Photo by Alice Donovan Rouse on Unsplash

Dear Reboot: Managing Burn Through Uncertainty

This article was co-authored by Jim Marsden

In our Dear Reboot series, Reboot coaches aim to provide guidance on common leadership dilemmas. If you’d like to submit a question to be considered for our Dear Reboot column, email us here.

Dear Reboot,

I run a venture-backed company that had been planning our next fundraiser for later this year. I realize that the funding environment will likely get tighter, how should we be thinking about our burn? Should we reduce our overhead and focus on survival? What happens if we do? What happens if we don’t?!? Do we sit tight and gather more information first? Or make cuts and move toward profitability? What about our people and culture? I feel unsure about what to do and I feel unsure of myself as a leader. My team and investors are looking for direction and I’m struggling to come up with the answer. It’s super challenging!

With gratitude,
Anonymous

Dear A,

In a non-pandemic, economically stable environment, you might solve this problem by aligning your goals to what you can reasonably predict for your financials (income and expense), mapping goals to a plan, and then adjusting your capital allocation to support that plan. However, how do you make decisions about the future when you don’t know the timeline of the shutdown, the impact on the funding environment, and what the world at large will look like when we come out of the other side?

There is so much uncertainty that the traditional problem-solving method is like throwing darts blindfolded. It’s hard enough to put together thoughtful goals, a plan, and an asset allocation strategy when there is certainty. However, it’s impossible when there is none. So let’s first agree that we’re not in Kansas anymore and we need a different playbook for making decisions with so much uncertainty.

Secondly, you may be feeling quite a bit of fear right now and if so, you’re not alone. Feeling fear in and of itself is not a problem but when it takes the wheel in your leadership decisions, it can cause you to become singularly focused on survival and lead to potentially disastrous decisions. When fears, worries, and concerns are overly abundant, we tend to focus on making sure bad things don’t happen, and we can miss opportunities to create and bring forth more of what we’d like to see. And while survival is important, making decisions aligned with the purpose of the company (the reason it exists in the first place), and the quality of company culture after survival is equally important and needs to be taken into account.

For example, we’ve all heard about companies that have recently taken drastic measures to conserve or stockpile cash in exchange for gutting their culture, laying off a large percentage of the company, working the remaining team to the bone, and destroying customer relationships. While these companies might survive this pandemic according to their balance sheet, they may have inadvertently destroyed the soul of a company in the process. Even on the other side of our current global situation, these moves may help carry the business through in an overly simplified financial way, but there will be negative lasting effects that will be hard to overcome. So let’s also agree that decisions through this pandemic need to be more than just about survival.

We’d like to propose an alternative framework for making decisions during this pandemic that won’t solve the uncertainty or the fear, but it will enable you to make clearer and more intentional decisions while preserving the soul of your company in the process. That framework is based on the one thing that you can use as your guide, who.

Who as Your Guide

While we don’t know what we’re moving toward or how to get there, the one thing we can be certain of is who we want to be as leaders and who we want to be as a company through this crisis. Who is a choice that you can rely on regardless of the pandemic and economic impact. Who is a choice you can make and own. Who can be your guiding light through the darkness.

While who isn’t a destination, it can be a very helpful grounding element in the face of uncertainty by providing three key benefits:

1. It provides you and your team with clarity and grounding in times of uncertainty
2. It moves your attention beyond fear and survival by refocusing your attention on where you have agency and what actually matters for you at this time
3. It helps bring the “how” into clarity by providing a filter for how to operate and make decisions in the uncertainty. The “how” aligns with “who”.

To help make our point, return to the original question in this article and take a moment to reflect on the following questions:

• Who would you like to choose to be as a leader through this crisis? An understandably stressed and anxious version of you, or a more resourced, confident, and grounded version of yourself?
• Allow yourself to connect with a past challenging time when you and your team were all at their best. A peak experience, that you’re proud of and that you found rewarding:
• What qualities do you notice were present with you as a leader?
• What aspect of yourself then would you like to have present with you now?
• What made this past experience rewarding for you?
• How might you bring your insights from the above alive in your current situation?
• What support or help would you ask for? And from whom (leadership team, coach, partner, friend, mentor, etc.)
• What do you want to stand for as a leader?
• Who would you like to choose to be as a company through this crisis?
• What do you want to stand for as a company?

What do you notice? Given your answers, what insights might be available that weren’t here before? What new possibilities might arise for how you approach your burn question?

We’ve seen many companies use this framework to make really thoughtful and creative decisions in recent months. Here are a few examples:

• One organization recognized the need to reduce the size of their company that would lead to a significant number of layoffs. In the absence of who, what would have taken place was a mechanical reduction of people to align with a spreadsheet. Instead, and from first turning toward who, they reconnected to the values and culture they have and continue to cultivate now and through this crisis — including the respect they have for all employees. Aligned with who, they prioritized the well-being and dignity of their people in the layoffs. Their goal was that those leaving would be treated honorably, able to face their families with dignity, and feel they were treated fairly and with respect. While still a painful process, after the reduction, the overwhelming reaction as recorded via social platforms was appreciation and gratitude toward the company. While that wasn’t the goal, this move strengthened their brand in the talent market. It also deepened their relationships with those on the team that stayed by setting a standard for how employees are treated.
• Another organization decided they’re a company who treats their entire organization as equal leaders that all share a stake in the future. They opted to answer the burn question together. The leadership team presented the cash flow problem to their organization and asked for solutions. To their surprise, many individuals without families and who felt they could weather a change in their income volunteered to take pay cuts while others offered to furlough. This move helped solve the short term cash problem but more importantly, it brought the team closer together and they’re now working better together than they ever have.
• A third organization lost a sizable percentage of revenue due to the lockdown. After they turned to who, they decided they would be a one for all and all for one as an organization. So they committed to their team that they wouldn’t make any changes for four months. Additionally, in their ongoing commitment to all, they provided a plan of action after those four months with a variety of options as to what will happen based on different outcomes so their team knows exactly what is going on and what will happen when. Their team is feeling taken care of, safe, and shares a clarity that is bringing them closer together. The safety and certainty are also creating the conditions for creativity amongst the team and they’re finding new ways to generate revenue for the business that they hadn’t previously considered.

There are many more stories to share but as you can see, each of these organizations answered the burn question differently based on who they saw themselves to be through this crisis. While the goal of doing so was to help inform decisions, the positive impacts are undeniable.

So to return to your question, we don’t know what you should do nor does anyone else. Instead, we invite you to take a pause, turn inward and let yourself reconnect with purpose, recognize what you are actually for at this time, and the values that when present, help to bring out the best — in you and those that you lead. Make the choice, first, who you want to be as a leader and who you want to be as a company, and let this help you to navigate the path forward. We trust that this framework will help you discover clarity and thoughtful responses to the challenges you face.

Best,
Jeff Riddle & Jim Marsden

For more on this framework, we encourage you to read co-author Jim Marsden’s, three-part series titled Active Reorientation — Befriending Fear, Discerning What Matters, and Bringing Agency in Times of Uncertainty.