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I have marveled often at the thin line that divides success from failure and the sudden turn that leads from apparently certain disaster to comparative safety.” – Ernest Shackleton
Even on a great day, leadership is full of challenges.
As obvious as that may seem, many of us act surprised whenever the going gets tough. I think it’s because we’re conditioned to erroneously envision the road to success as a straight path. We see or hear about people just getting started (point A) and see or hear about others who’ve made it (point B), then mistakenly extrapolate a straight line of progress from A to B. How easy their journey must have been!
In reality, the path to success looks more like a seismograph measuring an earthquake. It’s erratic, messy, and loaded with peaks and deep valleys along the way. In his book, This is a Book, comedian Demetri Martin aptly illustrated it like this:
Why is the path to success so helter-skelter? It’s because hard things are inevitably challenging, and no matter how experienced or well-prepared you are, you can’t ever accurately predict what lies ahead.
In 1914 as he attempted to reach the South Pole, explorer Ernest Shackleton and his 28-person crew were less than a day’s journey from the Antarctic coast when ice trapped their ship, Endurance (point A). They drifted with the ice for more than two years before being rescued and returned to England in 1916. Miraculously, everyone survived (point B).
Here’s the mess in-between we tend to gloss over: The crew’s safe return required a superhuman level of courage and leadership from Shackelton, who later downplayed his heroism in his memoir, South. “Difficulties are just things to overcome, after all,” he wrote.
What Shackleton understood and what all capable leaders understand is that adversity is inevitable. It’s how we respond that makes the difference.
One of the privileges of my role as a coach is to witness the challenging, amazing things my clients accomplish and experience as they grow. I see victories, defeats, good, bad, and ugly, tears of joy and sorrow—and everything in between—from multiple organizations spanning industries and geographies, each run by very different people.
No matter how diverse these firms may appear on the surface, they all face adversity one way or another, all the time.
As a leader, it’s important to normalize your perception of adversity, because the more you expect it, the better prepared you’ll be to face it when it inevitably knocks on your front door. To help normalize and illustrate the inevitability and constancy of adversity, today’s article features four of-the-moment client scenarios, each of which occurred within the past 90 days. All these firms are solidly in the middle-market ($100 M+ revenues), are well led, and are profitable.
After the stories, we’ll outline five actions to improve resilience so you and your team can lessen adversity’s unavoidable sting.
This client sells and maintains heavy equipment and machinery, and they’ve run into significant supply issues with one of the manufacturers they represent. If you sell things for a living and can’t get the things you sell, it’s a big deal!
Although many companies experienced some level of supply chain challenge over the past few years due to Covid, this manufacturer isn’t solely dealing with a post-pandemic hangover. Not only has it been unable to recover from the pandemic, but it was also recently acquired by a firm whose business practices don’t align as well with my client’s needs.
My client has several hundred machines on backorder with the manufacturer and very little guidance on when to expect inventory. In short, they’re unable to sell these high-demand, highly profitable machines, to their customers. There’s no end in sight, nor is there any confidence the manufacturer will resolve the issues in any reasonable way.
As a result, my client’s business is operating below their intended plan. They need to decide how to continue operating and meet their goals despite the effective loss of this manufacturer’s product line.
At the scale with which my client operates, this manufacturer’s post-acquisition failure to deliver isn’t something that could have been predicted. And yet, here they are. They’ve had to shift gears significantly and accept that they’re going to endure some short-and medium-term pain to get back on track. They have a plan that’s viable and they’re going to be fine, but the journey won’t be without additional discomfort and disruption.
This long-standing client is in an industry that relies heavily upon lines of credit to operate as part of the business model. A few weeks ago, the bank holding my client’s (large!) credit line sold their loan portfolio to another firm—which, in and of itself, isn’t unusual.
The problem is the new loan-holder is extremely risk-averse and has no experience working with firms in my client’s niche.
As a result, they froze the credit line and informed my client they would not be able to renew it at term. The frozen line of credit effectively limits a portion of the firm to operate at about 25% of its capacity, severely handicapping a growing, profitable, well-managed, and properly leveraged company.
No one without a magic crystal ball could have reasonably predicted this scenario.
Rather than focusing on pursuing their strategic agenda, they now have to shop for a new lender. It’s a big distraction for senior leadership.
The good news is this problem isn’t existential—they’re extremely credit-worthy and will find a lender—but they’re essentially running a fire drill at a very large scale. Their story is a painful example of how adversity can—and will—strike even when you’re doing everything right.
This client is a tech firm with an impressive, well-led sales team driving their growth. About a month ago, one of their more senior, accomplished account managers independently decided to fraudulently overbill a client.
The project the account manager was running came in significantly under the hours budgeted, but he billed it for the full amount in the original estimate. When leadership realized what happened, they acted swiftly and decisively, firing the employee within 24 hours.
Although this was absolutely the right decision, they were immediately put in the position of salvaging a large, growing, profitable client relationship and backfilling the senior account manager role.
As with the previous stories, this scenario couldn’t have been reasonably predicted. The account manager didn’t have any history of unethical behavior or poor decision making. Quite the opposite: They were a tenured, trusted, high-performing team member.
The firm is going to take a hit as they rebuild trust with their client and replace the account manager’s capacity on the team. They’ll recover, but it’s an unexpected, frustrating, and painful setback.
This client provides professional and project management services around the globe and is an independently operated subsidiary of a larger firm.
Earlier this year, the parent company made some business decisions that resulted in the enterprise becoming undercapitalized—that is, they didn’t have enough cash on hand to manage the normal operating flow of the business. This condition is similar to my other client’s frozen line of credit, but resulting from a very different (and self-inflicted) cause.
When a business struggles with cash flow, they often “rob Peter to pay Paul” to keep themselves afloat, which—through no fault of their own—is exactly what my client (the subsidiary) had to do. They have good-faith relationships with contractors and suppliers all around the world, and suddenly they found themselves unable to pay and having to manage through the crisis—while still keeping their projects on track.
True to the pattern, there’s no way my client could have reasonably predicted this disruption to their business. Nevertheless, they’ve found themselves dealing with it.
This too shall pass, as the parent company is re-working their banking relationships and will soon be properly capitalized once again.
Although none of the misfortune in the stories above could have been anticipated or predicted, you don’t need clairvoyance to buffer adversity’s inevitable impact. This is why each of my clients is moving past their business disruption enduring only short-term pain rather than an existential threat.
Like my clients, you can build resilience in advance of needing it. Each of the following five actions will improve your resilience through the ups and downs of your firm’s journey from point A to point B.
This is a concept outlined by Jim Collins in his book, Good To Great. The message is to avoid operating your business too close to the margins. Ask yourself: How much do we have in reserve for when something goes wrong?
This isn’t just about having a financial emergency fund—it extends to all domains of your business, including risk management, staffing, overreliance on certain customers, and more. Cash in the bank won’t help much, for example, if your top salesperson quits tomorrow. Instead, you need a reliable talent pipeline or perhaps even someone waiting in the wings to fill that role.
Where in your business do you need spare oxygen?
It’s relatively easy to play the “woe is me” game—especially when your adversity comes from a factor out of your control (as was the case in all of my clients’ scenarios). But you cannot allow yourself to be a victim.
The moment you start feeling sorry for yourself or blame others, you hinder your ability to drive forward to a solution. The best perspective is to view any adversity as an opportunity to learn and grow.
Take some responsibility—regardless of the circumstances—and use that as motivation to improve.
This is another concept coined by Jim Collins. Big tech leaders like Steve Ballmer at Microsoft and Andy Grove at Intel were notorious for actively looking out for what could go wrong.
Entrepreneurs and leaders are often told to have a positive mindset, and although this certainly has its place, it isn’t universally sound advice. Yes, optimism can serve you, but leaders should avoid being overly optimistic. The reality is that everything is not always great, there are risks associated with every decision, and as we saw above, bad things happen due to uncontrollable circumstances.
There’s nothing non-entrepreneurial about being productively paranoid!
Be cognizant of the company you keep, both internal and external to the firm. This necessarily includes your professional advisory team and your professional networks.
Here’s why: When things go wrong—and they will—you need to have the right people around you to help you figure it out and recover. You never want to be in a position where the spotlight finds you and there’s an audience looking up expectantly at you alone to solve an existential problem.
When adversity rears its ugly head, put yourself in a position when you can circle the wagons with smart people and figure it out together.
It doesn’t matter if you’re the CEO of a billion-dollar firm or an entrepreneur with one employee; all of us are personally vulnerable when enough things go wrong. We’re only human, and if you add enough weight to anyone’s shoulders, they’ll eventually break.
I’ve seen this type of overwhelm lead to some pretty dark places, including family issues, substance abuse, and even suicidal thoughts.
It’s important to realize that struggling to handle the pressures of leadership is NOT a marker of inadequacy. Some of the most impressive leaders I know have someone who’s completely disconnected from the business on speed dial for their mental well-being.
As a coach, I can support my clients to an extent, but over the years I’ve referred more than a few to psychologists who provide an additional, highly qualified layer of support.
When the weight of your leadership moves beyond the norm, find the help you need.
“It’s your reaction to adversity, not adversity itself that determines how your life’s story will develop.” – Dieter F. Uchtdorf
Fortunately, none of the scenarios I shared jeopardize the ongoing viability of my clients’ businesses. But the potential was certainly there if not for their resilience!
It’s likely the adversity you’re experiencing in your business at this moment isn’t going to ruin you either. But tomorrow, next month, or next year it could. Without the proper mindset and actions to improve resilience, the inevitable speed bumps of adversity can feel like mountains standing between you and your goals.
Normalize your perception of adversity, which is inevitable in any worthy and challenging endeavor. Then focus on the antidote: resilience, which is among the most valuable traits you can possess as a leader and build within your firm.
As you pursue the five actions to improve resilience, you and your team—like my clients—will be better positioned to overcome any challenge you face.
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