Seven things for startup leaders to prioritize in a crisis

Cristobal Alonso, CEO, Startup Wise Guys.

Crises, like startups in the current economic climate, can be terminal, but they also provide opportunities for the agile and brave. I’ve noticed that leadership is often the deciding factor in whether or not a growing company will survive.

When circumstances change, leaders can and should step back and reassess their strategies. I’ve identified seven areas that leaders can focus on to get their startups through a crisis and be the winners when growth and stability return.

1. Purpose and Values

It may be necessary to change your strategy, but how do you avoid the short-term thinking that destroys a startup’s culture with misaligned behaviors and decisions?

Purpose and values ​​should be at the core of every company. They are the guide rails through both good times and crises. Make sure everyone you recruit is aligned with clear values ​​to create a strong team and relationships – this is essential when the going gets tough.

Assuming you’re not currently hiring, an essential part of keeping teams motivated is re-communicating your purpose and bringing people together around your culture. Does that sound indulgent in times of crisis? I’ve found that if you don’t, you’re just waiting for the crisis to define your team culture for you. And if you haven’t already taken the necessary steps to develop a unique culture for your startup, now is definitely the right time to do it.

2. Plan effectively

Too much short-term thinking can lead to increased anxiety and uncertainty, and ultimately to the bankruptcy of the company. You have to plan and prioritize. Identify the biggest hazards, hedge your risk and reduce uncertainty. Resources are likely to be limited, so adapt with what you’ve got.

When key tasks are completed, communicate successes to the team as this will help show people that the crisis is manageable. The goal is to reduce uncertainty, which can be an organizational killer. Show how to do the right things in the short term while staying true to the long term vision.

3. Roles and Responsibilities

A crisis is a good opportunity to step back and assess everyone’s strengths and weaknesses and determine which ones are necessary and which are not. What may be less obvious is that it’s a good idea to reevaluate your recruiting strategy as well. Start with Objectives and Key Results (OKRs), which can tell you whether your needs are actually full-time positions or outside consultants to help with short-term issues. It may be necessary to let go of certain full-time positions that are now less relevant to the survival of the company.

On a more positive note, if you do this, you actually create great opportunities for people development. People grow quickly when they take on more responsibility, so focus on creating environments where people can stretch themselves and grow.

4. Focus and Execution

Successfully getting through a crisis puts a strain on people’s ability to concentrate and perform. Under normal circumstances, there are often five “rogues” that hold them back in this regard:

• Lack of clear priorities.

• Shiny object syndrome.

• Delay.

• Multitask.

• Perfectionism.

But in a crisis there is an additional brake – fear – that causes uncertainty and panic.

To keep these distractions from strangling your startup, leaders need to help their people keep laser focus and tunnel vision on the new targets. Focus your attention on cost management, people management and opportunity development.

5. Optimal energy

In particularly difficult times, it is important to take care of yourself and your team so that both of you are full of energy and positivity.

Use a crisis to energize the team; focus on bringing unity and building a positive mindset and perseverance. Be creative and support activities that empower employees to take care of their mental, physical and emotional well-being. For example, create a #wellbeing Slack channel, start a walking challenge, etc.

6. Robust communication

Internal and external communication become more relevant than ever in a crisis. Your standard should be to communicate as much as possible, and remember to be as concrete and clear as possible.

I’ve found that overcommunication is a smaller risk than undercommunication. However, be aware of your team’s energy and mood during the crisis. When in doubt, the best guidelines are to simplify, emphasize and repeat.

7. Mental toughness

In a crisis, it can feel like there’s a stress booster on 11 somewhere. Coping with – and thriving in spite of – the stress is the real challenge for leaders. But I’ve found that it’s actually a growth opportunity – an opportunity to shift from a victim to a helper mentality, to embrace discomfort, find yourself, and become a leader.

Do whatever it takes to lift you and your team to a higher mental state. For example, we use a tool to track how stress affects our team and where the stress comes from. No matter how intense the challenge, you can handle it better from a higher state.

There are some signs that the negative forces that have tilted the world into recession in 2022 are losing momentum. The depth of the pullback may not be like that strict as many predicted. As with the pandemic, there will be many opportunities to quickly adapt to the new market trend. What really matters here is that you’re ready to surf these opportunities and create strategies that give your startup an edge that you can leverage into the next cycle — and beyond.

A company downcycle is an opportunity for startups to sharpen their focus. Those who achieve this can become the winners in the next upswing. Leaders need to see through the current pain and focus on building organizations that can scale in the long run. These seven points are great places to focus your efforts.

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