In environments of uncertainty, we get scared and tend to shy away from bad news. If you need proof, watch the most recent?Hidden Brain podcast?on how we avoid mistakes. We don't want the "data" to reflect something back to us that suggests failure. We think that "failure" is us vs. failure of an initiative, a project or a business decision. By not embracing reality and dealing with it, we only exacerbate the problem. In fact, the problem is not so much managing finances as it is managing ourselves. How we react around the facts can dictate the ease of resolution. I have been thinking a lot about this lately for our clients and want to share 5 ways that you can better manage yourself (I mean your finances) in periods of uncertainty:
- Stay in Your GZ (Genius Zone).?What this means is that it doesn't serve most business owners to be in the details of their financial analysis. Why? Because finance tends to be a play not to lose orientation whereas business ownership is a play to win headspace. Bouncing between these two drains energy. Find someone else to do your data analysis work and then spend time interpreting it with them and making strategic decisions.
- If it's not a full body YES, it's a NO.?You make decisions from some combo of your head, heart, and gut. It's amazing how often we rationalize bad decisions when our gut is screaming something else. Don't ignore it. This is especially true around personnel decisions. Integrity is alignment of your head, heart, and gut. If you're not full body in your decision, just say no.
- You can re-hire.?This is a tough one but sometimes you have to make the difficult decision to reduce your workforce. Just because you let go of a function, doesn't mean it's forever. You can re-hire. The risk is that you keep paying for this function without a clear return, hoping for a turnaround and that gets very expensive. Get back out in the market to hire when the time is right.
- Know where you are in the product lifecycle.?Credit to my friend, Lex Sisney, for this.?Are you in the nail it phase of the product or the scale it phase??Are you incurring costs as if you're scaling but you still haven't fully nailed it yet (defined as product-market fit with customers who refer you)? Often times companies face plant because they scale it before they nail it and that's very expensive. Check yourself.
- Your investors and board need your best thinking.?Too often we want others to tell us what to do when things are tough ("Just give me the answer!") but don't bank on it. You have all the information you need and now you have the opportunity to showcase your best thinking and recommendations. Lead with clear options when making tough decisions. Waiting for others to tell you how to run your business may be short-term relief but won't address the root cause of problems.
Take these in "Stride" in August and consider how managing your finances is more of a reflection of how you might just manage yourself!
If you want to chat, please reach out to us at?[email protected]!
