Why Companies Built for Just the Good Times Don’t Last

Published on: October 4, 2012

Folks, hate to be Mr. Pragmatic Realist, but in the emerging company world full of often deliriously optimistic people, I can’t help but feel this way after a decade and a half in the “trenches”. When I look at the companies myself and my fellow execs have worked in, there is one very clear trend with those still around – businesses built with resiliency, resource scarcity, team loyalty, and sub-optimal conditions in mind are still thriving, others – bankrupt.

I am not preaching doom and gloom (that is for politicians), but what I am saying is that while you project measured optimism pointing to the inevitable highs, you should also be pragmatic and realist to the core, because some hard lows will hit at some point.

Why build companies for when things go wrong? Because as any seasoned business person will tell you, the company needs to survive and do well during hard times in order to take advantage of the upswings. Angry Birds maker Rovio almost went out of business before their now world-renown game became a hit, WD-40 – same, Pinterest – same. A couple of companies I was part of went through the same challenges.

Thinking of several contingency plans makes you well prepared. And the act of being ready is like building cheat-sheets or index cards – you often don’t need them because you’ve already committed the proper response to the proverbial muscle memory of the company.

Being conscious of possible bad times around the corner makes you think twice before wasting resources and hiring people who will not stick around when the you know what hits the fan.  It also motivates you to focus your attention on the customers who will refer others to you and forgive if you make a mistake or two (which you will).

Keeping your humility means you will get over the BS that you are the hottest company to work for (even if you are, tomorrow you may not be for millions of reasons that can pop up), so you will treat your people with a lot more care, appreciation, and respect. The worst leaders are those who think they are the smartest ones, or another Steve Jobs (or whoever they idolize), only to find out their people were running from them like a rotting pile of garbage.

Finally, in order to create the largest (positive) wake, you have to inspire a loyal team.  If you call your employees at 4AM in the morning and ask them to show up with a tarp and a shovel, the only question you should hear is “where?”

Here is my main message: those most prepared for the down times don’t seem to hit the bottom as much as those who are foolishly optimistic.