I was a little over 35 years old when I landed my first CEO position in a company where a had worked a little over a year in other executive positions. We had a turbulent year before and our efforts for organic and non-organic growth had taken a step back with negative results. Our situation was dire. No outside funding available, our costs had risen extremely high with negative cashflow and we had expanded on industries that we did not have the edge on delivering our best. We were up to our ears in debt and far behind in our payments. To say the least, when starting the situation was at best extremely challenging.
I knew that I had little to no time to make a turn for the better. So I relied on one thing I knew would make a possible great impact to make things better. I listened and interviewed every single one of our employees, and asked what is working and what is not, and what can we do to make things better. I started relentless work on interviewing our talent and got really good suggestions and things to improve that I suspected but was now verified by our talent. The process took a lot of time and effort but was worth it.
Somehow I felt that I had not been able to touch the root causes and core reasons that were making our downward performance.
We first did little changes with small things in the company which had a positive impact on employee satisfaction but was not still pulling us out of the spiral. Somehow I felt that I had not been able to touch the root causes and core reasons that were making our downward performance. Because of the pressure of our cash flow, stakeholder expectations, and funds I did one thing that made things a lot worse, I hammered the corner of the glasshouse, when it only could withstand a little tapping with a rubber hammer.
Why lead the cause, not the results?
So what did that mean? I did one thing that was something I always hated, I turned to financials and went for a short-term quick fix by cutting down our employee costs radically and shut down inside operations that I justified with only financial numbers and savings. My reasoning was not based on causes, employee involvement, and leading the change, but rather going for quick wins at the expense of all that before mentioned. I was trying to please someone else than our most valuable asset, the people.
In the short run, it looked like financial savings were going to be great, but soon after realized that when going a little bit over the short term we are plummeting even more. Motivation, talent, resources, and know-how were low and we struggled to get quality deliveries to our most precious customers on time and with quality. Our manufacturing cost had risen even higher than before the radical expense cutting.
Lead the change, take a step back re-evaluate, listen and collect the data that caused our spiral.
So what did that lead to? It led to micromanaging. I thought that I had to be all over to see that the changes we implemented were going forward. But on that, I forgot to lead. Lead the change, take a step back re-evaluate, listen and collect the data that caused our spiral. At that point, it was clear that there was no way out and we went into bankruptcy.
The hardest part was not admitting that I was wrong in my choices, but rather going and telling 65 employees working there that they are going the be without a job in two weeks. That hit me the most. Money invested and other things were just material and can be replaced.
After that happened I had some time to think about the WHY? What could I have done better, could the situation be different with other choices, or was this just something inevitable?
What did we learn?
I narrowed my experience in a few key points:
- Involvement of your employees in decision-making and strategy. It is far easier for your talent to accept and move in the desired direction if you can be involved in decision-making. This does not mean that everybody makes strategic choices, that is still the job of management. But more to ask them, let them tell you what matters the most and what they see as the priority. I started well with this but did not follow through when things got tough.
- Small things with a big impact. Realizing now, that I made too drastic changes in a very short period that led to a downward direction in our business. See first what already works, and how that shows in your everyday life. Keep and improve those. Then start to look at opportunities and make them your strengths. Select a few things to improve. Just 3-5 with the least resources and with the biggest impact. With these, you don’t have to try the big leaps to turn weaknesses into strengths and go for too much of a push at once. For this to happen you have to take your time to collect the right data and utilize it for the process.
- Lead the cause, not the results. I was pushing myself to micromanage when staring too much at our financials and short-term KPIs. I was not concentrating to see the big picture, the future, and leading the change. I forced myself out of the position I was hired to. Stop putting down fires and take a step back to evaluate. You will need data, root causes, and the right metrics to do so, but seeing now micromanaging will not forge superheroes. Leading and supporting your best talent does.
Gladly I can say that all of our great talents had new jobs with good companies.
For me, these experiences have made me even stronger and maybe even a better leader. I will embrace every moment that we had and will do so in the future. Be present and take your time assessing the situation.
I have taken it to my mission, that if we in Priorit.io can save even one company in the same dire situation, we have fulfilled our mission. Success belongs to everyone.
