Don’t panic! Economic cycles are a part of life. The best companies are built in the worst of times. If you panic, your employees will panic.
Conserve cash: Delay spending on non-critical things that do not result in revenue generation. Renegotiate vendor contracts, rental contracts, etc.
Improve productivity: Get more out of your team.
Differentiate between high and low performers: Reward high performers. Counsel out low performers.
Optimize the organization: Hire critical talent as they may be available at a reasonable cost. Transition or re-deploy non critical resources.
Continue selling or marketing your product or service: Being in front of customers or vendors builds confidence that you are a long term player.
Focus on growth with an eye on profitability: Since the cost of capital is high today, be cautious on how much capital you raise to invest for growth. Avoid over-investing in the business in the hope for exponential growth in the future.
Communicate with your team internally: Make sure that your team understands that you’re building a lasting and successful enterprise and that some of the cost cutting measures, including layoffs, are necessary for the health of the company. Anxiety levels can be high in tough times.
Act swiftly: Try to deliver any bad or tough news at one shot to the company. Continuous bad news can affect morale and instill fear.
Have fun! Make sure your team is having fun. A happy environment builds loyalty and performance for the long term.
About the columnist: Suvir Sujan is a co-founder of Nexus India Capital, a Mumbai-based venture capital firm that manages $320 million in funds. Sujan has been an entrepreneur who lived through and survived the difficult dotcom era as co-founder of online marketplace Baazee, now known as eBay India.
Photo Courtesy: Nexus India Capital
I mean, this is what they should be doing even otherwise
Indian Internet industry, in specific is not growing, because there is less focus on revenue. Almost all of them assume that building “products and features” will increase valuation. lets agree… we aren’t going to innovate. We just copy the models that are successful in US.
I’d say, majority of the employees should have direct revenue responsibilities ( ie..at least more than 51%) especially in high risk industry like Internet.
And…Believe in yourself! And…believe that this too shall pass! So, persevere.
Because at the time of adversity, its actually the leader who wins the war by motivating and guiding the team at all times.