How to lead your team through crisis

Interview with leadership coach Dane Holewinski

Jane VC recently sat down with Dane Holewinski, founder of leadership coaching company Decode. Dane is a former CEO and VC backed founder who works with many early stage startup founders. We’re sharing the highlights from our conversation below.

Q: What are your observations from working with early stage founders during the COVID19 pandemic?

1. Decisions leaders are making now are directly impacting the health of their teams as well as public health. This is not something founders typically have had to grapple with.
2. There has been a rapid shift to remote work with very little lead time to prepare. We’re fueling the plane while flying it.
3. There is an incredible amount of market uncertainty, which creates challenges for budgeting and planning.
4. Founders are looking to extend their runways as much as possible. At the same time, there is a short term shift in access to capital. It is a challenging time to raise funding. It’s a wait and see mode for many VCs, and they are typically working with portfolio companies first versus making new investments.
5. There is a relative shift towards business fundamentals from growth. In the past few years, there has been a big appetite for rapid growth. Now VCs are shifting to looking at fundamentals of the business. Unit economics and profitability matter a lot sooner than we thought they would.

Q: How does this moment compare to prior economic cycles and what learnings can founders use from past downturns?

This time is both familiar and unique. What’s different is the scope and scale of uncertainty. In the past, it was more isolated to particular parts of economy, and more clear what the recovery path looked like. The fact that it is first and foremost a public health challenge means that it’s not clear if some of the macro economic tools will work.

What’s similar?

• Short term freeze in access to capital. Everyone is taking a step back and evaluating the world.
• Shift from focus on growth towards business fundamentals.
• When dot com bubble burst, investors started asking: will these businesses turn a profit in a reasonable amount of time and deliver a return?

Founders will likely hear a lot more of this language as they raise capital.

My advice to founders is you want to hold on during this time period. Take a look at costs and runway. Figure out how to maximize time to drive the business forward.

Always invite founders to ask themselves: don’t waste a good crisis. What are the opportunities that exist now that didn’t exist two months ago? Look at the boogie man in front of you, look beyond it, and see what’s possible. This is the vision that your team and investors will want to hear.

Q: How are you seeing the shift in traction requirements now?

It’s so specific to the type of company you’re building. But what generally happens during downturns is investors are looking for more traction.

In the past, maybe you could raise a seed round on a good idea and a little traction. Now, investors are expecting more. In the past five years, investors have been flexible with the definition of product market fit. I think they’ll be a more strict definition of this now.

Q: How are you seeing founders lean into new opportunities right now?

Here’s an example: I work with a company where content creation is part of the business. Typically it is high end and professional. During the COVID19 crisis, they have thought about how to speak to customers in this moment. They decided to start filming content in people’s homes in order to deliver an experience that was more aligned with their customer’s current experience as well as deal with the inability to shoot from a studio.

Another example: I have a client who decided to give up office space altogether. They solved enough of the issues around remote work and realized the company could work more effectively as a distributed team.

Q: Given the turbulent moment we are in, how are you counseling your companies about how to plan?

First step: focus on how to we work remotely and take care of people’s health.

Second step: figure out how to maximize resources and extend runway.

Third step: ask yourself, what do we think the future might look like for our business? This is going to be very different for each business, whether you’re a food business or a SaaS platform for remote work.

Leaders are leading with a lot less information. One of the best practices has been to do much wider scenario planning.

Q: There has been this rapid shift to remote work. What is your advice to your founders about how to motivate and lead remote teams?

First, create empathy for yourself. It’s hard to be a leader of an early stage company. Then to layer on all the things that are happening with the COVID19 pandemic, plus remote work.

Right now, many founders are in the most intense phases of their lives professionally. If you’re feeling overwhelmed and anxious, please know you’re not alone. It’s a normal response to this situation.

Here are a few tips on how you can support your team:

1. Be empathetic to what team members face working from home. They may have kids and partners home as well. Slow down to allow people to level set and build new processes. Then efficiency can speed back up.
2. Put on a coaching hat. Create good structures and habits, and coach your team members to do this as well. Recognize what routines keep your energy and mindset upbeat.
3. Provide structure. Creating a lot of structure in the beginning helps. It may feel like micromanaging at first, but err on the side of more structure and then evolve from there. Some things I’ve seen work: daily stand ups, social lunches or coffee breaks, use Slack to share priorities each day and report progress each night.
4. Beat the drum. As you create a vision for where you’re going, over communicate it. Beat that drum. Paint a vision beyond the uncertain present. This can keep people feeling inspired in the midst of uncertainty.
5. Be honest. To pretend there’s not muck will damage trust. Jobs are at risk. Don’t totally insulate your team from the reality of the moment. You can actually build trust with your team during this challenging time.

Q: How should founders communicate with employees, investors, customers?

First, recognize the foundation of any good relationship is trust. You’re going to need loyalty from your employees, investors and customers more than ever.

Trying to insulate people from the reality of the moment is a mistake. Acknowledge the uncertainties. This can be done from a state of acceptance and curiosity instead of from a state of fear.

As you’re going to communicate, figure out how you can show up with objectiveness, curiosity and realism. See the risk as well as the potential reward. See the opportunities and the challenges. People are looking for you to lead them through this challenging time rather than pretending the challenging time doesn’t exist.

Q: What are traits of leaders who thrive during these times?

1. Take care of yourself. What are the minimum viable practices for you to show up at your best.
2. Manage your mindset. When we’re in fear, our lens is very narrow. We can’t see bigger picture. We can’t see opportunities; we only see threats. Avoid binging on news and social media — they create a fear response in us.
3. Use your heart. Realize the decisions you make will have an impact on people. After this crisis, the world will need leaders who can use both their heads and hearts.
4. Use your head. Things are complex and moving quickly. There aren’t right answers, but you need to make timely decisions. Sometimes wait and see is worse than making hard choices.

Great leaders are good at leveraging support. Getting support to make sound decisions and manage stress is critical. Could be friends, family, cofounders, mentors, therapists, etc. Lean into those relationships so you have a little reflection.

Q: How can a founder take care of herself or himself during a stressful time?

Here are my tips:

• Turn off your phone 30 mins before bed. Create some space that enables you to rest and wind down.
• Don’t turn on your phone first thing when you wake up. Instead get up, drink a glass of water and do something for your body. It could be 30 seconds of jumping jacks, a little yoga or a short walk. Then do something for your mindset, for example meditation or breathwork.
• Finally, write down the three most important things you need to do that day.

Then you can turn on your phone and get on with your day.

Q: What suggestions do you have for founders who are starting to fundraise, knowing that they will have to manage a remote process?

Start with your network and leverage them first. It’s hard to build the trusting relationships necessary for fundraising in a fully virtual world. You could have an existing investor join the intro call if they have a longstanding relationship with a new investor.

Unfortunately, privilege can get exacerbated in these moments.

If you’re meeting someone for the first time virtually, you could acknowledge that this is a non-standard way to build a relationship. Ask them them what you might be able to do to get to know each other to create a deeper relationship. Have some things prepared to offer in the moment.

Q: What do you recommend founders look for in a coach?

I think coaching is one of the greatest investments founders can make. A coach is someone that you fully trust with your full truth, who can support you through good and bad.

Ideally it is someone who has had experience being in your shoes. When I was a founder, I wanted a coach who had been a founder.

Make sure there is strong chemistry and capacity for trust. If you’re not comfortable sharing fears and vulnerabilities, then keep looking until you find someone who you can share the depths of who you are. Good coaching is built on trust. The deeper you’re willing to go, the more potential you’ll unlock.

Dane Holewinski is founder of Decode, a leadership coaching company. Dane is a former CEO & VC-backed founder whose passion is helping entrepreneurs achieve their potential and leave a lasting impact on the world. He strives every day to be his clients’ most trusted partner on their journey — supporting them in the darkest valleys, challenging them to peaks they thought unreachable and holding them accountable so they grow faster than their companies.

Dane’s coaching is grounded in the latest scientific research, coaching best practices and deep operating experience. He is a former strategy consultant with over a decade of experience building technology companies in Silicon Valley with lessons and battle-scars from successful exits and failures. He believes in the power of practice and draws on meditation, exercise and breathwork to maximize the impact of his work.