It was May, 2010, and the pressure was tremendous. The economy was sputtering, sales were stagnating and a major development project was stalled at my startup where I was trying to keep it all together as CEO.
Then I got the call no one ever expects or wishes to receive: Dan, my CTO, partner and close friend, had passed away suddenly at a very young age.
A flood of emotions is an understatement for what I felt then. In addition to shock and sadness, I was terrified. And I was faced with a decision: fold the company and avoid further loss or take the riskier road and soldier on. I realized that pressing onward was the only sensible choice. We stood to lose far more by not acting – and, just as importantly, Dan would have wanted us to stay in business.
I learned then that I could use fear as a motivator in a positive manner. Rather than being paralyzed by the possibility of failure, I chose to be afraid of the market opportunities the company would miss out on if we didn’t press onward. What followed was a stretch of intense reevaluation, a reshuffling of responsibilities and a reorganization of my leadership approach.
Looking back, there were several valuable lessons learned during that time that I’ll keep with me as I continue to grow as an entrepreneur and business leader.
1. Boost employee morale
Similar to a losing a family member, employee morale goes down significantly with the loss of an important company figure.
As CEO, it’s important to keep a positive outlook and assure everyone that it will be okay. Employees may be suffering from the loss of their colleague, mentor and friend, or they may be concerned about the future of the company and their job security.
Regardless of the reason, losing faith will result in lower performance and output. Make sure to provide employees with the appropriate professional counseling and act as a confidant, lending an ear. Most importantly, even if you’re hesitant, do not quiver. Always present a clear, steady plan of action.
2. Spread the knowledge
The early life of a tech company is primarily focused on “go” rather than “know.” But no matter how small your business, find a way to evenly distribute knowledge so that the loss of one won’t be crippling.
This can be done through hiring employees, contracting consultants or using outside third parties. I was fortunate to have previous experience and quickly grasp the software architecture skills needed to move the company forward. For many companies who aren’t as fortunate, finding a replacement often is too late. Think of knowledge distribution as a well-designed network – several layers and no single point of failure.
3. Document everything
Many small businesses fly by the seat of their pants and forget to document important things like key software processes, vendor contact information and third party responsibility and compensation methods.
While some companies may maintain a central database or wiki of systems and their purposes, certain procedures are still familiar to one person only and may present steep learning curves, particularly under pressure and on short notice. By documenting these processes, the company can be back up and running in a matter of days instead of weeks.
4. Understand legal and financials
In a time of loss, it may seem insensitive to bring up the legal and financial matters of the company, but as the CEO or next business leader, it’s a must.
From a legal perspective, make sure to have shareholders’ agreement with the legalities of any and all partnerships properly laid out. In the case of a death, you may now be dealing with a family member or a next-of-kin with a different vision for the future of the company. Having the shareholders in agreement can prevent discord that can result in costly negotiations or even the selling of the company. These issues can distract from the day-to-day activities and the employees that need your guidance.
5. Keep the entrepreneurial spirit alive
While keeping others motivated, it's equally important to keep that entrepreneurial spirit alive within yourself in order to not lose steam. Remember that ultimately you’re a business and need to continue pressing forward.
I think back to the early days of the company, when I got a taste of that inextinguishable fire and passion for entrepreneurship. Keep that fire alive at all costs.
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