The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “How do you move your company forward after a huge setback?” is written by Ken Staut, CEO of GrowthFountain.
Socrates said, “Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.”
Entrepreneurs are all but guaranteed to encounter huge setbacks beyond the scope of what they thought they had signed up for. Make no mistake: Unpredicted and gut-wrenching mishaps can make any God-fearing individual question their own existence. But when huge setbacks occur, it’s been helpful for me to follow this roadmap:
React with confidence
In 2012, the euro was collapsing. Borrowing costs were soaring in Greece, Spain, Italy, and Portugal, and markets were speculating the near-term breakup of the eurozone. European Central Bank President Mario Draghi led Europe back from the brink by stating, “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
Honestly, I think he was bluffing. But Draghi’s tactic worked: It calmed people down and restored confidence, and markets began to stabilize.
As the leader of an organization, it doesn’t matter what you think in secret. Put on your best poker face and reassure those you lead that everything will be fine. Confidence in the face of adversity should buy you enough time to execute the second part of your comeback plan.
Secure a quick victory
Nothing reassures employees, partners, or investors like a measurable indication that company struggles are starting to disappear and things are getting back on track. This doesn’t have to be a game-changing victory; it simply has to signal business as usual. Is there a customer you can make a sale to? Is there a partner you can pen a deal with? Is there a publication that will write a laudatory feature or give you a positive mention? Any minor, demonstrable sign of success will lead to higher employee morale and reassure stakeholders.
Perform an honest post-mortem
Charlie Munger, vice chairman of Berkshire Hathaway, once said that Warren Buffett has been so successful because he very honestly assesses decisions and learns from their outcomes—both good and bad. It’s not an easy thing to do; ego and human psychology all too often cause unintended results. It’s best for entrepreneurs to take a step back and really examine any setbacks that arise. What could have been done differently? Is anything salvageable? Should you reexamine your strategy to secure a better result next time?
Evaluate each terrible setback in a constructive fashion. Maybe your setback was unavoidable, idiosyncratic, and offers no learning experience—but that’s unlikely. Usually your setback will shed some light on a better tactic to implement moving forward. Perhaps it can help you pivot toward a winning strategy or better plan execution. By changing your mindset to one that is open and positive, you can use these initially discouraging experiences to your advantage.