Jim Marggraff — April 1, 2019 — April 1, 2019
As a business leader, you’re bound to face turbulence — whether it’s financial, technological, or sociopolitical. How you handle these challenges is the true test.
At some point in your new business, you’re going to run into turbulent times. You might discover your product isn’t as successful with your target audience or perhaps that the economy has taken a turn you weren’t expecting.
However, you created a company to meet an underlying need and to make a positive impact. So the moment you gain new information that challenges your success, there are two paths you can take: You can either ignore it — or lightly consider it and forge ahead — or dig deeply into the information and reassess your foundational business assumptions. Then, you can courageously implement the changes you need to make for your business to survive and grow.
As a true leader, you must do the latter. Your first step is to identify the type of turbulence your company is facing.
When Turbulence Lies Ahead
Turbulence tests the key tenets of a founder’s mindset, which is all about identifying problems and finding creative solutions. When you face this challenge head-on, you’ll emerge with new ideas that might be unlike anything you were chasing before. You might even decide to shift your whole business toward a completely different set of ideas. But the way in which you approach these challenges depends on the type of turbulence you’re dealing with.
There are three types of turbulence that can rock your business to its core: financial, technological, and sociopolitical.
• Financial turbulence: When markets change suddenly, it can be truly devastating. As I was heading to my first meeting for my Series B financing in September 2008, I saw a scrolling billboard that said, “Lehman files for bankruptcy.” My legs stopped, and my heart nearly followed. At the meeting, my potential investors assured us that this wouldn’t affect their operations. But it did, and they placed new investments on hold for many months. In that same time period, Silicon Valley’s Sequoia Capital gave its infamous presentation suggesting that people hunker down and cut spending during this period of financial uncertainty.
Our new product was on the market, and it was sizzling. But within weeks, buyers were being laid off at retailers, and the buyers that did keep their jobs were cutting product categories and inventory. Our product was in a brand-new category. Buyers didn’t want to take risks when their own jobs were on the rocks.
This is one way financial turbulence can lead to a complete breakdown in your product or service. Wall Street’s troubles can impact your business in a matter of weeks — if not days. It will be outside your control, and you likely won’t see it coming. We approached this turbulence by making workforce reductions, reprioritizing development efforts, and evolving our fundraising presentation.
• Technological turbulence: When you’re working to unlock your next phase of growth with technology, a new technological problem might thwart your plans. This requires deep rethinking — and possibly a pivot. As rapidly as a new idea or technology emerges, another follows. In turn, each could create an entirely new set of problems to solve.
In a world of more than 7 billion people, hundreds of millions create new, meaningful ideas continuously. These people and their ideas can connect online, as intelligent agents and improved searches allow people to learn about and leverage new ideas instantly. We’ll continue to see exponential growth and breakthroughs because of this. Businesses will also compete with each other more aggressively to capitalize on advantages or leapfrog over one another with advancing technologies.
• Sociopolitical turbulence: Companies should also be prepared for sociopolitical issues. More people are concerned about privacy today than ever before, and this issue is right at the heart of Facebook, Apple, and other tech companies’ hurdles. Business leaders cannot simply take their bottom lines into account; they must also think of users’ needs. Failure to adapt to these changing realities means losing customers’ trust and empathy.
Showing Leadership in the Face of Change
In business, it isn’t a question of whether you’ll face turbulence — but when you’ll face it and how you’ll react. Here are four approaches that should help you handle upheavals properly:
1. Reassess the problem you’re solving. Whether you’ve run into turbulence or are just working on the next step in your business, always understand your “why.” This will help you reidentify the problem you’re solving, the reason the turbulence exists in the first place, and the characteristics of a solution.
Knowing your “why” will help you discover your true problem statement — or “problem to solve.” When clearly articulated, the right problem frequently presents its solution as well.
2. Embrace the nemesis. When my team and I were developing a smartpen (which allows you to record audio while you write and synchronize that audio to your writing), one of the first issues we ran into was that each time the pen touched paper, it produced an awful bang noise in the recording. This was caused by the ink cartridge hitting the inside tube of the pen’s wall.
Our team brainstormed a huge list of potential ways to prevent this slamming noise, but nothing worked. Each potential solution either risked the pen not working correctly or not filtering the noise at all. I was desperate for a solution, so I finally leaned into the challenge and embraced the idea of holding the pen’s cartridge against its inner wall on purpose. If the cartridge didn’t slam, I thought, we could eliminate the banging noise. I called my vice president of manufacturing to present this idea, and he instantly said: “Use a magnet.” That was the aha! moment. I grabbed a tiny yet powerful magnet, taped it to the outside of my prototype, and tested this idea. It worked.
To find a solution to a vexing problem like this one, try leaning into the challenge — or embracing the nemesis — rather than fighting it. You’ll come up with some surprising solutions when you shift your mindset in this way.
3. Practice empathy. Did you know that companies whose leaders have sharp listening and empathy skills perform over 40 percent higher versus those who don’t?
If you can’t be empathetic, you’ll lose both employees and customers. Your employees will stop feeling motivated to work for you, which could lead to resignations. When employees feel anxious, they’re not thinking about the impact and value your company brings to broader society. This extends beyond the office. Your customers — especially in the case of sociopolitical turbulence — might simply stop using your product.
A leader’s empathetic actions speak much louder than his or her words, so make sure you’re aligned on all fronts.
4. Test, retest, and challenge your assumptions. With each significant financial, technological, or sociopolitical challenge — or any major change in the world and your market — re-evaluate your assumptions.
We all have assumptions, and these range from base ones about survival to more nuanced ones about life and individual fulfillment. Think about your customer service agents, for example. The assumption has been that we need intelligent agents that understand us and have personality. These assumptions and solutions are changing rapidly. In today’s sociopolitical environment, privacy is a huge and growing concern. Although companies might assume their customers want personalization, they’re re-evaluating this when it comes at the expense of trust.
In times of turbulence, deconstruct your ideas layer by layer and review your assumptions. You might find yourself approaching the bottom of Maslow’s hierarchy of human needs in the process. Don’t be afraid to do so. This will take you to the heart of why you’re doing what you’re doing for your customers, and what you — as a leader — must do to survive and thrive.
Turbulent times can be frustrating and frightening, but they’re also a great time for developing leadership skills and seizing new opportunities. In the midst of the storm, will you take a calming breath and embrace the deep thinking you’ll need to properly navigate and lead your team? Or will you simply ride the surface waves of assessment, be buffeted about, and find yourself on a sinking business ship?
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