Shut it down
How do you make plans when plans keep changing? You start at the bottom and work up.
Our take on business continuity is a careful plan to step down Maslow’s triangle backwards. That’s always been our approach to risk. We reckon you only really need two things run business: a pretty good idea how to make money and a rock-solid, worst-case-scenario exit strategy. Once you’ve made friends with the latter, you can focus on the former - and every day in business is a bonus.
And while people usually keep these kinds of plans under cover, we thought it may be useful to share. Everyone is making tough decisions right now. And every idea is worth considering. So here’s our four-phase, worst-case scenario exit strategy – and how it helps us focus on getting the business through.
PHASE ONE – CUT THE OVERHEAD.
When tough stuff happens, you need react in kind. Every good business runs a tight P&L. But every P&L could be tighter. In our case that meant cutting back on just about everything. But our biggest cost is people, so we also took a look at duplication of talent and our ability to outsource. Then we made the tough call to lose three brilliant people. That’s not what anyone wants to do, but it’s tough to argue with the numbers.
PHASE TWO – PROTECT THE TEAM.
With fewer mouths to feed, our next priority is feeding them. We could feed six people at 80% salaries or ten at 50%. So we chatted with the team and decided on the latter. It’s only been a week, but the response has been amazing. We’ve checked in with the vulnerable, appreciated everyone’s efforts and we’ll top up those salaries just as soon as we can.
PHASE THREE – PROTECT RELATIONSHIPS.
When things start looking up, they’ll start picking up. But only if you’re ready. That means consistent investment in brand. And doing everything we can to look after clients. Any economy is an ecosystem. And right now, everyone’s under pressure. So we need to be helpful, flexible and brilliant. We can do that in Phase Two until the numbers tell us we can’t. Then we’ll cut right back to a tiny team and double-down on looking after the people who look after us. We are all in this together.
PHASE FOUR – SHUT THE DOOR.
The worst-case scenario is a stack of second-hand laptops and a shiny red fridge without much beer in it. That and the liability of our lease. Our walk away number isn’t a small one. So we clearly know when we need to walk away. There’s no question that would be very sad. But it’s also unemotional. Business doesn’t have feelings, it just is. The minute you confuse business and nostalgia is the minute you start making mistakes.
LOOK TO THE WORST. WORK FOR THE BEST.
That’s our plan. We’re currently at Phase Two and we’re confident we’ll stay there. Plan for the worst, hope for the best. Phase Two is the best we can get right now. And because we’ve made friends with the worst-case scenario, Phase Two feels like success. This is important, because positivity drives positivity and our team and our clients need as much of that as possible.
ANY PLAN IS A GOOD PLAN IN A CRISIS.
The best thing about this plan is that we don’t have to keep making plans. We know what we need to do and the numbers will tell us when we need to do it. So that means we can focus on doing amazing work for amazing clients and keep putting food on ten different tables.
Is it the best plan? No idea. But it’s the best one we’ve got. And it’s working. Sure, we could borrow and invest and do something different. But that’s just madness. Anyone who tells you otherwise is gambling with someone else’s money.
To sum it all up, the boring bit of business is the management of risk. So take it off the table. Do what you do to make money and always have a worst-case-scenario exit up your sleeve.
That’s what I reckon, what do you think?