My career has been full of many tough decisions. Sleepless nights, contemplating over if I'm making the right call or not. Yet another phone call to that trusted advisor. Looking for ways to avoid them, knowing all too well that the only way forward is through.
While this insight is called "3 decisions every leader should prepare for" I honestly believe you can never fully prepare for the decisions others have been too afraid to make. You can only get to terms with them eventually showing up, face reality, and act.
1. Strategic pivots
In my first CEO position, I stepped into a company falling apart. A merger gone wrong with a strategy to grow quickly and then let someone acquire them. The acquisition never happened. And the company was stuck with a large part of the business being unsustainable.
For too long, they had relied on the wrong type of business with the wrong customer. And because of it, they were bleeding money. So, I made it crystal clear to both the customer and my organization that things were about to change.
I took the management team to an offsite to figure out what's next. What the market told us. What our customers showed us. It quickly became apparent that the organization had known for quite some while what the better strategy was. We put it into motion.
For the first time in the history of the company, everyone agreed on next steps. The team, the board, the owners. We had customers lined up. The skills needed. Tools. The lot.
Then Covid hit and we never got the chance to see the new business thrive. But that's a story for another time.
Realistically, most organizations never face the need for 180 degree pivot in the way we did. But I've also stood in declining organizations where we didn't ask if a pivot was needed. We determined it was. Until we sat down and spoke to our community. Turns out, a pivot was the opposite of what we needed. We needed to double down on what actually worked. Less than a year later, long term financial stability and nation wide presence had been re-established.
Lesson learned: don't always do the pivots. But to continuously ask yourself if you should. It unlocks insights, perspectives, and discussions you'd never have by just doing business as usual. Sometimes the discussions will lead to a necessary shift. Other times they'll let you rediscover the core of your business and let you double down on it.
2. Letting people go
The hardest part of leadership for me has always been to let people go. And it is a strength, because letting people go should never be done on a whim. But that does not mean that you should avoid it at all costs. Quite the contrary.
Staff cuts are always too late and too small. Finn Johnsson.
My first chairman, Finn Johnsson, once told me. Whilst in the middle of making my first redundancies. It felt like severing a part of my body, so naturally I wanted to punch him in the face. In hindsight, I know how right he was. 2 months later we had to make another round and that one hurt everyone even more.
There are many different reasons why you might need to let people go. You can be in the middle of a deep crisis. Your company might be in need for a completely new type of competence and re-skilling might not be a viable option. The business can have outgrown some people or some might have consistent low performance without any progress.
Regardless of reason, there are better and worse ways you can do it. When faced with it, I always follow these rules:
- There's no pride in avoiding letting people go, rather the opposite. Avoiding this decision puts your business and best staff at risk.
- When you've decided, act as soon as possible. No one benefits from you procrastinating. There might be legal aspects that prolong the process, but you should never be the one to delay.
- Do it with empathy. Even if it's someone you don't get along with or a person who has underperformed. Treat them as humanly as possible. Give them a fair deal. Thank them for their time.
If you're currently facing this, I highly recommend you read the section of firing people in the book "the hard thing about hard things" by Ben Horowitz. I wish I had when stood in that situation.
3. Leaving the organization
This is the one decision I almost never see leaders prepare for. Some have a detailed career plans, including steps they plan to take and when. Which in a way is planning to leave the organization. But it's driven by the leader's own ego and ambition for themselves. Considering you've found your way to my corner of the internet, my guess is that this isn't you.
So if not leaving for your career why leave at all? Especially when you're doing a good job?
It sounds counterintuitive, I know. But the time to leave isn't when you've started to do a bad job. It's way before that.
I see a lot of people taking pride in their roles. Especially executives and founders. A common pitfall I witness is the confusion between having done a great job and being the right fit for the next phase. They're completely disconnected from each other performance wise. Completely intertwined emotionally.
No leader can be great through all phases of a company. You're no exception. You're perhaps just holding on for too long. Ask yourself:
- which situations make me come alive the most?
- how and in which situations do I create the most value?
- what does my current job actually look like?
Hand on heart, how does the Venn diagram look? A big overlap? Stay. A decreasing one? Plan for your succession. A gap? Step aside.
Another thing to prepare for…
It's not a decision in itself, but I feel it's too important to completely disregard.
Prepare for everything going straight to hell.
If the 2020s should've taught you one single thing it's this:
Every thing can be thrown upside down from one day to another.
The pandemic. A ship getting stuck in the Suez Canal. Everchanging tariffs. Volcano eruptions. War.
No one can predict the future. Or prepare for all potential scenarios. But having a few extreme scenarios up your sleeve is surprisingly valuable when shit hits the fan. Even if the excrement is different than the one you planned for.
I recently spoke to a senior board member whose company suffered from an unexpected natural disaster. Media were on them. The public had demands. The management didn't know how to act. And the board decided to lean on what they had: other worst case scenarios. Was there a complete overlap? Definitely not. Was it enough to get them started and to have something to lean on? 100 %.
And this is also something I wish I had in my first CEO position. We couldn't have expected a global pandemic and flights being cancelled for months on end. But we could've prepared for major disruption in flights and had some blueprint to follow. We would've acted quicker and wiser if we'd had that in place.
Final food for thought: just because it is hard doesn't mean it's wrong
Often it's the opposite. Running a business is hard. Tough calls have to be made from time to time.
Treat your fear and worry as data points. Not as a source of truth.