forgetting to look after yourself. Protecting your sanity and your personal life is a responsibility of any leader, because it guards your decisions and your behavior among others in the team in the short term, and the reputation of your group in the long term. To do this, it helps to remember that the current challenges you are going through will pass, and while they may damage you, you can do things to protect yourself throughout.

As a leader, how do you give yourself the best chance to stay sane? One dumb, obvious way that helps is to get exercise — every single day, no matter what. This simple advice helped me a lot during some of the worst Farm.One challenges. On really tough days, I would still walk for an hour along the West side of Manhattan, and it gave me a stretch of time just for me where I could listen to a podcast or nothing at all. I did a lot of yoga on the Yoga Studio app, including, ha! “Intermediate” level relaxation yoga which is mainly just stretches that you hold for several minutes at a time. I never made it to the “Advanced” level of relaxation, apparently.

Convincing yourself to move your body is sometimes really tough. But in times when your legs are bouncing around under the desk after you’ve had too much caffeine and 4 zoom calls back to back, and you feel the urge to dive back into the email inbox, hands jittering over the keyboard… that’s a pretty good signal to go out for that walk! How might you give yourself permission as a leader to choose the time for that exercise and protect it firmly?

How might you create the best mental conditions for your difficult days? There are countless ways to get started with a small-scale meditation practice. I recommend leaders go further than this, given the weight of responsibility on their shoulders and the relentlessness of their job. The quote goes something like: Oh Dalai Lama, how are you able to fit in daily meditation with such a busy schedule? The Dalai Lama smiles and replies that on normal days, he meditates for 1 hour in the morning. He smiles again and says that on extremely busy days, he meditates for 2 hours in the morning.

I know, annoying, right?

But what might happen if you can reach the stage with meditation where you feel like you’ve given it a really good shake? Similar to if you were going to learn pottery as an adult, you would probably take a six-week multi-hour class, multiple hours each session, and you would read up on it and watch YouTube videos and TikTok before you felt like you had given it a proper chance. I would say the interesting stuff around meditation starts to happen after that kind of investment of time. Try to get to the point where you start to see some effects about which you had no clue at the start.

More broadly — what would it look like to devote a little time to spiritual practice? Maybe the meditation stuff is not for you but you have other ways of connecting to yourself and the world. If you evaluate “what is worth doing” purely based on if it will improve your performance, rest assured: developing some kind of a spiritual practice will do this. Or put it a more Startup-CEO-way: If you have no spiritual practice whatsoever, you are in a weaker position than folks who do. You do not need to take six weeks off for silent retreat in the Himalayas - what would it look like to make the smallest possible step?

Which friends might you talk to this week? Talking to real people about completely unrelated real-world things can remind you that your company drama is not the entire world. In difficult times, sure, sometimes it’s easier to chat with friends on the phone or one on one, than to go to a big party. Being clear about what subjects are triggering for you right now (money, the economy?) among a tight circle of friends will mean they know how best to hang out with you while boosting your energy. But the important thing is that you connect.

Given that startup drama can extend from months to years, you may look back and be surprised how many relationships you might let wither and die while you are focusing on your startup baby. Not only are these real people who miss you, but they will also be part of your life again after this whole thing is over. Talking to too many VCs and business folks can warp your brain into thinking that people only value you for your work talents, and the only conversations worth having are those that ‘drive things forward’ towards a goal. This is bullshit. People love you, and miss you, and want to talk to you because of you. So go say hi.

Bigger picture, how might you proceed, safe in the knowledge that you are enough? Regardless of what happens to your company. Regardless of whether you made every decision exactly correctly. Regardless of whether you made the perfect strategic choices, or executed flawlessly. How might you navigate these challenges, confident that whatever happens, you will be OK?

I coach CEOs, founders and executives on how to reach their full potential, become great leaders, and scale strong, impactful companies. It works.

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