A client of ours was experiencing a drop in sales; financial performance was down, way down. The natural response is fear and panic. Unfortunately the natural response is the very worst path for a leader.
Here’s how it usually plays out. The numbers look bad, leaders try to rectify them be instilling more measurements. They tighten the ship; they say things like “We need more accountability.” They have weekly meetings to review the numbers; they command the sales team, “Close anything you can right now!” After a few weeks of this, people scurrying around like rats on a sinking ship. Finger-pointing and a reactionary mindset rule the day.
Here’s why this happens, and how we helped our client overcome this instinct:
The lizard brain, aka the amygdala, is the most primitive part of your brain. It’s ignited and ruled by fear. Instead of thinking about the future, the lizard brain says, “Do anything you can to survive today.” Unfortunately, the amygdala isn’t very smart, it can’t tell the difference between a threat to your life and a threat to your ego. For a leader, fear of not making the numbers feels life threatening. Fear ignites the panic that causes leaders to scream and shout at their teams, or hole up in their offices.Our client was tempted to go into panic mode. But instead, we took the time to plan. Instead of focusing inward, which is what panicked organizations do, we helped our client focus outward, on their customers. Instead of requiring their people to attend more internal meetings, we sent them out to meet with clients to find out why they were and were not buying. We used the information to revise the strategy. We instituted some short-term band-aids to help cash flow. But the majority of our effort was strategic.
This is counter to what the lizard brain tells you, but it’s the only way to create a stable organization. It required some deep breathing. The leadership team had to reset themselves and not let the panic seep through their organization. We had to simultaneously focus on both short and long-term, and create strategy that could be executed immediately. Fortunately, our client, with our help, was able to calm the lizard brain, and rally their team around a plan.
2. Financial results are a lagging indicator
The numbers are the result of the thoughts, beliefs, behaviors, processes and systems that were created months, and years ago. Financial results are a symptom not a cause. Leaders who pound on the spreadsheet demanding improvement don’t address the root cause. It’s like having a brain tumor and deciding the best course of action is to take Advil, because it relieves your headache. You’re still going to get headaches, and they’re going to get a lot worse. If your neurologist developed a treatment plan that only focused on symptoms, and cause, they would be a failure in their field.
Leadership is no different.
With our client we unpacked the cause of the financial decline. It didn’t happen overnight. Lack of emphasis on prospecting, increased competition, and eroding value proposition all contributed. We chose places to get quick wins – more prospecting – and created a plan to improve product offerings.
As a leader your job is to take fear off the table. The first place you need to remove it is in your own brain.