How a liquidity ‘crisis’ got us closer to our purpose
It’s 5 am and I can’t sleep. This rarely happens, but when it does it’s either because I’m really excited about something, or I have too much to think about. This time I suspect it’s both.
Last Thursday I wrote a post that summarised our first two months of TEAL which included lots of positives, but also highlighted that recent growth has left us lacking structure and direction. It felt like we were working in silo’s instead of working together as a team. I ended the post excited about a planned team building event over the weekend to discuss purpose… But that didn’t happen. And ever since it’s been a bit of a rollercoaster. Let me walk you through it.
A few big things are going on. I already mentioned that lack of direction thingy. But at the same we’re also looking at issuing new shares, so employees who are interested and able can buy a stake in the company. This will distribute ownership, but also provide some much needed cash to get us through the summer months, which are notoriously slow in the Nordics.
We had a good equity discussion on Thursday, but realised that we needed to a more detailed cashflow analysis to understand our liquidity. Sofia had prepared an initial one, but we agreed to revisit it over the weekend and overlay it with an updated sales forecast. I’ll get back to this one.
On Friday, we realised that too 3 out 0f 9 couldn’t make it for our team building event, and we decided to postpone the purpose discussion. I was really disappointed. I felt that if our biggest challenge is that we’re not adequately working together as a team and we can’t even find time to talk about it, that we might have bigger problems. I started doubting my own and my colleagues engagement, and questioned whether it was worth investing in the company. In retrospect I might have been overreacting, but nonetheless it was how I felt. I usually start my mornings writing a journal. And that Friday I felt like sharing the journal with the team. I described how I was sad and disappointed, and worried about our future, and urged us to try to find a solution. The response was overwhelming. Some responded with similar concerns. Others responded with a list of all the positive things going on. I had wonderful one-on-one discussions where we got closer to the root problem and identified misunderstandings. By opening up and showing my vulnerability, others felt they could do the same, and in a very short period the sadness and disappointment was gone. We even agreed to discuss purpose again early this week. But that didn’t happen.
Well at least not in the way I expected. Instead we had liquidity ‘crisis’. Monday we updated our sales prognosis and realised that summer was looking worse than expected. We adjusted the cash flow analysis and came to the shocking realization that we would be very bankrupt in only a few months. (Funny side note: This is not the first time this happens to me. About one year ago I wrote the blog Bankrupt in 117 days, which described how I saved my company from the exact same situation). We looked at the numbers form all angels, and something didn’t feel right, but we couldn’t find any errors. We started drafting scenarios for re-focusing our efforts, dropping our salaries, and without saying it out loud we probably also considered if we needed to let people go (being on of the last ones in, I would probably be a good candidate). Needles to say we all went home with a bad feeling in our stomachs.
But that was Monday. Tuesday we looked at it with fresh eyes and realized the numbers were wrong, and it wasn’t at all as bad as we thought it was. A simple mistake, but one that made all the difference. So the crisis was over, but it already had people thinking. What type of company should be? What do we do with resources who are not billing? Shall we focus primarily on consulting to make as much revenue as possible? Or shall we spend time on internal product development which impacts the result short term but creates a future potential?
These were questions we were planning to talk about, but the liquidity ‘crisis’ forced them upon us. Suddenly it was real. In a crisis we let go of our masks and become our true selves, and our values become clearer. So in a way, a small miscalculation allowed us to deeper investigate our purpose. We had a good talk where we shared our dreams and ideas for potential purposes: Keep having fun. Work on what you like. Build cool shit. Enable decisions through better intelligence. Prove that Teal can deliver great results… We didn’t land anything, but at least the ball is rolling.
The ‘crisis’ also uncovered a need. A product idea. While working through the numbers it was clear that we needed better access to transparent data. So we started building a dashboard for ourselves which showed our financials, our liquidity, our salaries, our sales pipeline and our latest defined purpose. This is information we need to be able to make good decisions as a self managing team. It’s value became evident, and we started asking ourselves “If we need this, wouldn’t every self-organizing organization need something similar?” “Wouldn’t every organization need this?” We already do this on a consulting basis for large companies. But what about every small and medium sized company out there? Could we turn this into a product? Sell it as a cloud service?
It’s not the first time we’ve had this idea. We’ve actually talked about it for quite a while now. But now that we’ve built it for ourselves, suddenly we have a prototype (see the cover picture for this post). It’s something we can lab with and iterate towards a final product. And it’s pretty exciting.
Could it be that we’re aslo evolving towards a purpose? In Reinventing Organizations, Laloux talks about evolutionary purpose as something the organisation senses and gravitates towards. A world (or a market) need that we’re best suited to fulfil. We believe in self management. Self managing teams need access to transparent data. We’re data wizards, and we wan’t to build cool shit.
Perhaps our next purpose will be: “Enabling self-management by providing access to transparent data?” Perhaps? Only the future will tell :)
