In March this year, I got the unexpected news that I had a colon cancer tumour. leading to five months of a tough health journey that took over my life.
I am now on the other side of that and recovering, part of which is building back up physical strength and fitness. Key to this for me is Equipment Pilates, so I recently started back to this discipline, something I have done every two weeks for over a decade now.
Yesterday my trainer noted to me “it is so good that you had a strong base“, meaning that I could reconnect to the work quickly due to having a solid foundation of many years of work on my core strength. I’m not back to where I was before as yet, but I am a long way further ahead than anyone would be who was starting post-treatment exercise for rehab and who had no history of exercise. Pilates is a core part of my foundation as a human being and I am now benefitting from many years of commitment and investment.
This all makes me think of business and how businesses fared after the pandemic struck. Nobody was prepared for this, yet some did far better than others, several of whom have been podcast guests on #WhatComesNextLive (I highlight out of this group Pat Kramer, CEO of BDO Canada. Listen to him and you will hear quickly what the secret was to how they thrived in the pandemic).
We now face a tough recessionary period ahead, something that many did not predict as recently as earlier this year, hence are unprepared for what it will take to get through it to the other side.
Three key areas that come to mind are key in recovering from impactful events as a company. In order of priority.
- Culture and Leadership.
- Balance Sheet
- Business Processes
Now, often people will think of the last one first, that if you have solid business processes you can run efficiently and so recover more easily. I put it third on the list though, as a foundation of solid business processes is necessary but not sufficient to give you the best chance of thriving after unexpected events impact you.
This leads me to the second item, your Balance Sheet. A tough adage to swallow is “nobody goes out of business for lack of profit, they do so because of lack of cash”. Businesses that are over-leveraged can be great at business processes, but if they run out of money, they are out of business, or at least struggle as they have to cut back on core areas in order to survive, areas that then cost them in the long term, Interest rates are going up, availability of financing is going to get tougher. If you haven’t done so already, focus on shoring up your Balance Sheet. “Cash up” for the coming recession.
Finally, above both of the prior points in Culture and Leadership. Above almost anything, people have to trust you and your business to keep doing business with you (if clients or suppliers), or to keep focussed on doing their best work (as members of your team). You cannot hope to put in strong Culture and Leadership after an event, you must have committed to and invested in these areas for years and years prior in order to have the sort of foundation you need. If you have a good culture, then now is the time to find funds to invest in it, to assure and reassure people of who you are as a business and how you will lead through tough times.