Kalika Yap, an Entrepreneurs' Organization (EO) member in Los Angeles, is founder and CEO of both Orange & Bergamot, a creative agency for female founders, and Citrus Studios, a branding and design agency. She's also an author and the host of EO Wonder podcast. On a recent live-stream episode of the podcast, Kalika interviewed Verne Harnish, EO's founder and the author of Scaling Up, about surviving the crisis. Kalika shared some highlights:
Panic is contagious, but so is leadership. As leaders facing the Covid-19 crisis, it's time to rise to the challenge of a lifetime.
Verne Harnish founded EO in 1987, the same year the US stock market crashed on the now-infamous Black Monday. Since then, he's experienced his share of booms and busts. He's also weathered some challenging personal times: His father lost his own appliance-repair business in the 1973 recession when the family lived in Kansas.
These days, Verne runs Gazelles, an executive education and coaching firm, from his home in Barcelona, where he lives with his wife. They have four children.
Verne talked with Kalika Yap during a livestream EO Wonder podcast, about Covid-19 and the wallop it's giving the global economy. He shared the "Five Cs": Concrete actions you can take right now to get through the Covid-19 crisis. Always an optimist, Verne quipped: "I was going to wear my rose-colored glasses. Clearly, we've got to take those off!"
But you can tell from his upbeat manner: He thinks we'll make it through, and that's an important message to receive.
Here are Verne's Five C's of leading in a crisis:
1. Communicate daily
Stay. In. Touch. Email, video, voice--whichever you're best at. Verne went on to say, "Don't freeze. Get some form of communication out to your team every single day. They want to know that you're working, that you're leading, that you're making decisions."
Put the bad news first. "Your team wants to know that you're facing the brutal facts. That builds trust and credibility around everything else that you're going to be sharing. I did that this morning with my team."
2. Customer and community support
"This is a time when people are either killing or building their reputations. When it comes to your clients, the key word here is triage." Some clients you're going to serve for free, and others you're going to cut loose. Some bills you're going to pay immediately, while others are going to wait.
3. Clean up and catch up
This is a time to prune. Customers, processes--all of it. After a decade of running hard during an economic boom, now's a good time to accomplish those internal projects you haven't made time to tackle. "It's time to sit down with a fine-toothed comb and figure out what has to get done." For example, Verne revamped his speaker's page.
4. Cash, cash, cash
Raise it! "I cut back on my SEP and IRA contributions," Verne shared. "I've chosen not to take a salary for the next two months." And he also plans to pay the minimum on credit card balances during that time: "It's important to have three months of cash on hand, too--maybe six." Verne also went through his bills and discovered that he was paying for two CRM systems--one that he thought had been canceled after a recent transition.
5. Calm consideration
Meditate, exercise, do whatever it takes to stay calm. Remember to breathe! This is when you most need talk time. Find a fellow entrepreneur or someone you can talk to about what's going on, preferably two or three times a day.
As Verne put it, "You can't think your way through this--you have to talk your way through it. When you stop thinking and start talking, you shut down the fear center of your brain and light up the pre-frontal lobes."
There are likely things you need to talk about, but maybe you can't share them with your spouse, employees or even your senior leadership team. That's why it's critical to find an entrepreneurial community or another business owner as a sounding board.
It's ok to be independent, but there's no reason to go through this alone.