Welcome back to another episode of the startup therapy podcast. This is Ryan Rutan, joined as ever by Wil Schroder, startups dot com CEO and founder. So the intention for today was to talk about how founders communicate in a crisis. Once again, we're recording this still in the midst in the grip of of the cove. It locked down, so there's a bit of a crisis going on, So probably never been a better time to talk about this.

You know, It's not the 1st 1 though. And it again that doesn't make it better or worse, that I'm not gonna try to compare him. But I'll say this. And I think this is worth noting. This will essentially be the fourth time you and I have been through one of these. Yeah, just to count them back, the 1st 1 in 9 11 I think we should talk a little bit about, um, what it was like responding in that crisis again in 2007. 2008. Of course. The financial crisis. And then just for fun. Ah,

we invented another one in 2015. Were we bought a company that imploded overnight, not a global crisis. But in our world it was significant. And you learn a lot about who your company is here. Leadership are, is and really who you are in a crisis like this. And I think, as each one has gone by, I think we've just learned to become less and less affected. You know, as far as your shock and awe and more and more focused about Okay, Yeah, I kind of know how this story ends. Let's make sure it ends better than its last.

It, like so many lessons and founder them. We know when to duck because we've already hit our head on that bar, right? It's just one of the

one of the things. Absolutely. So just a quick progression, right? If you don't mind, just kind of just go back to the last few crises. Just talk about, um, how would hit us? Ah, just in general, you know where our heads were at the time? Because I think what we'll do is we'll say, based on all that knowledge based on all that experience. Really? Ah, here's what we did well. And here's what other folks could do to kind of share in that experience to be able to navigate through something is gnarly is this is because they're all horrible, neural crazy and they all feel like the end of the world at the time. But the world goes on,

the world goes on. Yeah, there are wild and crazy for different reasons to which is what makes it interesting, right? I think there are some commonalities that we can take away from it. But there's still so many dynamics to teach of these. Each of these situations, for example, you know, having being forced into working from home, uh, was was never an issue with any of the previous crises on DSO. Each time they presented with some some different challenges whether they're, you know, existentially or financial or, you know, in this case,

geographic. Um, yeah, Let's dig it, man.

Well, okay. So again, just use a little bit points of reference here. So folks understand kind of the world we've lived in before again 9 11 was such a tremendous crisis because it shook the world at its core. It happened immediately and it happened on live TV. Yes, right. It was unbelievable. Toe watch that event, Remember running into the conference room and everyone was huddled around the TV and like everyone else in the world, we watched the entire thing happening. I mean, just like the amount of heartbreak, the amount of just shock of what was happening was unbelievable. And, ah,

you know, a lot of folks that'll be Listen, this we're probably, you know, Ah, in nursery school when this happened. Um, doesn't matter. Ah, the fallout from that was unbelievable. The whole world just shut down travel, especially in the U. S. Travel shut down, just everything, all at once.

And so at that time, uh, I was running on an agency. And when we had $10 million a month in payroll yeah, right is what it was like a few people to contend with. This is massive. And so we had a huge client, and all of a sudden, within days of this thing happening, I get some calls where the client says, Hey, you know, one big project we were working on a little bit weird right now, no one traveling. What have you, Uh,

let's just put the brakes for a second, and I think Okay, you put the brakes for a second. Nothing of the world. Um, other client calls. Hey, for that big project we were working, I'm you know, whatever. And all of a sudden, I'm afraid to pick up the phone. I mean, like, every client is calling canceling. Yeah.

Ah, and again, $10 million a month. You know, you really can't get too many cancels and make up for that. And so the reason that one was hardest right. And I love you hear thoughts. But the reason that was the hardest because it was the first time I had been through it. I had I didn't know this stuff could happen,

right? We'll put into context to I mean, we were far closer to the start of our careers of that point as well. I mean, it was it didn't exactly take a major global crisis to throw a major wrench in the gears of my company. At that point, I was running a small agency at the time. And, you know, there were things like people quitting. Seemed like an existential crisis of that point. So, you know, when 9 11 came along, Yeah, that was your biggest issue

was not be a lot

higher. Faster? Yeah. Yeah. And so you know, the at that point, you know, the and we've talked. Listen, other episodes, the emotional intelligence of that point, you know, the managerial experience of that point, I was just say, lacking would be would be giving me more credit than I deserve, but yeah, so,

you know, it was one of those things were when it when it happened. It certainly wasn't my first thought. I think that was one of the really interesting things about what happens in a crisis. And at that point, men, it was a relatively small I only had 15 16 people working in the agency of that point. So it wasn't when you're $10 million in payroll. But it was hours before I even gave a thought to how it might impact the business. Like time just stopped. I was I had had gone, and I don't remember why, but I had gone to my parents house. Um and it was making breakfast for him or something. I remember being outside on the grill, but I know it was morning.

I think I was grilling bacon and eggs for some reason. I don't know why, but I was outside. My dad said, Come inside. Um and and he said, You know, they a little plane ran into one of the one of the trade centers, and that was that point. They had no idea what had happened, right? And so we're sitting there like, Oh, that's weird. You know, like,

you know, you think you know, even if you complete lost like you find somewhere else to crash, And so then we're some cash. Was it intentional? Couldn't have been now. And as we're sitting there talking another 7 47 flies within this sort of thing and just that the world stops unbelievably out of a movie. Unreal. Right. So, you know, in that moment in time, my company didn't exist. I was just sitting there, watching the television like everything else ceased to exist. Andi it was It was hours before,

you know, it kind of shook myself out of it and then and then started calling, calling around to staff. Um, because some of them had family in New York, and so it was checking in, making sure everybody was OK. Just super crazy times. And luckily, nobody was directly personally impacted. Um, but yeah, it was It was wild. And and then, uh, similarly,

over the next day to three client calls started coming in. People were pausing or reducing. Um, you know, spend with us. We're cancelling projects altogether. And, you know, I think in total, you know, when when all was said and done, we lost out on something like 35% of either existing, like recurring revenue and or future book revenue from that was all tied to that one specific event. And then, like you said, we were in the agency world. That's that's That's a big chunk, right? And that means having to make decisions around payroll and people

are not. And you have no negative operating leverage. Exactly. So what was interesting, though? Ah, and again, I really want to frame all of this because that is, all of this is relevant. Ah, is that we also got to see what happens after a crisis because I think knowing what's on the other side of this journey is as important as anything because at the time, writing for both of us, we didn't know, um, what was going to happen after this. It was just so apocalyptic that we're kind of like, Well,

geez, you know, if, ah, if this is the end, I guess this news is just the end. And I know at the time I couldn't wrap my head around, Didn't have the experience yet, Um, that there was gonna be a life after this, and what I did in those moments would also extend through this life after this. It wasn't just ruined. And, uh, after the whole thing imploded in the stock market imploded. Everybody got employed in all this crazy,

horrible thing happened, um, people went back to business, but they did it differently, right? The cost of everything plummeted, which actually became this an enormous opportunity. Um, the mentality for everyone was, Hey, maybe we should build stuff that sustains a little bit, you know, And that always That's always how it starts. And then it changed. Respect to go. Go times.

I hired two of my best employees in the aftermath because they lost their jobs at one of the bigger agencies in town at the time. Um, so you know, they're there were opportunities and interesting things that came

from there are in it passes. I mean, you have to remember that the world still wants to operate again, right? And even though we have a crisis and there'll be another one after that, uh, these do go in cycles. And founders who have been through this enough times understand that this is the beginning of a cycle that we have to shift gears entirely. We have to just Okay, I guess we're in this phase of how the business runs and then change all of our parameters to go meet that. And then we know that we have to run like that for some period of time. And so we're allowed to go back to the way things were. But, you know, for a lot of folks for me, when I was first getting into this, I was like,

No, my job is to keep things exactly the way they were me for all of this happened, you know that? Totally ignoring the fact that any of this stuff happened. And so if we had 700 employees the beginning of this, I'm a failure. Unless we have 700 employees after this. If we have 600 million of revenue before this, I'm a failure. Like in retrospect, that was just pure ignorance. Sure, right. But again, it was the downside of not having been through the cycle. And so again,

that's a little bit what we'll talk about if we fast forward a little bit. Once again, we hit 2000 to 2007. 2008. We have the financial crisis skin. This is all these air US based events. I'm trying to be mindful of the fact they didn't eso effect everybody the same

way. Interestingly enough, I can provide some context on that, cause I leapfrogged that one. I was I was in Europe during that. And then I got back to us at the tail end of the crisis here in the US Um, and just missed the kind of winding started cascading and crashing over there. So, yeah, it was interesting

timing for me. We were, ah, raising money for a financial services company. Ah, that essentially became again a different company and entirely but the same thing you see for, like, a firm

and stuff like that. Well timed, very well timed. We're

in the middle of raising as the financial meltdown happened. So it was one of those apocalyptic events again. Where were in a position where we need more money more than ever in the last thing available right now at the time is money. Ah, again, freak out moments, etcetera and a little bit of a better, you know, understanding off of how this works. But again, major crisis in the company ended up going out of business on

that one. Yeah, which is interesting too, right? I mean, so there's there's a big difference in those two scenarios. I mean, notwithstanding the the actual events behind them. But, you know, when you know you talked about before, the world will go back to normal. That's fine if you're running an existing business, and that might mean trimming way back. That might mean, um, you know,

you know, changing operational structures, doing doing a lot of things. But when you're at that nascent stage of a business and you're in the crisis, it can manifest very, very differently. In in the case of that company, it had to fold tense. Um, it wasn't, you know, there are situations where you can't just simply say little just will just ride this out. We'll just sustain this, particularly because of the financial needs that you guys have in order to operate that company. Because it was based on having available cash to deploy. There wasn't really a good pivot around that.

If I fast forward again, Ryan and just it will wrap up this context piece. Ah, for 2015 we by a company called virtual dot com, which is health. People find virtual assistants. Ah, virtual was amazing company, but had some financial mismanagement problems, Um, and shut down virtually overnight. In other words, everyone into work on Friday, Assuming everything was good. On Monday morning, everyone is fired. Ah,

to be fair, this is just bizarre situation. I will get into it some other podcasts. But for the 450 people that work there, this is exactly what apocalypse looks like. And so we absorb the company the next day and were in charge of dealing with everything that had just happened, right? It was a complete nightmare. Uh, worked out great. You know, we ended up saving Ah, wonderful company. And that was the goal. But major crisis, Mr.

Major Crisis Ah, end in I think by the time we got to that one, this is 2015. We knew how to manage crisis. So I think part of what we'll talk about today is some of the tactics we employed to help manage this crisis. And then we'll fast forward to 2020. Today we're in the Corona virus crisis and talk a little bit about kind of how we've been managing through this one as well in the last two with with corner virus and with, um Tzar Jewel Ryan, I've had the good fortune of going through with you. That's right.

That's right Here. We got to do both things together. Still doing this one. Um, but yeah, it is so different. It's so different. There is one of the thing that was interesting about the context of observed Jewel two things, really. I think one that it was localized to that company. Now, for the people going through, it doesn't really matter, right? Because it was their whole world, right? It it's it's crisis all the same.

The other subtle difference there. And this had nothing to do with into the 450 people who were in the company of time, but for us we got to decide whether we wanted to run into that forest fire or not. And I think at least in my case, that that gave me a different level of energy and excitement around doing it. Um, it felt more like we got to play the hero to some extent, as opposed to being the victim of the crisis. And it's funny because fundamentally didn't change anything. We still had to do all the same work. We still had to do all, you know, the long nights, the early mornings, the hard decisions, the work didn't change it all.

The only thing that was different was the mindset. And and I think it's a great illustration of how you cower something. How you frame something can have a hell of a lot to do with how you feel about it. In that case, simply by saying, Hey, let's get together, let's decide if you want to do this. We decided we wanted to do it, and then we ran into the abyss willingly on and with the hell of a lot of energy. Way came up the other side with a lot less energy

uh, work. Yeah, let's talk about why it worked. Let's talk about kind of, you know what we learned and given the fact that there's some crazy stuff going on right now and there will be more in the future, So again, take this as just moment in time. Um, let's talk about what worked. Um, I would say top of the stack. You know, first things first. We've we've definitely settled on the best way to approach the crisis. Were again. We're talking internally focused,

by the way, um is to cut the bullshit. Yeah, for sure. Ryan, in the agency days back in 2001 we were in the business of spin, so to speak, business of creating marketing messages and everything was always great. Ah, that I think internally our messaging was constantly trying Teoh not cover up. But, you know, kind of put the best possible light on how things were going. And, you know, here's what's also interesting again,

some older folks might appreciate this. The way you communicate within a company has changed dramatically. Right back in 2001 CEOs weren't writing personal blog's out in public about how they were dealing with, you know, mental issues. Etcetera, right? Like, let's stay on the job back then, right? I'm shaking

my head. No, right now, just so that I can pretend I don't understand what you're saying, So I don't have to an older person.

I'm just going to the positive. The ability toe have open discourse has changed for the better dramatically in the past 20 plus years. So we have the ability. And if I may, the expectation, um to shoot folks straight to really cut the bullshit and my take on it is the moment the messaging sounds suspect. It sounds guarded. It sounds deliberately spun, it loses credibility, which loses its efficacy completely.

It does and imagine on the back side of that, in whatever that whatever you don't illuminate, it becomes a kid's nightmare, right? It becomes 20 times worse in their imaginations than the reality, sure on. But if you leave any shade there, it will get filled with worst case scenarios, and I think that's the other the other side of it, in addition to just looking like you're bullshitting them, which feels bad, Um, you leave the rest of the actual truth up to conjecture, which is really, really dangerous, especially in a crisis

when shit hits the fan, so to speak. I think the assumption has to be all of our team is talking and they're saying all negative things, like, you know, it's worst case scenario across the board. I'm not saying it is. I'm saying I think you have to build from that assumption. In other words, if you say Hey, you know, we've hit this little iceberg thing and it seems like, you know, ships, ships rocking a little bit, But every is fine, you know?

I mean, go outside, have a drink. Things were cool. There's people in the Deco dude, we hit a nice here. I had a drink. It's

a little over the guy next to me before he went overboard. Yeah,

no, I I think the worst thing you could do is say to yourself, I don't want to freak everybody out. So let's you know, let's create this kind of spun version of the way things are now. At the same time, you don't want to get on the p A and say, Hey, Titanic passengers, we're all gonna die, you know? Good calm like it. Yeah, Yes, They stay calm in and try to find a boat. Like I'm not suggesting that you have to rile everyone up. But I think in the messaging,

it has to come across more raw, more honest, more empathetic than any message you've ever had before. Because no messaging is going to get picked apart in red more than everything you say in a crisis. So if you have to defend it, you shouldn't be saying it.

That's right. Yeah, I think it looks like a shield to any, but they're delivering it to there's a big problem. The other side of that, And this is what you're talking about A second ago is if you also hand them a sword, which they can then just use to eviscerate you. That also doesn't help. Right? So you need to be careful in how you deliver it again. It needs to be honest. I need to be truthful. But you also don't want to just kind of throw things into the wind like Yep, everything's bad. This is a total shit mess. We have no idea. What we're doing is might be honest. Probably not the best message delivered a crisis

when the whole Kobe thing happened. You know, internally, we got about 200 people at start ups dot com. Ah, and you know, like every those people freaked out, why wouldn't they be right? Ah, right. You, me, Elliot, A few other folks, we sat down and he said, You know, for someone again,

we've been through this a few more few times before. Um, step one is to circle the wagons. Step one is to circle wagons and make sure that all our defense is as strong as it can be. You know, that cutting expenses that you can accept. But while we're doing that, you know, while we're strategizing figuring that out, our staff is thinking My God, have a job, right? Just tell me, you know, like, don't tell me like,

Hey, you know, we're looking at this or that. Just am I gonna lose my job right now? I know that's easier said than done. Um, but don't overlook that. Like, if you come up with some communication that says, hey, just won't let you know. There's been some challenges in the public health sector. Excited, like, don't tell people stuff. They know,

like, tell them what they're thinking, right? We know these are challenging times. We know that you're concerned about, you know, caring for your families or, you know, your career, etcetera. Um, here's what we're doing to try to prevent that. Um, here's here's what we're hoping for, You know, in those measures.

Like we said, Hey, there's a number of cost cutting measures we've taken. We've taken in all areas that don't affect personnel and where were monitoring by the day, how revenue comes in, how expenses come in etcetera to see if there's any other guidance that we need to make. That's it, right. We're not saying you won't ever lose your job. We couldn't possibly know that. But I want everybody to be armed with his much information as possible so they can see the same thing that I'm seeing. So even if it's unsure, at least they're seeing the same picture, You know? I mean,

yeah, and I think it's really important, you know, you said something critical, which was that Tell them what they're already thinking, right? So you don't want to just become a list of facts that they're already aware of. Um you know, you need to answer the questions that are already likely in their head. And that means, you know, spending some time to think about how were they thinking about this, right? Not just how is this affecting the company and what facts can I passed down to them? But how are they thinking about what they're going through right now? The other side of this is being able to think about how they're feeling right, because there's also absolutely she image.

I mean, the empathy piece of this is perhaps, you know, the most important right? If people feel like you have empathy, and if you really, truly do have empathy for them, um and you're delivering the information with empathy than the fax don't change. The facts may still be the same. They may be harsh. They may be, may be hard to take, but delivered with empathy. It at least keeps people facing the same direction. Um, and you can work together to solve this because you know the other thing that's really important. Remember, the last thing you want in a crisis of external nature is to create an internal crisis because that's going to make navigating it exponentially harder. Probably impossible.

Yeah. And you want people to know that their heard and this is it at any stage of the business. But, man, particularly now, right? There's nothing worse in a crisis than feeling like you're not being heard or considered. Or you don't understand the decision criteria for the people that air that the have your your future in their hands, right? Like if we're dealing with this crisis, the first thing in my mind is let's give everybody else the same decision criteria that we have so they understand where we're coming from. You know, this is how we're making decisions.

Yep. That context is so, so important, Right?

Sure in treat people like adults, right? Say, look, you know, if revenue hits a certain level, we're gonna have to consider reducing expenses. Which, of course, you know is gonna mean layoffs or, you know, staff reductions, etcetera, um, and and let people understand the causal effect on that. You know, if if in this time I'm a retailer,

you know, if she's having a bit right, if I'm a retailer and in and I say to my staff Hey, we're going to have Teoh to slow down their business. You were best case. We'll see 50% you know, from our online business or whatever, where we are right now, Um, with that, we're gonna have to cut costs. That's that's likely going to mean some of your costs as well, right? And so but these are our only options. We could only, you know,

basically pay out as much expenses is we're getting in revenue. And so here's how we're tryingto make those decisions. Different businesses. They're gonna have different conditions of what they can and can't share. But ultimately, everything you're saying is just a bunch of words until people know exactly where they stand. And so the cut, the bullshit is what's the fastest, most plausible way we can get people on our side of the table to understand how we're developing this and make sure they understand their concerns are part

of how we're making decisions. Yeah. I mean, nobody ever likes to be told how to feel about a situation, right? So arming them with the information that they can make their own decisions understand where they stand in the crisis, Um, matters more at a time like this than than any other you know, in our case and in, like you said there. There are differences in what can and can't be shared, depending on the type of company, whether it's public privately held, even just the internal company culture. One of the things that I think went really well in our communication was not just letting people know that, you know, if we get to this point,

we're gonna have to cut costs. We got specific about what kind of things we were going to do to play defense before that, right? Like here's some costs that we know we can write. That won't impact any of you. And we're doing all of those things first. So at least they all know that we're taking every possible step we can to defend any human cost first, right and nice, like I'm talking in reward terms, but it is a bit like that, right? And so well, you know, we're willing to give up positions in order to maintain our people, and that's OK, and I think it's really important to understand that the other thing that was great about kind of drawing the lines in the sand was it made it easier for subsequent communications.

That first message that you sent out to the rest of the group, where we sort of set out some parameters for Here's where we are. This is the stage that we're in right now. This is the situation, these the types of decisions that we've had to make. But we're not at stage to where we're going to make decisions. And you kind of just let people know. Hey, not much has changed. We're still in this first phase where you know, any cost cutting is going to come from, you know, external contracting or marketing spend or something else that won't impact your life directly. And I think that was really well received, and again it makes it easier to. Then you've got that basis of communication, and you can just kind of keep pinging on the same points and letting people know that either nothing has changed everything still copasetic or were moving closer to having to make different levels of decisions and then being specific about this as well. On Gus far that's been really well received.

Totally. Yeah. I also think you know what things that that Ah, we did particularly well in the 2015 period during his virtual, which is tough time anyway. But what worked well, despite the fact that was a tough time was that we opened up communication to the top, right? Like, because here's my thought. I think that, uh the moment you send out communication, especially something that's not going well, the communication immediately gets parceled into all the different. You know, interest groups within the company. They jump into their personal chats and they come up with their own version of of what you just said,

right? And whether you like it or not, would you think it happens or not? It does the only way to pretty much break that up because it never goes anywhere good. By the way, where people are sitting in that group in what he really means is this, and you know what he's really saying is this is taken off table. Say, look, if you're not sure what's going on here is my communication, here's my email. Here's my phone number. Here's my office. Whatever, You know, whatever you're most direct communication is,

say there is no excuse for not knowing what's going on or having questions, because you can. You can directly communicate with the decision makers that could be your manager, the CEO, whatever, um, and leave no room for interpretation. That way, when someone decides that they have their own version of what reality looks like in there, you know, kind of standing on their soapbox in the break room, telling all the other employees what's really gonna happen. People can call bullshit him. Say, Hey, look,

you know, CEO said you could just ask him directly. Have you asked him? No. Okay. Well, then how did you know where we speculating? Yeah, this worked out particularly well used. The search will example, cause that's actually, you know, we've been full cycle on that one. Um, when virtual shutdown, essentially 450 people,

mostly virtual assistants, all got let go. Um, with almost no notice. I'm pretty much no nos on a Monday morning. Needless to say, they're freaked out. Thousands of clients freaked out, and so we had to communicate to a staff that we had just taken over, like, nine seconds ago. A bunch of people they've never met before in their lives had no relationship whatsoever in tried like address. What the hell just happened? And so one of the things that worked particularly well was we sent out communications toe all the folks all along the employees and we said, Look, uh,

if you're not sure you know what's happening or if you're not sure where things stand or where heads are at, here's our personal communication. Just ask again. We know you don't know us from Adam, like we understand that we appreciate what you're going through right now. Um, you don't have to guess. You don't to guess what's happening up at the top and create these conspiracy theories. Just ask. And if you're not asking, then that parts on you again and you don't want toe pass the blame. But I want people to share the responsibility of making sure that they get the right communication. Well, so what happens? You know, when you send 450 people that just lost their job,

most of them single moms, By the way, you get 450 very, very detailed emails, phone calls. Ah, video, which

is exactly what you want, right? And you want that

it's exactly what you want. Like I I I didn't look at 450 you know, email inbound emails as a liability, I looked at as an opportunity because, ah, lot of those folks, obviously, they had no idea who we were actually just bought the company. But it allows you just answer the questions directly, you know, and for most start ups. And I'm nearly that big of a staff. If you have 28 people and you can't communicate with him all directly, the problem isn't the number of people you have. Yeah,

well, you know what's interesting there, though, And I think that you do have to be careful of that, even even if it's possible. So even if you have a company of 28 I've seen this go poorly. If you do a bunch of one off communication and there's any Delta's between what gets said, that's part of what starts to create some of that back channel. Oh, well, you know, they told me it was gonna be 20 0 I heard 30. And so right, This becomes really, really problematic. And so I think that, you know,

in the way that we executed, searchable, and the way we're doing it now with coverted, Um, we've been very clear about making sure that everyone knows they're all getting the same communication through large group communication channels like our slack and our email where we're sending out the large, You know that the mass communication, um, again, very open, very detailed, very honest. And then we're opening that up for for individual response because I think that's also very necessary. You can't leave all of that in a group setting, For example. We dropped that in slack. We get some feedback there,

but as always, you're gonna get very different feedback in a public channel than you do in a one on one where people don't want to share how this specifically impacts in the context of their own personal lives of personal financial situation. Um and so I think even if you do have the ability of your small enough, you might be a five person team, maybe a 25 person team. It's still really important to make sure that there is a least some singular touch point for communication that everyone knows is consistent. The otherwise I think you run the risk of having ah, lot of opinion and a lot of conjecture get injected into what should just be objective fact.

Yeah, and and I also, you know, recognize the fact that for a lot of people emailing the CEO or emailing their manager, you know, emailing coming in above their their their reporting structure is intimidating. Right? So not a lot of people are going to do that. Um, but the importance is opening up those lines so that they can get honest an actionable feedback from people that actually know what they're talking about because I think I always feel this way in the In the absence of open communication, you get lies right. You get 20 different versions of what the truth is, unless you establish one right. And the worst thing we can do is is leave a whole bunch of gaps in the communications and let people fill in the gaps on their own. Me that always ends poor 100%. The second is I don't believe in in addressing the concerns of groups in what I mean by that is hey, everyone here Groups don't have concerns.

Well, sure. 20 different people have 20 different variants of what their concern is. Um and I never I'm never comfortable with hearing. Well, everyone saying this right? No, no, Not everyone has kids. Not everyone has debt. Not everyone has has a second income at home, so it's not one universal problem. It may, and they bubble upto one common problem. But there's 20 versions of why that problem exists, and it's my job to unpack each and every one of those

100% Yeah, circling back to to the open lines of communication piece. I think there's something else that is necessary to your point. People aren't gonna eat it all the way up to the CEO in a lot of cases. And of course, this depends on how Jim the management layers are. Um, I saw this executed really, really well, I when, when I was still running tech for a market research company, they went through an existential crisis where they decided to fire their their biggest client, which was across the board. 40% revenue in some of them are country market little operations of 60 70% of the revenue. So big deal wow, big big deal, right,

And it had a lot of impact. It was a fundamental difference between you know, that companies, ideals and the parent company. Um, it was a good decision. It was a great decision, A long term. They blossomed because of it. But at that time it was absolutely a crisis. And, um, in dealing with that, one of things that they made sure to dio was give people is many options as possible for where to communicate. And most people chose to communicate directly with their direct manager person they were most comfortable with, which makes total total sense.

But the directive then from the senior management, the executive level was that any time you get one of those respond and let them know that you're also copying in the CEO, the CFO, the CMO, whoever was that should have been in that stack because they're gonna want to know about this, too. And they'll have good input on this so they automatically loop them in and open up the channel for those folks. And it worked really, really well, a lot of people that would have otherwise been comfortable reaching up to the top level of management. We're all of a sudden thrust into a conversation and and they went really well. And it really did help to open up that communication from top to bottom. And in that company, unlike ours, there were, I mean,

managers had managers, had managers. It was it was a very short of draconian management structure. It worked for them. But, you know, by U. S. Standards, it would have been, you know, far more management layers than we would typically see and certainly, you know, in syrup dot com were damn near flat. It's it's available for management. We have, um and so it was really important to make sure you broke those layers down.

And some of the schools constituents are the managers, you know, letting managers if they're a couple layers down, be able to kind of, you know, bubble up and say, Hey, man, like, what's what's really happening here? Because I'm not sure you get the full story. I think the point is you've got to take the I'm not getting information component off the table forces. Do you have to overshare and probably way they that you wouldn't even be comfortable with, um in an effort to get her body on the same side of the table. Which brings me to our third point, which would be getting everybody on the same side of the table by way of that finding a rally point. I think that if you're the general in your commanding this army and you're getting shelled,

if all you keep talking about is the fact that you're getting shelled, it's kind of game over for you this year. It's doesn't end well, right? What? What you need to be as as the general in this case is you need to be saved. Those shells air coming from that hill over there. We need to go charge that hill and take that over right. Like, uh, you need to create a rally. A focal point. No matter how dire the situation is to say, survival comes from this objective, everyone focused on this objective and we may not get there, right?

Survival, mate, maybe. Look, guys, we can't We can't hit less than 50% in sales if we hit less than 50% in sales. Uh, it's going to game hip, right? And maybe we don't get there. But what a colossal failure on behalf of management if we don't illustrate exactly what that rally point is, what each person in the organization conduce to get to that rally point. And most importantly, the progress by day. By the way, Hey,

end of today. Here's what we got done Shoutouts to this person, this person, this person goals now still this everyone keep charging Were one hedgerow closer? Yeah, Yeah, this is a different. This is wartime type management. This isn't the same is we're doing a week prior to the crisis, right? Everything has to change. This is a completely different level of communications, of focus, of management determination. And I think, uh, I think you tell me. But we were very specific about what folks did to Dio when when things went sideways. Um, and I think folks really appreciate

it. Yeah. I mean, I think making sure that, you know, you do explain that there will be changes right there. There are consequences to the changes. But here, the marching orders, here's what we need to do. Here's how you can put some of your destiny in your own hands and in take action, right. And I think that always feels good. Aziz you were going through that I was thinking back again on the example that I gave early around how different I felt about the crisis. Absurd jewel, because we ran into that willingly. Now,

whether you run into a willingly or not, I think it was really just a question of motivation, right? It wasn't necessarily that. Oh, we chose to do it. But the motivation level going into that crisis was very different. And so I think that's the rallying point, gives you something to be motivated towards, particularly if you can. You can be as objective as possible and quantify. You know these, you know, if you can really point out, it may not be quite a simple is saying That's the hill the artillery's coming from. Let's go knock the cannon off the hill and we'll be fine.

But being able to be very objective and quantify the rallying points and saying like Look, we need to achieve this so that this happens or so this doesn't happen right now. If we can maintain a 70% sales volume, everybody can keep, you know, full pay, full benefits. Nothing has to change, right If we slip into 50 60% range. Then then that's a different story, right? That's a hell of a motivation, all right? And it's a clear target. They know exactly what they have to dio.

They're different thresholds and how specific weaken be about those those rallying points we can say we need to save $20,000. And hey, we need every idea possible for people to come in in every single case when we've made that call that rally. Um, in the different situations that I've been in, I have been amazed how many people came out of the woodwork because everyone does want to help because, let's face it, all of our jobs depend on it and said, Hey, you know, we could actually cut this this, you know, one SAS cost that that, you know, we end up spending $5000 a year. Doesn't sound like a lot. I'm like,

Look, man, at which point, you know, we're trying to cut every expense possible every every

dollar matters. Yeah, that's

right. And I think right and I also think there's some psychology and I think for the folks that are saying, Hey, you know, it's the saving 400 bucks. I guess it's not a big deal. And they find out it is a big deal. The first thing on their mind to say, Let me see where else I could do that. Right? You know that. Yeah, exactly.

If you, like, four 100 matter does 200 matter is another 500 matter.

Yep. Look, it sort of does. You know, in certain organizations, infinitely big. You are in your cost structure, you know, with $4 may not matter. But I think the spirit of it matters. Even if even if the dollar volume isn't going to really change the outcome of the business, I think getting the entire staff on our side of the table, our side being leadership, saying Here's what we're all dealing of. This isn't about leadership, you know, kind of running everybody off the off of a cliff as lemmings.

This is all of us in this together. Here's how we're thinking about the problem. Here is the decisions were making based on that. And here's where you can help. And I think, look, if that doesn't work, it's because we all didn't make it work, not just cause leadership made bad decisions. And look, you know, in spite of all that, things may not work out. It doesn't always work out. I've had plenty of cases where it hasn't worked out. Um,

but I think what? We've learned it, right. I am. Um I'm proud of this experience. Is that going into the crisis, we know what to do. We know what it may not you know, may not save us, but I feel like we've got a pretty solid playbook and approach for kind of had to navigate.

It is it's, you know, the other analog here will, is the acquisitions that we've gone through. In the first couple of those, there was a lot more figuring out how to go through that process, what his diligence look like. What other questions when you don't ask? Um, And if you recall, like with with virtual by the time we got into that won, it was far easier in a lot of ways, because right, we sort of just said like, Hey, let's go figure out. If you want to acquire this company,

let's let's let's get moving. We didn't have to hand out a bunch of orders. I just remember kind of everybody in the team going into action and doing the things that needed to happen and very much the same thing with this crisis. It wasn't it wasn't like we had to go around the horn and say, Hey, you think we should find some some cost cutting measures? People came to the table the day of right the day we sort of knew this was gonna have a major financial impact. Everybody showed up with, like, years. Here's what we're thinking about cutting from our side. Um, here's what the impact. So that's absolutely and so it's fantastic, and I think that a big part of that goes back to this question. Motivation,

right? And so when we can put a motivation of people's hands that make them feel like they're having an impact, turn them into the hero instead of the victim. It makes a huge, huge difference in in their ability to execute on that and the the energy of the passion that goes into it, Um, and that cannot be overlooked. It's especially at times like this, we need that extra gear and and we need people to be able to take action on their own without having to be led through. Ah, everything you know by hand. For example, the difference in in me going to, you know, one of one of my drink working, saying,

OK, I need you to cut $1000. Um, come back to me and tell me what you're What you're cutting out is very different than saying, Hey, you know, we're looking at cost cutting measures. Let me know what you think you can do on your side, right? If they come back with less than I need, I may have to go back to him. But if I can leave a little bit of autonomy in their hands where they get to feel like it's their decision, they get to make the choice. And in reality, they do get to make the choice. Um,

it goes way better, right? And everybody feels better about you. Feel like you're contributing to something again, that that focal point and being able to rally towards that as a group. Um, but being able to know that your individual effort in all of that mattered a supposed to just being cannon fodder or lemmings off the cliff is a big deal

at its core when it comes to crisis, when it comes to a point where you know you've got to make some tough calls and you've got a lot of people that, you know, maybe constituents in the process. What matters is you're transparent. Everyone believes that what you're saying in the direction that you're giving is the truth, and it's something that they're willing to get behind. And look, man, even if the ship goes down and it often goes down, to be fair, I've been on one of those ships that are more than a few of those ships that have gone down. Um, at least we're going down together, right? At least we're going down fighting, and we both believe in the outcome.

I think it's like, you know, any kind of team, whether you're playing sports, that you know, you're in a military expedition, whatever, like your your all in it together. And even if it doesn't work so long as you're in it together on the same page, your at least willing to give it a fight, you

know, I mean, it's funny you say that, and it brought a very specific memory back, Um, you know, playing, playing youth soccer, and we lost a lot of games. But I only remember a couple of the losses, and the thing that I remember about those losses is the same in every case. But one of them was hugely disappointing because it was the championship in a tournament, another one cotillion, significant game. But the entire team was at each other's throats. Everybody was blaming everybody else for what was happening. And again,

it wasn't a consequential game. It didn't really matter. And yet what I remember about that loss was how everybody was on each other's case. Um, at half time after the game, giving each other shit of the next practice, it really hurt really hurt that. You know, the team performance, Um, but yes. Oh, and there were other times RINOs lungs. We felt like we gave it our all on everybody was together. Losing together felt better. Now,

not suggesting you lose. Don't go into shutdown just to figure out if this is if this is a good feeling, it's not, but it certainly hurts less if if you maintain kind of team cohesion, everybody's on the same page. again. You're running towards that rally point and it still doesn't work. At least you're running. You know that feels better every time. That's a wrap for this episode of the start of therapy podcast. This is Ryan Rutan on behalf of my partner, Will Schroeder and all the start ups dot com family thanking you for joining us, and we hope you'll continue to join us. Be sure to subscribe rate and comment on iTunes or wherever you love to listen. To start up there, you can find all of our episodes at start ups dot com slash podcast.

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