In order to stay afloat, sometimes it is necessary to sink the ship. It may be a daunting decision, but as the “Captain” you are required to take charge. As the industry changed around me, I found myself in the position to make this difficult decision and and here is what I learned from the experience.
Chart a clear course
One of the undeniable traits of an entrepreneur is the ability to be flexible and adapt when necessary. Being able to identify when to move in the right direction, or pivot in another, will leave you in goodstead. I’ve learnt that if it’s worth pivoting a littile, it’s probably worth pivolting a lot.
Leave the harbour
Once you’ve established the direction you are heading in, it’s necessary to look for investors whose domain and experience will enrich your growth. Having the right support and backing will put new wind in your sails.
Find true north
It’s hard to overstate the importance of culture in a transformation. At the start of a transition, it’s vital to allocate time and energy to clearly defining your mission, vision and core values; an ethos may be something that is sensed but not necessary articulated.
As you progress, you may start to lose your bearings. There will be pressure from stakeholders who want to know what your plan is and what what you anchor points are – beyond being profitable and pleasing your investors. In response, make your values official, via an exhaustive exercise wherein you listen to employees. At Lifesize we came up with four central tenets – act with integrity and authenticity, lead with customer obsession, drive relentless innovation, make every day matter – and their associated behaviors. The resulting philosophy strongly centered us and won high internal praise from the staff.
Assemble the crew
Staff reduction is the most difficult task you may face as a leader. However, sometimes the facts are undeniable and you have react to market circumstances. Over the course of three years our headcount was reduced from 550 to 250 and our annual operating expenses from $142 million to $52 million. It was an act of right-sizing as opposed to downsizing. Yes, some of the departures were gut wrenching, but if we hadn’t streamlined, none of us would have a job today.
As our old identity fell away, we started attracting different types of employees: folks who were more aggressive, who thrived on the fast pace, who took more risks, and who were willing to work for equity. This was a stark contrast to folks who gravitated toward the perceived stability of a global conglomerate.
In hindsight It’s not easy to let go of the old way of doing things, but learn from this old sailor: it’s better to take a risk in uncharted waters than ride a sinking ship to the bottom.
By Craig Malloy, CEO, Lifesize