I have only been in one real fight in my life and if YouTube had been around, I’m sure my scuffle would have received a critique similar to the famous Star Wars Kid video. I don’t remember much about my fight because everything kind of went blurry in the moment. I can only imagine there were a lot of flailing arms in an unflattering display of failed pugilism.
One thing I will always remember is getting punched square in the face. There is something so incredibly jarring and absolute about getting hit in the head. It was something I decided, in that split second, wasn’t for me.
Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.” Recently, that quote started to seem increasingly relevant to Redhawk and the work we were doing with clients.
Our firm works primarily with entrepreneurs and owner-operated companies. More specifically, we work with companies that are in some kind of transitional phase. This is represented both in periods of growth and recession. The realization of this transition happens when the current business structure or model can no longer operate as it has and continue to grow successfully.
Sometimes this happens slowly over time and creeps up on our clients. In some cases, this point of inflection is immediate, explosive and violent. A key supplier folds, an important employee quits or a major customer leaves and the business has been fundamentally changed overnight.
They got (figuratively) punched in the mouth.
This is where one of three things happen and is best captured in a quote my friend Ted Alling posted to LinkedIn recently:
“Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them.” —Andy Grove, former CEO of Intel
Company leadership that is focused on surviving immediately concentrates their efforts on damage control and minimizing the impact as much as possible.
- They offer significant discounts to win major customers back.
- They publicly fire a key employee to signal the problem has been corrected.
- They re-brand themselves in an attempt to create distance between their image and their failure.
In the aftermath of this business “assault,” we see if an organization will rise to the challenge and merely survive or come out of the crisis prepared to THRIVE. Great companies are not only ready for this kind of challenge but relish the opportunity it presents to push forward and get even better.
How well can you take a punch? Here is an abbreviated list of questions to consider:
- How many customers do you have?
- What is the average revenue per customer? Any customers who represent more than 20% of your annual revenue? What happens if they go away?
- What redundancy do you have in your supply chain? Are you tied to a single source for any major production requirements?
- Do you have a succession plan for key employees? What happens if they win the lottery and never come back to work? Are you prepared to deal with that?
- Do you have clear organizational goals? Does everyone know what they are? Is progress toward those goals regularly shared with everyone?
- Do have your business rules and operating procedures documented? Are they kept up to date and relevant?
- What is your Current Ratio? Can you survive a downturn in your revenue?
This is a very basic list but if you find you are missing any of these, take the steps now to correct them.
Good companies are prepared to take a punch. The best companies are ready to make the puncher miss.