197: Rich Manders — Creating Your Plan B Without Panic

Are you thinking about how to grow your business with near and offshore staffing, but you're also wanting to make sure that it's reliable, cost effective, and really well done. I think docsa Talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent, and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have. Talk to docs of Talent and you won't be disappointed. Go to docsatant.com Bill G Again, that's doxatallent.com Bill G One more time. Doxatalent.com Bill G Check it out today. If you have the perspective and make the right moves, you can move from surviving to thriving right now and write your own breakthrough growth story on the back end of one of the worst crisis we've seen in a very long time. A key tool that we use to do this is the Strengths, Weaknesses and Trends tool or or Sweat swt. It's like the well known SWAT tool, but more strategic and centered on trends. What's happening in the world beyond your industry and neighborhood? These are the insights that lead to breakthrough growth and strategy. Are people staying in more how's business being conducted? What's in and what's out? Maybe the travel business will be down hard for a while, but restless people will still need some safe space, staycation or at home activities. Conferences may drop, but video conferencing services and equipment will skyrocket. We're talking in this episode with successful entrepreneur turned coach Rich Manders about how to move through the survival phase into emerging opportunities. Hi, I'm Bill Gallagher, scaling coach and host of the show. This episode is one of a series of five episodes on the five big moves that leaders need to make right now in order to navigate a major crisis like the one we are facing. You'll find this series in about 200 other episodes on leadership and scaling up at our website scalingcoach.com you'll also find downloads of all the tools we talk about and you can even get a free copy of the international best selling business book Scaling up right there@scalingcoach.com scalingcoach.com Listen in now as we talk to Rich Manders. All right, I'm joined now by Rich Manders, a senior coach. He's a successful entrepreneur who's exited. He has enough experience and gray hair to have lived through a couple of crises and downturn. So I wanted to invite Rich on to the show to talk about how to evolve strategy in a time of crisis. Welcome to the show, Rich.

Thanks, Bill. Nice to be here. Yeah.

Where are you today?

I am in Charleston, South Carolina.

Oh, nice. And I'm finally back in the bay after globetrotting for a few weeks. And I know people are. We've been talking about different aspects of dealing with the current change, and this is a particular striking time. And people are freaked out right now, but there's also opportunity when things change. Yeah.

Yeah. Oh, absolutely.

So why don't you just share with us some of your initial thoughts on where strategy comes into, why we want to revisit it. Bit like that right now in. In this sort of time of change.

Sure. Well, as you know, Bill, we're in. The way that I work, and I believe you do as well, is we work with a quarterly rhythm with clients. And so we're right in the middle of helping everybody make their quarter two plans for the time coming up. Yeah. And probably the biggest uncertainty that everyone is facing is what's happening with the virus and how will it affect my business model? That's been a very recurring topic with all of our clients as we make our way through getting everybody's quarter two plans done.

How are you approaching that with them? What do you do when things are uncertain? What tools, approaches, methods, processes are you using with your teams?

Sure. Well, you know, the first. The first one is as part of every interaction we have with the clients, we're asking them to take a look at the SWOT list. So strengths, weaknesses, opportunities, and threats that are facing their business and update it as part of the equation. What's changed since the last time we got together? And for lots of companies, it is a lot of uncertainty around this virus and the financial gyrations that are going on and how will this affect our business? And probably, I would say three quarters of our clients are pretty severely impacted by the virus.

Wow. Yeah.

We have a specialization in advertising and ad tech. And so that's an industry that is potentially going to get hit very hard as either products are not available or people are worried about their jobs. If there's not, people tend to cut back on advertising as one of the first things that they would get involved with. And then in general, almost all the businesses we work with are either national or multinational, and therefore they've got executives and team members that are traveling all over the country or all over the world trying to deliver their products and services, make sales, work on projects, etc. And making sure that they're safe and making sure that their business can continue unimpeded has become a challenge. There's been canceled flights. A number of the folks that we work with have businesses that revolve around conferences where they write a lot of their business or they run seminars or programs and bring together clients, and those are getting canceled or they need to cancel because people are not showing up.

Quite a few of my speaking gigs just got canceled.

Yeah. And so, you know, it has a pretty big impact on these companies. And really the question that nobody really knows is how big a problem is this? How long will this problem last? And so we're spending a lot of time with the clients to try to have a backup plan or that they can work off of.

Yeah.

In our normal work with clients, and this is something that I learned from being in the private equity space for about 10 years, was that we ask all of them to develop a plan for the downside. So we, and I coined this from the private equity firm that bought my business. They called it a gray, dark gray, black plan, where you would literally take your current business model and your income statement and you would recast it with light. Gray would be 10% drop in revenues or sales, dark gray would be 25%, and black would be 50% cut in revenue. And actually create a business plan for each one of those scenarios in advance. So that when you're in the heat of the moment.

10, 20, 50.

Yeah. So when you're in the heat of the moment, you. You're not making decisions in the moment. You've actually thought these things through during peacetime. And now that it's war time, you've got your battle plan. And this really resonated with me because when we were running our business, the first time we hit a recession was 9, 11. This last business that I had, and we had no plan. We didn't know what to do. And we made so many mistakes. We probably. It's a miracle we didn't go out of business. And later on, we made it through that. In 2007, we took in private equity investment in our business. And that was one of the first things they had us do is. And this is 2007, things were still really good. And they're like, you need to make this plan. And we're like, why would I do that? Like, things are great. They're like, no, no, you have to do this. And so we created this plan and we put it in the drawer. And when we started hitting the triggers in 2008 for the recession, we were able to pull the plan out of the drawer and there was no drama. We said, oh, okay, that means we're going to close this location, we're going to let go of this kind of staff, we're going to make these changes to our business. And they had all been pre planned. So there was really much less emotion and a much more logical approach to how we did things. And in the long run that really set us up for success. When we came out of the crisis.

It gave you room to, you survived and you had room to breathe and that kind of thing.

Right, exactly. And things like what are the critical functions you want to keep that would take a long time to rebuild? So in our business we had lots of engineers that had a lot of training. And so when we hit the down cycle, for example, we had in our plan that we would let go all of the customer service, accounting, et cetera, staff and have the engineers do those jobs because they would at least have a job and when we came out of it, we would have them and we could hire these non critical roles back over time. And that really set us up for success because when we came out of the recession, the demand was very high and we were able to fill that demand quickly by having that staff on hand along with, you know, a bunch of other cost cutting decisions about what operations we would consolidate and so on. So that, that really helped us a lot. And so we have all our clients do that plan. So a number of our clients are starting to dust off those plans and pull them out.

Yeah, I find a lot of folks resist doing that before they think about it in a casual way, but they don't actually create the scenario for it. And, and now they do it in a hurry. But there's a certain amount of fear of, well, I don't know how much it's going to go down and I don't know how much I should cut yet. And that kind of thing.

Right.

To survive.

Right, right. And it's it and it is very scary. I remember being on the other side of it and really being scared. Like I, you know, am I making a decision? You know, am I making decisions with all the knowledge that I need and how can I judge things? But if you had this clear cut thing where you say when this happens, we're hitting DEFCON 1 and that means series of things, it really helped a lot.

Mm. What about the opportunity? Have you had people figure out ways to thrive and grow and accelerate in the middle of the thing? And what are you doing there?

There's these two great twin brothers that you've probably seen them, Bill, the Billodeau brothers. They have been uncannily accurate at predicting the economy in the future. And they prescribe to this idea of economic seasons. And when you look at economic seasons, there's spring, summer, fall, winter, the economy follows those same cycles and there's things to do in each part of the cycle. If you're a farmer, there's a thing to do in each season to get ready for the next season. And we've had a really, really long summer. Right. It's been incredibly long. But now as you go into the fall and maybe into the winter, we don't know yet. There's specific things that you want to do to prepare for those things. And in the business world, there's a whole bunch of things you can capitalize on if we are in fall or winter. So for example, right now you can buy airline tickets for a fraction of what they were just a little while ago. You can book conference space with very flexible terms, way more than you could a little while ago. Now is a great.

Just come, please.

Yeah, now is a great time to renegotiate your lease, talk to your insurance company about cheaper coverage, talk to the phone company. All of your suppliers during fall and winter are scrambling to get business and are happy to lock it up at a lower rate. So those are things. Same thing with hiring. There's going to be people who will get let go that you couldn't afford or get or get access to. This is a great time to start thinking about that. Who's on your wish list that you couldn't get before that maybe you would want to hire now.

Yeah. So on the people side on the acquisition, the purchasing advance, contracts, things like that, Right?

Yeah. And then there, you know, on the other, on some other parts of it, if you kind of think about the ecosystem your business operates in, then there's the opportunity to perhaps, if you're smart enough to have a fortress balance sheet, something that Jack Stack talks about a lot of is if you have that fortress balance sheet, you can actually may perhaps buy your suppliers to become vertically integrated or enter into longer term contracts. You can acquire your competitors during this time and bulk up your business. You can renegotiate all kinds of terms in this environment. So there's a lot you can do if you're not desperate during this cycle.

Right, interesting. Well, it's probably enough stuff for people to think about. So the big message points I hear are concentrating on getting yourself to the other side of the fall and the winter that may be coming. So and thinking about the scenario of down 10, 20, 50% and what's your contingency plan for each one? How do you survive it? How do you hunker down? And then if you've got some resources or where you have them, it's a great time to begin to look, to buy, to move, to acquire, to negotiate because of this position.

And then lastly, I would say in the much shorter term, so in this next quarter is building your action plans for if people, if you have to close your office and people have to work remotely, what kind of things do you need to think about there? What's going to happen to your customers and how could you make life easier for them during this transition, et cetera. So all those short term things you also want to be factoring in because there's just so much uncertainty. But the one thing that is certain, if you don't think about it and plan for it now and it happens, it's going to be much harder than if you spend a little time putting energy into it now.

I think the first thing is like, what does this mean to me? You start to look around, you're like, am I affected? Am I not affected? But then when you start to look at the whole environment, the ecosystem that you work in, then you start to see all the impact. So some things kind of still keep moving, it's business as usual. Others are significantly disrupted. Like a lot of the conferences that I speak at, those things just got canceled for the next six months.

Yeah, yeah. We have a rental property in Austin and it's pretty devastating what happened with South By.

South By. Yeah, yeah, yeah. So a bunch of our trips then going alongside them. But then my individual small meetings are still going ahead. I fly up to Toronto next week to work with a new client and like that. So. Yeah, all right.

Well, it's of things that are working well.

Yeah. I think the thing to remember is that there while the overall economy may slow and contract, it's, it's very, very small. Such a small amount, but the dislocation is enormous. So restaurants go down, but people are stocking their kitchens and so on. All right, thanks again, Rich Manders. Rich, what's your company name? Shout it out for our listeners.

Free Scale Coaching.

Rich at Freescale Coaching. We'll put a link in the show notes as well. Thanks so much for joining us.

Dot com is the easy way to find it.

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