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Fear. Uncertainty. A growing sense of panic every time the president delivers a national address filled with increasingly bad news. Even with interest rates at essentially zero percent, the stock market (and 401(k) balances) continues to tumble. Chatter around the workplace is filled with questions like: Should I get married? Can I afford to pay my rent? Will I get sick? Will I have a job tomorrow?
As scary as things may seem today thanks to the Coronavirus, we’ve lived through this eerily similar economic horror movie before—four times, in fact. We actually bought our business, Springfield Remanufacturing Corp. (SRC), in the wake of the 1983 recession. The good news is that the system we have developed as a result of living and growing through those experiences, The Great Game of Business®, has not only helped us survive, we’ve actually doubled the value of our employee-owned business in the wake of each recession. How? By teaching all of our associates how to think and act like owners. By doing so, we’ve built a business of businesspeople—and inspired a community of thousands of other like-minded organizations to follow suit.
But what can you do when you’re facing fear in the workplace today? The good news is that you can turn to four key principles of the Great Game™—transparency, financial discipline, trust and respect for people, and remaining forward focused—to help address the fear inside your workplace. We’re relying on those same tactics today at SRC. Let me explain what I mean.
The power of these principles was reinforced after the 2008 recession hit. It was the result of a so-called “black swan”—an economic wrecking ball that no one saw coming, not unlike the Coronavirus. In that case, it was the collapse of the U.S. real estate market.
The people at SRC were scared, really scared about the coming year. We had customers in panic mode. Some were on the brink of bankruptcy, while others didn’t know if they could get financing. There were also those who went to the mattresses and eliminated inventories—and employees. Added all together, 2009 looked like an exceptionally bleak year for a manufacturing company like ours. The fear was paralyzing.
In many companies, when things get really hairy like that, the chief executive starts losing sleep and banging his or her head against the wall out of frustration. They begin to question their people. “How come you don’t get it? How come no one seems to understand what’s going on?” Perhaps they don’t get it because no one has ever taken the time to explain it to them. Teaching people how to build a company is what the Great Game is all about. It works in good times—but it works even better in bad times. At its core, the Great Game is a system designed to get you through the tough times because it bridges the information gap that separates management from their associates—a gulf that separates perception from reality.
In 2009, when things looked really scary, we knew we needed something to help to get us all focused on surviving the recession—and all the heartache that comes with a downturn. We turned to the best resource we had: our people. We laid it all out to them. To take away the fear, we had to lay out the facts in a radically transparent way. We said, “Let's look at the worst-case scenario. Let’s face what death looks like. We called this Stage 1. If we hit Stage 1, where banks take away our credit, we will run out of money, and the company will die.” We knew what our cash run-rate was and how negative it would have to go before we would be forced to close the doors. Some employees even began using the term DEFCON borrowed from the Cold War, as in, if we hit DEFCON 1, it would be game over.
Once we calculated the worst-case run-rate—the one that would lead us to Stage 1 and ran out of cash—we said, “Let’s find ways to be courageous and not let it happen.” Once we identified Stage 1, we moved to Stage 2, then Stage 3, and finally, to Stage 4—with each stage representing an improvement in how we were increasing revenues and cutting costs and debt. We got everyone involved in planning how we could do that—and they were the ones who came up with the solutions.
Our wildest dream was that we might be able to pull off a “two-fer” where we could see growth in both our old product lines as well as the new ones we developed. If we could do this, we might even grow faster than ever and create new job opportunities in the community. That is precisely what we did. We introduced new products, like new starters, alternators and a natural-gas engine for automobiles, at a faster rate than we ever have before—all because we reduced the fear out of the workplace and got everyone focused on building our future.
Now, more than ten years later, I can tell you that it’s never fun to go through a downturn—but we are a stronger company because of each one we’ve been through. Now here we are, facing yet another crisis—one with so many unknown variables yet to play out. But we’ll use the same Great Game playbook we’ve relied on in the past.
If you want to take the fear out of your workplace, consider taking the following steps:
1. Embrace Transparency
The popularity of the book Bo Burlingham and I wrote, The Great Game of Business, helped usher in a movement that’s become known as “open-book management”—which is the idea that everyone inside your organization will be taught to understand the numbers that drives its success. I know a lot of growing business owners can be reluctant to share the truth about the financials inside their business. But I don’t think they realize the kind of risks they take on by doing so. They take on the burden of keeping the business alive—solo. I’ve seen so many cases where CEOs and owners are forced to shut the doors of the business to the shock of their associates, who are then forced to wonder if they could have done something to contribute to a different outcome. “If only they had asked for help.” That’s why it’s amazing what happens when you have the courage to share the news—the good and the bad—with your people. Treat them like adults. Get their attention directed toward what they can do to help—versus panicking. Plus, the more eyes you have on a problem, the more ideas you’ll have to solve it with. It’s an automatic check-and-balance on the security of your business. I have never seen our people come together more than during a crisis.
2. Discuss Your Cash Position
I can’t tell you how frustrated I’ve been over the past few years as I’ve watched startup companies under the guidance of universities, incubators, and even investors embrace the idea that the only way they could grow was to take on debt, something I wrote about in my recent book with Darren Dahl, Change the Game. Avoiding debt was a lesson we learned long ago—when we started our business, our debt-to-equity was 89-to-1. Since then, we have always prioritized having cash on hand to deal with the unexpected. As a matter of fact, we engaged our associates back in 2009 to put a 10-year plan together to build a $100 million war chest for the next recession (a story you can read more about in the book, Get in the Game). I recognize that some of you may find yourselves in an over-leveraged position. But that can also be an opportunity to engage your workforce and tell them the truth about the situation. If you do find yourself in trouble, ask your associates for ideas about how they can contribute to cutting costs—and increasing cash flow to the point where you can actually cover your debt obligations. You’ll be amazed what can happen when you teach your people the rules of the game.
3. Protect Jobs
If you’re like us, you’ve been fighting tooth and nail over the past few years to attract—and retain—people in the middle of the “War for Talent.” We don’t have a future without people. But I’ll never forget the night in June 1980, when I turned on the TV to watch the evening news. It haunts me to this day. We were smack in the middle of a nasty recession, and the news was usually grim, especially in the Rust Belt where I lived and worked. Factories were closing left and right; thousands of people were losing their jobs on a daily basis. Unemployment was soaring, along with interest rates that topped 18 percent. Executives became idols as downsizing jobs became the new mantra, laying off people at a time they needed those jobs the most. Something similar could happen today. I attended a conference last summer where a top executive at a major technology company admitted that when the next recession hit, they, like many other companies, would resort to layoffs to survive. I caution you to think differently. It’s my belief that whoever has the most talented workforce will dominate their markets as soon as 2021. The time to get your organization ready for the next upturn is today—not when it’s already arrived. By then, it may be too late.
4. Get Ready for the Upturn
As bad and as uncertain as things look today, I have a secret to share with you: it’s actually harder to get a company ready to take advantage of an upturn than it is to prepare for a downturn! Downturns can actually be opportunities to fix things inside your business that you can’t afford to invest the time and resources when the economy is booming. While it might seem counter-intuitive, the current down market comes as a kind of short-term relief. It’s giving us a chance to catch up—to make investments in our people and facilities—and to prepare ourselves to capitalize on the economic uptick that we expect to hit in late-2020, early-2021. By then, our workforce should be more stable and productive—and ready to take full advantage of the available opportunities. They have every incentive to do, because, as owners of the business, they have a true stake in the outcome.
I know how painful things are today—I feel it, too. The health and safety of our associates is our highest priority. But there’s no reason you can’t also dare to be successful. And learning how to build a culture based on the principles of the Great Game of Business (or doubling down on them if you’re already a player)—transparency, financial discipline, trust and respect for people, and remaining forward focused—is a great place to start removing the fear that’s pervading your workplace.
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