The Chinese word for “crisis” is often cited by management gurus as “being composed of two Chinese characters respectively signifying “danger” and “opportunity”.” (Wikipedia) The Wikipedia article goes on to say this is “largely incorrect,” and credits John F. Kennedy with having popularized the idea by stating it often in 1959 and 1960. Regardless of the accuracy of the statement with regard to Chinese idiograms, it’s worth considering how similar things we perceive as “danger” (or, more commonly, problems) and “opportunity” are.
Most of us are inclined to default to thinking about problems as a different thing entirely than opportunities. Problems are the things that might put us out of business, like losing a customer or a key vendor. Opportunities are the things that are going to take our business to the next level, like making a sale that will double our business or hiring someone with “next-level” talent.
However, it’s worth looking at what problems and opportunities have in common:
They’re often not as significant as they seem. It’s easy to forget that adding a new customer will come with costs. And losing one will often free up resources that could be put to use elsewhere. Optimism and pessimism alike run to excess and cloud our ability to calculate what effect a business development will really have on the bottom line. The tendency to underestimate costs when embarking on a new project (a new major customer is almost always a new project) is well documented. Boeing’s 787 Dreamliner project was supposed to cost $6 billion and instead cost about $32 billion, so it’s taken years for the plane to even approach a break-even point for Boeing, let alone make a profit.
Both require careful planning. I asked a restaurant owner once what his thoughts were when he saw a tour bus pull up unannounced at his restaurant during a lunch rush. He said “ka-ching!” A worthwhile and optimistic sentiment, but his line staff may have had different thoughts on those occasions. An unexpected opportunity requires planning to execute on, fully take advantage of, and scale effectively. It’s not coincidence that businesses have often failed soon after major orders have landed: their ability to operate efficiently (i.e. make something for less than they charge for it) may have been outstripped by the sense of urgency in fulfilling the order. Combine that with the tendency to underestimate costs mentioned above, and it’s a deadly combination for small businesses.
A problem or downturn also requires planning in its aftermath. Even better – a “fire drill” of sorts when things are going well. What would you do differently if you lost a key supplier, customer, or employee? Why not do some advance planning in case that happens?
Both will put a strain on your team. Obviously, reductions in business make employees fearful of job loss and reductions in pay and benefits. Less obviously, increases in business and other opportunities can make employees (and even business partners) fear change. A change in workload. A change in the job skills required. A change in the company culture. So be mindful of what signals you’re giving your team during periods of change.
Some suggestions for managing problems and opportunities:
Consider getting an outside perspective. Find connections in the industry who have been through it, or been there and done it. These connections can often be made at trade shows and industry events. You may also find that some of your staff has experience with some of the things you’re going through, if they’ve worked at other companies (especially larger ones).
Consider contracting and outsourcing to dampen some of the effects of rapid growth (or contraction). You may find that you need a little bit more help to get through certain periods, but cannot justify a full-time permanent hire.
Nectar Bridge can help with business problems and opportunities. Contact us for a no-obligation discussion.