Don't Let A Good Crisis Go To Waste
My partner Albert shared this line on his blog almost five years ago now. I find myself using it all the time. And it is an important lesson that I have learned in my career.
When something goes badly in your company, for many the initial instinct is to keep things under wraps as much as possible to avoid freaking everyone out. I would argue that it is better to acknowledge the crisis and use it to your advantage.
Change is hard to bring to an organization and a time of crisis is often a perfect time to make some changes that you have wanted to make for a while. It creates a perfect backdrop and context for doing that.
Maybe you are in the midst of a financial crisis brought on by a tough fundraising environment. Maybe you are experiencing some management turmoil. Maybe you've lost your largest customer. Maybe you are getting pummeled by bad press. It really doesn't matter what is the cause of the crisis, but all of the above will work well.
I have seen a portfolio company react to a financing crisis react by making important and overdue changes to its business model and organization. The financing crisis ended and the company emerged in a much stronger place.
I have seen an entrepreneur react to the loss of several important team members by shuffling up the organization, pivoting the product roadmap, and operating with a much leaner team. The company recovered from the loss of the key team members, launched a new product very successfully, and got onto a path to profitability.
There are a lot of these stories to tell. Because crisis is what brings clarity and focus. You get punched in the gut, you get back up, and you take care of business.
So if you are in the middle of a crisis in your company right now, think hard about using it as an opportunity to make some changes. There is never a better time.
Comments (Archived):
There’s never really enough data early and mid stage to made decisions on.No one likes a crisis when it happens to you but for certain, they provide data points to take action on.That’s a boon in my book .
And then there are times that, as a leader, you seek to turn minor setbacks into crises so that you can motivate your team to make those changes long before the actual crisis arrives (which can, at times, prevent it).
The only times I’ve ever done this is with major staffing changes. Invariably people roll with change a lot easier that you imagine. They don’t want to institute it but accept it as a matter of course.
Absolutely. I just look to drive urgency.”What looks like a minor problem here has a decent chance to turn into an existential crisis in two quarters if we don’t fix it now. I say let’s fix it now.”You can’t do it every time, but if you really think it’s the canary in the coal mine, better to tell your team that than not…
Yup…and honestly, that’s suits your personality as an individual and leader Aaron.You are the antithesis of ‘head in the sand’ type. One of the reasons why I’m a believer in your co.
Hmm… As a leader you must also ensure that your followers respect and *trust* you. If they uncover your “false crises” then they might begin to doubt your judgement or think you the enemy.Maybe a better approach is to inform them of your plans to strengthen the company by making changes that will help thwart a future crises.
It’s not a false crisis. It’s called trying to see around corners.Transparency with your team is a must.
“…turn minor setbacks into crises…”That is trickery and deceit. I don’t see any reason to do that when you can just inform the team that you’re planning for the future.I don’t know what you mean, in this case, by transparency. But, I will say that a leader shouldn’t burden his/her followers with things they don’t need to know. The office of the CEO/leader is not for all to see. If you’re going to enlist the help of your followers then you tell them the truth.There also are things that subordinates should not be told. Secrets that provice a competitive advantage may be one example.
You’re adding 2+2 and getting 15 but keep going at that if it makes you feel better.
re: “trickery and deceit”.This is all just a matter of where someone in particular draws the line of course.I get the impression from reading things that you write that you are way more ethical and upstanding than I am! Otoh I know people that I feel put the line in a place that I would never go to. We all judge others by where we draw the line of course. We can all find examples of something that someone else did that we wouldn’t do as if we all are 100% completely honest in paying taxes and not breaking any laws which of course is not the case. It’s all a matter of how much leeway we take and what we feel comfortable with and allows us to sleep at night that’s all.
That’s true.Still, I wasn’t advocating for being untruthful. If I believed that a “minor setback” had little chance of turning into a crisis, I certainly wouldn’t say it to my team, and my comment didn’t imply that I would.Thank you for the kind words.
I think you’re going off course. There are people who use management techniques that are based on fear. The company is always on the verge of bankruptcy. Every employee is about to be fired. Wages age gonna’ be cut next pay. Etc.Some teams *only* respond to such tactics. I just don’t think in today’s knowledge worker age that it’s a good mental state to have people working under. I would rather *adjust* the team.This isn’t a discussion about morals. It’s a discussion about motivational techniques.
Huh? I’m discussing your post.You said “…turn minor setbacks into crises so that you can motivate your team…” That’s tricking or deceiving your team with the intent to drive fear into them for the purpose of motivation. I know that works in certain situations. But, I don’t think it’s a good choice.
Great point. This concept (not identical, but same theme) was driven home for me when I read the book “What Were They Thinking” by Jeffrey Pfeffer. He has a concept in the book called “Forgive and Remember” – that people need to acknowledge and forgive mistakes, but then remember them (vs. forgetting) because you will need to make a decision down the road that the results of this mistake can be helpful in forging your response.
being good in a crisis: yes. now do that every day.
Good to be good in crisis, not good to be in crisis every day. Doesn’t that hark back to yesterday’s post?
I hear u. I wasn’t clear. I meant the focus and clarity and sweeping away of impediments — do that all the time
Is there a difference between needing to make a decision that sets direction vs. crisis?
Proactive vs reactive. I loathe the word proactive, but don’t have a replacement for it yet.
A term I use along with proactive regularly is preventative – maybe that fits?
I like the description of what the god Shiva does – creator, protector, destroyer.Do you feel this covers all the bases?
Creation, Maintenance (or Love), Destruction (Rebirth / Renewal)orG.O.D. – Generate, Operate, Destroy (I think that’s what I remember anyway)I’m not sure that an replace proactive though.The Create / Protect / Destroy idea is a cycle, not any one fixed point. Creation can be happening while destruction is happening, etc..
why are you crisising every day?
aaah, wasn’t clear. i meant be clear, have focus, get rid of impediments every day, all the time.
hopefully not … but getting rid of impediments every day … feeling a little reactive after working on a project with a lot of team members who had many more reasons for why things couldn’t be done than drive for getting things done. i know you know that song.
the art of GOV takes this thinking one step further. don’t wait for a crisis to happen when one can be ordered up at precisely the right moment and wound up to just the required intensity. I give you the North Korea ‘crisis’.
that’s right! waiting for a crisis isn’t cool. you know what’s cool? creating a crisis! government’s core competence.
They don’t need to create any crisis right now. The US has so many real ones that you can have your pick.
I think many things become clearer during time of crisis and sometimes when looking back you realize that these ‘crises’ were in fact desirable rather than undesirable event.
Don’t sugarcoat this though.Getting beat up by the press. Having to get a bridge. Having revenues drop by half with no replacement. Having your C level whatever walk publicly. Having an employees publish sensitive info.You can push this all on ‘learnings’ but its pain when it happens.Bad days have good aftereffects but they are indeed just that….challenging when they happen.Experience gives you composure and poise as a leader publicly but still, it stings. True as a startup, true as a public company.Leadership under fire is something JLM can indeed tutor us on.
.Almost every aspect of leadership under fire comes down to simple protocols — whether in business or the military.The military chain of command is a beautiful thing to watch when the shit hits the fan. It is organized for exactly that eventuality.The Captain running an infantry company gets killed and the Executive Officer takes over without a second thought. The XO gets killed, the ranking platoon leader takes over, etc.In business, it is critical to have similar plans in place.When I was running a pretty good sized company I came down with hepatitis. Very unusual to get hepatitis in your mid-40s. It is a childhood disease in Texas and all of my kids had the antibodies.Me, unfortunately, had not been raised in Texas (I go here as fast as I could as soon as I realized my destiny.) and got deathly ill and was out of work for the better part of 18 months.My company ran brilliantly without me as we had literally just returned from an executive retreat to Jamaica to plan for and deal with this eventuality. At first, some folks thought I was funning them as part of the exercise.I like to think that the company ratcheted up 5-10% when I returned to work but that might be a bit of vanity. Who knows?I decided to sell the company shortly thereafter and did.I had a similar experience in which I had a West Point/MBA understudy to a woman who had a cardiac illness — we were down for about 12 seconds.Contingency planning is very important. And, frankly, it is very easy to do.JLM.
Absent that, at least buy key man insurance when it comes to startups.
As I said to an entrepreneur last week, “you are going to get through this but it is going to suck”
.This must be a difficult part of your business to see a train wreck and to have to go around and help the survivors.JLM.
As someone in the middle of it right now (running out of cash, product needing development costs, with a large lucrative letter of intent sitting on the side waiting for us to finish product), it does suck, big time. Thanks for the timely post Fred.Think putting the positive with the negative is extremely important. As is ensuring that you have people to lean on. Some of my personal relationships have gotten a lot stronger and, hopefully, will be much stronger on the other end of all this turmoil.
To me it sounds like you are right about to avert the crisis
“As I said”That’s really what people need actually.For “daddy” to tell them everything is going to be ok after a bit of pain.I’m serious. I’m convinced that back in the days before modern medicine many younger minds were put at ease when the old wise guy in the village told people that he also had blood coming out of his (you know what) and he is still alive today so don’t panic.My personal strategy that I have developed is to project forward to the end of the crisis [1] knowing how jacked up I will feel after it is all done (because usually after a crisis is averted and finished by contrast you do feel jacked up. I call it the “after the sickness bump”)[1] Also works with dental appointments, undesirable family functions as well as a host of other non-crisis day to day things as well.
Two of my favorite quotes come to mind. One is less poetic by Jim Collins – “Confront the brutal facts, get in a room, fight it out, leave okay”. The other is from Mark Twain-“Good judgement comes from experience, experience comes from bad judgement”.
Those are both fantastic
Reading Sun Tsu early in life led me to a favorite word/character in chinese – crisis. It’s made from danger and opportunity together. Ever since I’ve known that word I have not been afraid of “crisis” because I am waiting for the emotional smoke to clear to see the opportunity.
I love that one! Thanks for adding it here.
Glad you like it! It’s like a ‘no fear’ tool in my belt.
At the craziest start up I was ever involved with, Electric Communities, our motto was ‘We Laugh at Danger!”Wacky wonderful place. Vanished into history.
I think that motto would better serve a Hollywood stunt company.
We were on the cutting edge of intellectual craziness building what we hoped would be the first single sign on, consistent, avatar based community platform on the web.Founders were from the Habitat project, Neil Stephenson was on the board and there was a bunch of Holllywood money in it.Of course, laughter was not a talisman that predicted success even though we purchased OnLive, The Palace and there was an exit down the road.
“We were on the cutting edge of intellectual craziness…”It sure is fun!”…building what we hoped would be the first single sign on, consistent, avatar based community platform on the web.”So you were building FB. Hmm… That brings up some mind aching thoughts about why so many others failed but FB succeeded. If you have a few hundred years to talk we could get together and figure it out. lol
Nope, not Facebook.More like Disqus meets Second Life.
That sounds crazy-ish – and fun. 🙂
Yep, it’s the holy grail right now. Everyone wants one login to access all locations on the web and store all our data on our server for us to easily access and manage it.The problem is you can’t get Fred to fund it. He’s too busy! lol
Now that right there is a little bit of history. Around that time (probably a little later ~’97) my wife was at Concrete Media working on Bolt.com. The modern social network is pretty much an homage at scale to those two companies.
A little later but in the same era. Thanks for the share.Made me think of this…A post I wrote in 2009 when I was just getting entrenched in this community. An homage to Disqus and a huge hat tip to the fathers of the online community movement that I had the serious pleasure of working with at EC.Comments, Conversations and Community http://awe.sm/p0djL
Great riff. Disqus is one company that delights and disappoints in equal measure — an impressive feat.
Yup…Very well said. Agree completely.
Haven’t read this for too long – shall revisit. Thank you for the reminder.
That’s so awesome. In the same family, Churchill said:“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
A wise old Chinese man once said:”An optimist is a person with no experience.””A pessimist is an experienced optimist.”:-)Edit: Just kidding. I’m an optimist myself, but with eyes open.
I love Churchill nuggets like this, thanks for sharing. My mother lived through the war in London, and the unruffled, tough gut approach was passed on to me. I thank her for it.
I guess a better question is how to deal with dangerous opportunity and stress
i feel that the stress component really is the catalyst and people pick up on that, which may trigger a butterfly effect that should be maintained in the first place. in startup environment, where much can be un known – stress is a constant 🙂 from observing friends in the non start up phase, the stress does not go away… the risk of someone quitting is different for a startup. if crisis is not well managed one may lose key players. for a team of 20 it could have vast effect on the success of the company. for a company of 1000 – much less.
Panterosa, I like your response. Let the smoke clear and then seize the opportunity. It may not appear black and white but you can always make something out of nothing, it’s your choice how you go about it.
Beautiful advice. Sometimes you hear things and they just don’t ring true. This seemed to be the phrase of the Obama’s first term and I seemed to hear it again and again in the political context. Thus, it left a bad taste in my mouth. But now I see it in a whole different light. Thanks again , Fred.
Chinese word for crisis is composed of two words, danger and opportunity.
this is incredibly sage advice for founders. we recently experienced one of these moments… our founders discussed the situation for 10 minutes, sent out an email, then ran to pick up a case of beer and got everyone together to discuss and ‘celebrate’ the moment… Now, we’ve been able to mentally reboot and return to the grind.
Yes. Acknowledging the presence & magnitude of the crisis is half the battle.Sometimes, entrepreneurs will keep it to themselves longer than necessary & it makes it more difficult to recover. That’s why it’s good to have mentors & advisors around with whom you regularly share what is going on.A startup is a works-in-progress company for a long time, and you’re not really out of the woods until you really are.
I’ve tried to encourage such a mindset when in the midst of such circumstances – has rarely been adopted with any commitment; is usually just a token attempt at gesturing towards a collective mea culpa and a desire to learn from bad things as much as good things. Sadly, memories are short.Great advice/mantra,
Very much agreed. Said another way, a critical insight – though a difficult one to acknowledge – often masquerades as a crisis. Without the crisis, it’s that much harder to motivate to swallow the bitter pill. Procrastination can be easier. I like the Andy Grove and Gordon Moore story on getting out of the memory business (in favor of full focus on CPU). They were faced with an epic crisis as the bottom fell out of their key business due to competition. They were incredibly attached to the memory business, both emotionally and financially and without drastic changes, were at risk of riding it into bankruptcy. Andy Grove said to Moore “if they fired us and tomorrow there were a new CEO what would he do?” The answer – get out of memory. So grove said to Moore “why can’t we be the new CEO and do it ourselves?” That kind of clean slate reset (but not restart) thinking was made a lot easier by the threat of the crisis. It was not fun but it was necessary and therefore easier. PS – a blog post coming soon on how it’s important to differentiate between the need for a reset and a restart. Sometimes things emotionally feel like a restart – a new game – is needed when a reset is actually what’s called for.
What a great topic for a post. Persevere don’t pivot?
Still writing the post. Would be great to get your take on some of the below questions as part of it. Pivots (or restarts) get all the attention these days. We’re in an industry and society of short timeframes and attention spans so persistence (or its uglier cousin, “slogging it out”) gets little ink. I don’t imagine you can persist a truly bad business into being a good business, no matter how long you ride it out And a middle third business is not likely to ever become the sexy story of a Twitter or Zynga through persistence. But persistence is its own path with its own pros and cons to be understood and evaluated relative to a restart. A lot of of the businesses that surround us each us day seem to not have been quick hits by the current standards and required a decade or two of persistence to become the household names we know them as. How many businesses that could have been 2x to 5x over a decade were pivoted away from in order to chase the “big hit”? How many of those that pivoted away did so not because their existing business was a failure but rather because there was not enough understanding of and appreciation for what’s involved in “persisting”vs seeking the hit. You’d know the math better than me but I’d imagine that a business that takes 10+ years to produce a 3x or 4x return for shareholders is still top quartile for the VC industry even though that’s not ever going to get a lot of press. So the question is – how would the returns for the middle 3rd group be different if the culture and perception of the persistence narrative were different than it is today. Would entrepreneurs stick with it for longer? Would Vcs develop more skill at nurturing the non “hit” companies knowing that the timeline was 10 to 15 years from the time of investment? The current “story” of VC returns is all about the big hits and the power law. Seems like everyone – entrepreneurs and investors – are, by now, very clear about what happens if you get one of those hits. But for every post about the effect of the power law, how many talk about about what happens with the middle third who will need to persist for 10 to 20 years to become big businesses? Everyone knows about Fred Wilson’s sensational hits – how much do we know about the good returns you’ve had from companies that will take 10 to 15 years? (I’m assuming these exist?) Were they worth the effort for investor and entrepreneur? How many of your middle 3rd companies could have been successes with another decade of persistence? In the VC funded world, do we need fewer startups and more finishups? In 1999 a guy I met (he was dating a friend) came over to my apartment (and office) to talk about startups. I was working on my first. He was 6 years older than me and working on his first as well. 14 years (not a typo) and two market crashes later that business is Cornerstone on Demand. I don’t think TechCrunch has written about it more than a couple of times. Today it’s a $1.7B public company. How many Vcs and entrepreneurs get started with a 10 or 15 year timeline in mind?
not enough
Fred had a great quote in yesterdays post. He said, VC’s should not invest in lifestyle businesses because they ruin them.
Good line. But does that mean that all businesses in the middle third that are going to need a long time to become big businesses are “lifestyle businesses”? When I wrote the comment, I did not have lifestyle businesses in mind.
That just feels rare. What path did the company take – long term non profitable or long term non scalable?
It is what it is. But yup if you are in the middle third you are “lifestyle”. I used to hate that connotation but I now embrace it. Doesn’t mean you can become huge. But it doesn’t work for a vc. No tears. Is what it is. I ran the numbers one day after running up the NJT which I am getting ready to do. The middle third sucks for a vc. By all accounts Fred is as good as it gets if you are in that category. I attribute most to his personality, but there is some allowance because he is successful. Believe me if you are the hope of the fund you are screwed
Makes sense.
What a great story. I can see applying this thinking to different scenarios …my business …my parenting…my life…any situation where I know deep down I can be doing things better.
how do you differentiate from a restart from a reset
.Sometimes the crisis is self created and there is the added consideration — could this crisis have been avoided? Perhaps avoided completely?Everything starts out as not urgent, not important.Then it either becomes urgent or important.Then it becomes urgent and important.Then it becomes a freakin’ crisis.Ask yourself — how much of what I consider to be a crisis was created because I failed to act when it was only urgent or important or even earlier?Every crisis that Fred enumerates had a solution long before it became a crisis. The solution would have required a bit of foresight and planning.The governance of the US is a perfect example — we lurch from one manufactured crisis to another and thereby miss repeated opportunities to kill these dragons when they were just lizards. What is going on in the US today is the exemplar how NOT to run anything.A continued failure to deal with the biggest real issues and their root causes.JLM.Disqus misbehaving today.
Well said. There’s a tendency for too many platitudes in modern life/business.Apt timing re: Thatcher’s death today – I have very mixed feelings about her as whilst I respect/ed many of the radical changes she ushered in to the UK and its hitherto staid way of life, society was very much launched into the “I’m alright, Jack” mindset of greed and meme venal business practices, by her. Also, as we live in a Yorkshire former mining village, which was at the centre of the 1984 strikes and riots, feelings around here are very sensitive. There will be parties in many of the village pubs, tonight. I jest not.But, she addressed the uncomfortable issues and wasn’t bothered about being unpopular – huge respect for that. Yes, she was flawed – all great leaders are – as is everyone.
Mike Bloomberg told me about her passing this morning. He reminds me of her.
Wow, really? Interesting. Over here we don’t really get to see his persona and modus operandi.
In what way? While both leaders-Thatcher was more like Reagan (or Reagan more like her). I don’t see Bloomberg as a Reagan type politician. He was a tremendous businessman though.
Bloomberg is hard to pin down in previous terms. he’s truly the modern meaning of technocrat though (down to the sweaters)
I would need some fleshing out on that one. Very interested to see what connections you find.
Felt I had to blog about it on same day…http://carl-rahn-griffith.t…
Glad you did. Great post.
Thank you, Donna!
I saw this tweet from Mayor Mike yesterday …thought of your influence on him….Mike Bloomberg @MikeBloomberg17hLearn to code! @GoRuCo is offering scholarships to NYC students to attend the RubyCentral Conference. Details: http://bit.ly/ZioKzP
.I am a huge fan of Baroness Margaret Thatcher and mourn her passing.The world will not see another like the Baroness — ever.She and Reagan changed the world, their countries and defeated Communism.Not a bad day’s work for a green grocer’s daughter, no?God bless. Godspeed. Well played!JLM.
Sometimes – often! – it takes someone from outside one’s own country to see the true perspective – a fair assessment, JLM.
The only summary of Thatcher’s career I’ve ever read and agreed with.Freedom good, selfishness bad.
Not every crisis can be avoided of though.And many of them come through spurts of growth. Huge hits on the site. A product that goes viral and drives trembling back down the supply chain for hard goods.I find there’s a real difference in how you manage towards crisis avoidance depending on stage and resources–Boot strap stage, sub $10M and in the red, and on and on up the chain to somewhere around $100M.
.At the end of the day, of course, I agree completely with you, Arnold, and my personal experience has been that a lot of crisis for other folks has been just another day in the life for me. I am not a guy who takes things too seriously and I am pretty damn confident that I can handle anything. Bit too much ego at work there.When you have been in business for a third of a century and before the invention of the PC, well, you learn some stuff.Having said that a worthy exercise for any business is to simply brainstorm — OK, look where we are today and let’s discuss and plan for what can go very wrong and very right. Sometimes just talking it through is enough to blunt the bleeding edge of many a crisis.A Board of Directors should plan for losing its entire management well before that happens. You are talking about an hour of discussion and planning.One of my favorite things I have ever experienced was when in the Army and we would be doing big bridging exercises crossing a couple of divisions — Rhine River or Imjin River — on the fly. Great fun for the company grade officers.The rafts and the bridge had to be ready the second the armor vanguard showed up to begin crossing. When they were 30 minutes out, you had to tell them to either speed up or slow down.The graders would routinely “kill off” the senior leadership of the Combat Engineer battalion and see if the junior officers could handle the job of getting the armor across and the bridges built.There is nothing as ugly as watching 200 tanks waiting for the rafts and bridge to be built. A career changing mistake, I assure you.I experienced this probably 10 times and every time it worked out just fine because the battalion commander and executive officer had gotten everyone together well before the exercise and rehearsed it all.Here’s a picture of the first tank of the 2nd Inf Div crossing the Imjin River back in the early 1970s. I am the guy to the left of the tank on the raft. I had been given the assignment to get the rafts built because the E Company commander was “killed”.JLM.
Wow.
.Here is one of my favorite pics ever.This river crossing site had had a bridge which had been destroyed in the Korean War and when we were assigned to cross the Division, I went up to recon it. I thought there might be some underwater bridge abutments which would rip the bottoms out of the rafts and the bridge.I was right.I had been to the US SF Scuba School and was qualified to do these kind of demolitions. So me and a Sergeant rigged up and blew the abutments out.If we calculated we needed 25 lbs of explosives, we probably used 250 lbs. Look at the plume.Of course, we also got a lot of fish. It literally rained fish for about 3 minutes.The truck you see here had about a ton of C4 in it.JLM.
Not getting any pics here – as you say, Disqus is playing up, again – somehow the story is all the more powerful for it!
I only saw pictures after clicking “See more” – in case you didn’t notice that; It took me awhile to recognize longer posts started being truncated.
Ah-ha! Thanks, Matt – d’oh!
Ya – it could be done better IMHO, though at same time they’re not wanting them to be intrusive or draw too much attention..
Makes sense. I prefer to blog with just words and have hyperlinks to pics/videos/text rather than embed media live in the actual narrative. Don’t know why. But it must be said, sometimes embedding the pics really works perfectly … has everyone seen this, below, yet? Hysterical, ouch!http://jesuschristsiliconva…
Being in reading mode vs. visual picture absorbing mode. Different modes your ‘eyes’ are in.
I’m not enjoying the recent changes. I feel it makes it harder to go into the comments
I think multiple things could be done better. Hopefully they will hear the same from many and attempt to change it up.
Thanks… I learned as well to build communities and companies before the web and learned to deal with the whiplash of real world beatings.Made me better. I don’t wear my heart on my sleeve but I don’t like to pretend that there isn’t stuff that just stings.Especially when the game you are playing impacts your life economically deeply. So much easier when you can simply walk away and right it off to circumstance, learning or whatever.Cool pic!
Pushing decisions down to the lowest level builds confidence and capability in junior folks while freeing up bandwidth for the senior individuals to think and paint the bigger picture. Something missing in the American business and political landscape
.No question about that. Hope you are well.JLM.
Still trying to get on my feet. Selling cars 6 days a week 12 hours a day. Taking another shot at Amazon on the 12th here in Dallas.
Good luck, Bill.
i can tell you it isn’t fear
I think this is where proper planning can avert many crises – knowing how much $ you need to get done what you know you need to get done, etc.. Of course this comes better with experiencing or tapping into experience.
“No one expects the Spanish Inquisition’ is oh so true.The real world exists at the intersection of what we should do and what happens. Experience creates poise that rolls forward with more controlled intent but shit happens my friend.Business is only perfect on the whiteboard. Smart execution is the best strategy without a doubt.
Smart execution, being prepared, is definitely the best you can do / ask for – and then learning how to get good at rolling with the punches. 🙂
Lizards vs dragons. I love that JLMism. I’m looking around for lizards now.
“Ask yourself — how much of what I consider to be a crisis was created because I failed to act when it was only urgent or important or even earlier?””Every crisis that Fred enumerates had a solution long before it became a crisis.”Otoh business is about deciding what to act on and devote resources to. You can always look back and think of things that you should have done. You can always look forward and think of things you can do to have more safety and prevent things from happening (I’m really good at this for some reason). But if you do that you won’t make any money. What I mean is that if you cover all contingencies and account for all possibilities there will be no profit left. It’s implied obviously that you have to consider and make choices among the risks.I just went away for a week and part of what I do involves making sure I am in contact with some remotely located equipment. Not only did I bring two laptops but I also brought two bootable hard drives, an ipad mini with Verizon LTE service, and more. I located the nearest apple reseller (a ferry ride away) to where I was going in case of any issues or if I needed to buy a replacement. I also made my wife bring her laptop (that’s three). The bootable hard drives could be used in case there was some failure where I couldn’t use my own equipment. I paid for priority seating ($35 extra) on the airline so I could get on early and make sure I had overbin space for my bags so it didn’t need to be checked. (And there was more I did that’s only a brief summary). Guess what? None of that was needed the 1 laptop worked fine but the ipad mini with Verizon LTE service didn’t work at all where I was staying luckily the resort wifi was fast enough to stream netflix if you paid for it. Would I do all that work next time? Yes. Were there even more things I could have done? Yes.Think this is overkill? Well I once had a case where I was going on a cruise ship (in 2002) and I took the time to talk to someone at the company [1] that operated the satellite that the cruise line used for their service to make sure they didn’t block any “ports” or do any other blocking and what the generally reliability of the service was. Not by talking to customer service at the cruise line (clueless I didn’t even try) but the actual higher level technical person who actually provided the service.Because it was important I put in the effort and took the time to do this. (Note, this is not a money loss issues it’s an aggravation and avoiding anxiety issue mainly).My point is that all of this took time and effort. And I had to carefully weigh the money and time issues involved in preventing something remote from happening.[1] This place: http://www.mtnsat.com/mtn-m…
.I think you have made my point. Small businesses have to spend time thinking, thinking, thinking about what goes bump in the night.JLM.
Why do you label this as an issue for “small” business? I see it as an issue for business period.The issue for a small business is that they can’t pass the buck (nor does it matter actually who the owner of the mistake is). A large business can follow a best practice w/o regard to what the reality is since an employee of a large business is in perpetual CYA mode. As long as they do that (in the eyes of others) they keep their job assuming the error doesn’t cause the downfall of the company (which it almost certainly isn’t if the company is large enough).Additionally, and in general, an employee of a small or large business can only get fired or loose their job. They can’t lose more than that! Whereas an owner of a business (a small or large business) can lose everything. A big difference.My point being this is a business issue to me “thinking about what goes bump in the night” although the behavior of the actors is different for different reasons.
.Fair play to you. Yes, I do think of it as a problem more with small business as they have less factor of safety.Once upon a time working with a Fortune 5 company, I was struck by how many people worked in strategic planning — a whole floor or more. I knew because I was building them a corporate HQ.Same thing in the military — hell, we have plans to pick a fight with Canada and Mexico at the same damn time.JLM.
I was waiting for this comment from you.The problem with people who require crisis to create clarity & focus is that they require crisis to create clarity & focus. The cycle is exhausting.
Kill dragons when mere lizards!Love that.Well played sir.
.Think how much comparatively easier the immigration problem would be today if they had secured our damn borders in 2001 — right after the attack on the World Trade Towers.We would have fewer than one third of the ILLEGALS we currently have. A much more manageable number, no?Worse still, nobody really is intending to secure the the borders now even in the face of faux immigration reform.JLM.
Ouch. “…Give me your tired, your poor, your huddled masses yearning to breathe free…”
.Hey, I live in Texas,we are fine with immigrants. We love them. We would trade Mexico for say, Illinois or Detroit — heads up.If it were up to me, I would make Canada, Mexico and the US the Confederation of the Western Hemisphere.But we have to get the drug trafficing in Mexico right. We need to eliminate the cartels.JLM.
I increasingly think that Aaron Burr had it right & puts all subsequent VPs to shame– at least in regard to his Texas/Mexico scheming. Possibly also his tendency to summarily dispatch US treasury secretaries…
“We would have fewer than one third of the ILLEGALS”I wonder though what that would do to the price I pay for lawn care.(Would love to have a anti PC Friday.)
Great perspective nothing worse than people that only act take bold moves in a crisis
planning is only as good as your tests – and they tend to break on contact of a crisis
.In most instances, it is a total complete lack of planning or any intellectual consideration that is the root cause of a crisis.Any plan is better than no plan.JLM.
This is the definition of Systems monitoring/management. Almost everything starts out as an error or alert that isn’t urgent nor important and then snowballs until you can track the lifecycle of an outage that affects hundreds of people back to when it was just an error in an event log. Brilliant.
i like to tempter crisis with confidencewhen things get crazy, i find it best to just remind everyone that “we’re going to live”once you get out of that “we’re going to die” crisis mindset, it’s much easier to think clearly about how to solve the problems at hand
That’s where I start every conversation like this. Except where it isn’t true. Those are tougher conversations.
Tough Love is vastly underrated.
hahaha… well, yeah, no sense in lying..just meant that at a base level, everyone will be fine. they are (in most cases) still good people, partners, parents, friends…
So like good lawyers, good VCs are also good counselors.
you should remind them that they will personally live and that they will not have ruined their career
I wonder what HPs mindset is right now…?
It makes me think of America and the near economic meltdown a few years back.We spent trillions of dollars propping up the US economy, but we didn’t use the crisis well to invest these dollars in building a modern workforce and economic mix for the next 50-100 years. Instead, we maintained the status quo.Anyway, great post Fred.
The money went exactly where it was designed to go.
startups thrive when they live in a state of organized crisis.
You test your mettle as a leader when there is a real crisis. It’s okay to be scared. All leaders get scared. Just don’t make decisions from fear. Internalize the issue, and work with it-then create meaningful action on the other side. #win.
Such an important additional point. Thanks.
“All leaders get scared”. Good reminder.Making decisions in crisis that are not based on fear… I think this sounds like an aspect of courage.It occurs to me that one of the reasons I am so drawn to the startup community is that there is so much courage being acted out there. Or at least the opportunity for courage to be displayed.
Crisis is impetus to force change. It’s only when these pressures build up that the changes that we most fear and have avoided are made to come into our sight.
“Because crisis is what brings clarity and focus.” <- <3, so true … thx, Fred
Same thing as a trader/investor…a blowup in your portfolio is a reminder that the best laid investing plans still dont work all the time…you garden, clean up, reposition and take the loss, report to your partners QUICKLY and than you move on. Opportunties are always leaving the station.
I’m investigating the reasons for a product performance crisis right now, and it’s finally getting motivation in the organization to fix niggling issues that have been an irritant for years.
My experience is that when in the midst of a crisis, people in general look for someone to lead, tell them everything will be okay, and present a plan of attack. For better or worse, George W. Bush was able to utilize crisis to incredible effect during his presidency. He completely transformed the intelligence and security organizations, consolidating them into a new cabinet position, invaded Iraq and Afghanistan.
Jung would say humanity finds its definition only because of a crisis, so you better thank your damn stars you are going through a crisis, because that’s when you put productivity, rationality and creativity to work and build what needs to be born.
Such great advice. Crises become inflection points. I had a mentor early in my career who said, “in boom times it’s hard to tell winners from losers. It’s only in difficult times that those with great management, products & plans really separate from the pack.” That always stuck with me. And as a VC seeing how teams respond to adversary tells me a lot about the character of the people with whom I hope to work for the next 10 years. It’s a real differentiator.
This comment reminded me of this fantastic quote https://twitter.com/davemcc…
Also known as “a rising tide floats all boats”.
Some would go even further and convince you that a management team might actually *create* the crisis, to induce real change.Some claim that Pearl Harbor was deliberately allowed or even created by the US, to pave way for an even more radical, unpopular move.Some would claim “9/11 was an inside job”– or at least @kidmercury:disqus might 😉
Maybe this could work for the US. I saw that there were 88K jobs created in March. That’s 100K less than the lowest of estimates. Also, in March 450K+ people left the workforce.Is there some changes the US could make that could take advantage of this crisis?
.If this administration were to simply fully fund the SBA, develop a coherent energy policy, make the changes to entitlements everyone knows are coming and adopt some serious economic policies — job creation would explode.If on the other hand you continue to operate under the absurd notion that we do not have a spending problem and that the work force participation rate (we are at 1978 levels) is not a more important indicator than the fictitious U-3 crackhead unemployment rate, then you are screwed.JLM.
I’m not so sure the government is the right place for something like the SBA. I think government funding for independent entities/funds could be a lot more effective. Imagine government matched crowdfunding, or a new class of micro-vc/angel’s with the directive to fund good solid small businesses with government LP’s could look like. I think something like that would be much more effective then the SBA.Don’t get me started on our horrible energy policy, we have had good solutions since the 60’s but we lack the will to invest in them.Fix energy and make capital for solid small businesses more available and you are right, job creation would literally explode.
.The success rate on SBA loans is really quite high. Remember they are going concerns, local and already have attained product-market fit.With 22MM sole proprietorships it only takes a few hits to completely wipe out the rolls of the unemployed.Remember the SBA is a loan guaranty program and that top 25% of lenders has a 0% default rate.They already know their borrowers.JLM.
You want crisis? I’ll give you crisis. In the 90’s my co-founder, who brought all of our high-level contacts, arranged our strategic relationships, negotiated key outsource suppliers and had begun lining up our initial investors, went Howard Hughes on me. Addiction to painkillers from a neck injury, along with the onset of agoraphobia, lead him into a type of seclusion where he cut himself off from family and everyone else.
that’s a good one. how did it end?
Sorry I’m a little late responding. My partner remains secluded to this day and I haven’t seen him since. However, it forced me to realize we were headed in the wrong direction. A lot of soul searching lead me to a presentation in 1996 by a guy I’d never heard of (Vincent Serf) and my introduction to this really cool thing he called the “Internet”. Funny how life has these interesting twists and turns.
Disqus sucks! I’m sorry to have to say but I must.I click the more posts (or whatever) bar and it has the posts all messed up. I know Brad Feld says not to outsource unless it’s offshore Fred. But you need to rethink that and get a consultant into Disqus to fix this thing. Also, I think you in-housed the USV upgrade and it’s late. This is a good example of making sure you’re thinking clearly.
i see the same issue ,,thought this was about my laptop,,so had to reboot twice…discus re-patterned my reading process 🙂
they’re apparently changing site behavior – clicking on more causes pagnation
i’ve used disqus here at AVC for six years. there have been a few issues here and there but their track record with me is better than any piece of software other than google search
Then you’ve been using some really bad software! I don’t have anything against the Disqus tool except it’s failings. But, haven’t you been seeing the “What’s up with Disqus today” or “Disqus acting up again” posts?I’ve always noticed that the Disqus team has jumped right on any problems. To me that says the team is a good one. But, it appears that there are many of the same old software issues the industry has faced for years – migrating bugs, one fix causes three new bugs, UI elements appear at the wrong screen location, etc. This appears to show “relearning” of old knowledge.
Its not a simple problem to operate a platform like this that runs on 2mm+ domains and serves 10bn page views a monthSure they fuck up. Everyone does. But in think they do a great job overall
That’s not a fair statement. It’s not cool to diss Disqus like that, as it shows a lack of appreciation for what goes on behind the scenes to make things work at this scale.As a Disqus advocate, I take issue with the harshness of your statement. They know what they are doing, and their track record shows they resolve any wrinkles that come a long the way.Don’t let a fly on the ointment ruin your experience here. Let’s be more tolerant. This is the wrong community to air your Disqus grievances because the overwhelming majority will support them.
Good advice. 🙂
Growing up, my father (who was an importer of giftware from Israel) used to sell more products inevitably whenever there was a conflict in the middle east that made the nightly news and drove patriotism.
I agree with the statement about people keeping things under wraps. One problem with smart people is that they tend to bunker down in bad situations and try to find solutions/ Sometimes the best thing you can do is embrace the issue in public to try and find a solution that way.For example, if consumers hate a change in your product, it is probably best to accept this and ask them why/how it could be better rather than shutting yourself in a dark room while you try to come up with a fix
You have full insulation right just more would do so.
Case in point happening in my hometown of New Orleans.http://www.theatlantic.com/…
Crisis generates emotional power. That can cause chaos and consternation. But with leadership and vision, that power can be harnessed and used to drive change. The trick I’m finding is that the emotion dissipates. So it is important to think about the structures we create in response to crisis as it is the answers to the particulars of the crisis itself.I’m thinking about this every day in the aftermath of Sandy Hook…
Love, love, love posts like this. Maybe, in part, because I am no stranger to crisis and it is encouraging to hear how others have dealt with crisis, to be reminded that it has a purpose and that it can be used to advantage. But, also, because I know how much I and others need to hear this!What Albert says about crisis, I say about failure and about pain. I hate pain, but most of my growth has come as a result and I like growth, a lot.I say that if you want to know the measure of a person, find out how they have managed crisis, overcome obstacles. Success is not always what it seems.I would love to hear more of the stories you have shared above. Is this more the reality of what happens, the back story to many success stories?
The downfall to this philosophy is that government exploits a tragedy so that their agendas can be solidified and take action upon it. Case in point: the recent gun laws/restrictions due to the shootings in Connecticut which was a sham played out to allow the Gmen to act. Some of those videos shown for Shady Hook were not at that school location, but rather at another. Otherwise, I agree with this line of thinking; it can be used as a motivator to act when indecisiveness blocks advancement & progress.
i am agree with your point
Founders were from the Habitat project, Neil Stephenson was on the board and there was a bunch of Holllywood money in it.
Great Post. Thanks for sharing
WOW!! So this is where Obama and the Democrats all learned their trick!!
Amazing! I completely AGREE with you!
Fear of failureFear of ridiculeFear of discomfortFear of lossVisualization and writing is a great exercise to working through everything. Most of us are good at doing this with positive fantasy, when emotions and feelings are positive and good – yet many of us are never guided nor get used to, never learn to be comfortable with sitting in these feelings and emotions – nor letting out their physical emotional release. It gets easier though the more you practice.
That’s what I always do, also. Follow the scenario through to its worst conclusion and understand how I’ll still be fine. Doing that process is critical for me to free up my mind to make rational decisions about the present.
I love the GoDaddy guy’s quote: “they can’t eat you”
It’s a very hard thing to teach / learn / be guided to let go of. Good luck if you do one. 🙂
Seems like this would be tremendously valuable. When do you think someone would do this — pre-crisis, mid-crisis, post-crisis?
“Fear of failureFear of ridiculeFear of discomfort”If you don’t embrace all of those then you’re not living!
You don’t want to let go of them. They are very important feedback from your brain and are telling you important things. Embrace them. Learn how to use them to your advantage!
.What are they going to do — make you a Second Lieutenant and send you to Viet Nam?JLM.
I mean to let them go from your mind, you’d hold onto them still in your body’s energy – and be reminded of them when the time comes.
Roll one for me!
I don’t smoke.
Your last post made it sound like you do.
Yes that would be a true life perspective. I respect that. Gives you a perspective I never will have
most people don’t live – it’s the Matrix after all