Surmounting Hard Times Is a Team Effort
In 2021, many entrepreneurs were riding the bull market wave of hyper valuations and enjoying a thriving moment for startup funding. But as 2022 began, inflation rates went through the roof, an international conflict created uncertainty in the markets, and the startup ecosystem was hit hard by fear of a recession. The consequences of a bear market are already starting to show early in 2023, as we are seeing many startups struggle, reorganizing their teams or even closing operations.
But market stability is just one of many reasons why entrepreneurs are having a hard time. Keeping in mind that there’s a 1:10 success ratio for startups, it seems like overcoming challenges is something that just comes with the territory. The truth is, startups fight every day to overcome various problems, including lack of product-market fit, disharmony on the team, flawed business models, cash flow issues, or bad timing. So, what can we do as leaders to navigate challenging times with our teams?
Well, some might suggest that empathetic leadership is key to maintaining a culture of trust and security as it allows employees to effectively communicate with colleagues and managers. It can also reduce stress, build positive relationships, and even boost revenues.
And while we all agree that leaders' behavior is important, I believe that more than just empathetic leadership, we need to have an empathetic work culture. It is up to all of us in the community to contribute from our own positions. After all, we all have the responsibility of building a sustainable business that our customers love. I guess what I am trying to say is, empathy and trust go multiple ways. We want our employees to have empathy toward leaders when they make a tough call, we want customers to have trust that the business offering will continue to be great, and we want our leaders to understand that the uncertainty is killing us.
Empathy in the workplace is the ability to understand and relate to the thoughts, emotions, or experiences of others. It can be practiced through creating a culture of teamwork, accepting people as they are, being transparent and authentic, and choosing an attitude of understanding. It is a rare and valuable strength in the workforce, as it allows leaders to sense who needs what to be successful. Empathy can also be a great asset in personal relationships, as it helps build understanding and trust.
So, how do we react and move forward in today's scenario?
These tougher times are surmountable, but grit will be required. I mean, we all work in startups for a reason. We like the problems, the unexplored, the fast pace, and the challenge. And this is just another one of those challenges. But let's not make the mistake of thinking that this is a leader’s-only challenge.
While it’s true that those in leadership positions have the responsibility of making tough decisions for the sake of the business, it is also true that everyone contributes to the end goal. Being lean on expenses and efficient in operating is a role we all have to play, not just founders and leaders. Think about it, how many times have you hired a service or license that you stop using and never cancel? But cutting superfluous expenses is only part of the solution. Ensuring that as a team we continue to operate as a unit, we encourage everyone to put their time and effort into their top skills and are open to new challenges, which is also key in these tough times. We all are coming down from the 2022 high of having lots of hands and tools to fulfill a task. Today, we may not have as many but we can overcome this by operating in more dynamic ways and always trying to keep working toward the big picture.
The big picture today, for many of us at startups, looks like this: (1) keep up your good product/service experience in a more efficient way, and (2) grow in those industries where your problem is most present. In parallel, ensure you have a lean team to do this.
To ensure the best team attitude and reduce anxiety, trust and transparency are key. As mentioned above, here are some tactical ideas on how to operate as a more empathetic team:
Transparency is what will allow you to maintain credibility and trust with the rest of the team. It means being open about decisions, timing, reasons, plans, and next steps.
Motivation and honesty. Be sure to highlight the team's contributions and top skills, and give honest feedback on improvement scenarios. This will allow you to build a level of trust that will help in those more stressful tasks.
As teammates, we have to understand and empathize with our leadership teams. Trust that they are trying to make the tough decisions with our best interests in mind. Keeping the company alive to fight another day is their goal.
As customers, we have to keep our trust in those businesses that have granted us good services and products until now. Just because they are reducing their team, it doesn’t mean service will dwindle.
In the end, joint responsibility is part of the solution;it is up to us as leaders to do everything we can but each one must assume their role in their company. It’s up to all of us to encourage the best actions from each other and to do so by leading by example.