Last spring, the Federal Government rolled out the second round of the Paycheck Protection Program, otherwise known as the “PPP”. The first round, fraught with challenges, left a bad taste in many small business owners’ mouths as the funding dried up before they could become approved and/or file their application. That was even before the fallout on the seemingly larger companies that were awarded funding, squeezing out the main street businesses that the stimulus package was touted to assist. Therefore, I was mildly surprised when more of my clients and other business owners started reporting this past week, they had started receiving notice that their applications had been processed and approved.
I was pleased for these businesses and yet, a little concerned. Not because of the large expenditures being thrown onto our national debt (yes, it makes me nervous, but a quick literature search tells me that there are very few, if any, professional economists that think these programs are a bad idea right now in the wake of our current uncertainty.)
My concern was really that for many, going after and grabbing their share of the PPP has become a singular focus. And it’s not surprising to understand why. Forgivable and/or low-cost loans to keep you afloat? Expedited loan processing? Able to keep your employees on payroll while you figure things out? The great recession is not a too distant memory for many. Additionally, we were bombarded with emails and advertising from business newsletters, CPA and advisory firms, trade organizations and economic development organizations with “how to guides”, “webinars” and offers to assist. Overnight, the PPP became a cottage industry and many of us became caught up in the frenzy.
This all became even more clear to me after I listened to one of my favorite podcasts – Masters of Scale with Reid Hoffman. Over the past month, Masters of Scale has launched a “Rapid Response” version of its podcasts to better reflect what businesses and leaders are doing to address today’s challenges. This episode was entitled, “A Crisis Leadership Lesson” with General Stanley McChrystal, former leader of Joint Special Operations Command in Iraq and Afghanistan. McChrystal reflected on crisis leadership and what leaders need to do to lead their businesses through our current challenges and one passage stood out to me:
“You start to say, ‘Well, okay we got this.’ The reality is that the economy’s in this hiccup right now and as soon as it starts to sort itself out, certain organizations are going to sprint ahead because they’ve been figuring it out. They’ve been going to school on this, they’ve been preparing for a change to market, and they are going to come out of the starting gates. Some are going to try to go back to status quo and they are going to be absolutely crushed, because they’re going to go back to a time that no longer exists. Others are going to dog-paddle in circles kind of where they are now trying to figure out what works and they will be left at the starting gates. I think that organizations have got to understand now that there’s a temptation to focus on the here and now, the crisis. The crisis is true, but you still have to do all of the long-term things. You still got to push the organization forward for the future, and I think people have got to put senior leader eyeballs and the focus of the organization on that kind of forward movement.”
We all need to still have to do all of the long-term things. That’s right, the long-term things – the future that is hopefully post-Covid 19 and perhaps three-five years from now and longer. We need a plan that our teams can execute to support our customers to generate cash (short or long term) to keep the economic engine of our businesses going and build for a future that is probably the most unknown in most of our lifetimes. Having the PPP without a firm strategy and the ability to execute has the potential to give us a sense of relief and delay of the urgency so often needed to execute brave new strategies and create ingenious products and businesses.
So how do you overcome this:
1. Create a sense of urgency. This is the number one tenet in Dr. John Kotter’s key to facilitating change. Put the words and leadership around what your company needs to do – this week, this month, this year. Be prepared for a marathon and not a sprint. Your people are most likely weary, in fact, one study suggest that two thirds of Americans have felt lonely depressed, etc. in the last week. This includes people who are working – not just those who have been fired, furloughed or laid off.
2. Dream Big. Imagine a life and a business that comes out on the other side that looks different than the one you had before. This may be the easiest time ever to reinvent your business because no one expects anything to be the same.
3. Know Your Numbers. This is where your PPP can be most useful. What, exactly, does this influx of cash buy you? Time? People? Customers?
4. Look at Your People. Who do you want to be in your foxhole – literally and figuratively? There has never been a time more important to have the “right people in the right seats on your bus” as Jim Collins coined in “Good to Great.” Carrying people who won’t or can’t do their jobs or don’t care about your company values will damage morale and productivity when you need it more now than ever.
5. Talk to Your Customers. Overnight, their world changed too. Have real conversations with your customers and find out what their pain points are today. Knowing where are and where they are going (or not) can help guide you to provide the solutions they need now or into the future.
And lastly, decide that you are going to come out on the other side better than you were before. Decide, as General McChrystal said in the podcast, “that you’re going to be one of the one’s that figures things out.” There is no upside to thinking otherwise.