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How Leaders Deal With Moments Of Existential Crisis

A failing business is not the end of the world, but what if your life is imploding at the same time? Entrepreneurs share their stories.

How Leaders Deal With Moments Of Existential Crisis
[Water balloon explosion: Esterio via Shutterstock]

Jay Myers didn’t start his videoconference technology company Interactive Solutions, Inc. in 1996 thinking it would be easy. But he also didn’t imagine getting to the point a few years ago when he’d be reeling from so many crises that he’d be scared to turn off the lights at night in his bedroom.

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A gloomy pattern had emerged for Myers. Hit the lights. Crawl under the sheets for a few hours’ sleep. The shuteye meant it’s much closer to a new day, when fresh chunks of sky would fall, and more bad news would land atop the pile he thought had already stretched him to his limit.

All at once, a handful of sales and customer service representatives at the Memphis-based company he founded resigned, which simultaneously threatened to vaporize a big piece of the company’s income if Myers didn’t do something about it.

“You feel almost traumatized,” Myers says. “I was feeling kind of lost at first and had to gather myself. Thinking about this leadership-wise, though, the one thing we didn’t do is we didn’t panic.”

Also around that time, a technician at ISI went into the hospital for a liver transplant–and never left. While changing shirts so he could attend the funeral of a close friend, Myers got a call from one of his managers warning him the technician had taken a turn for the worse. He’d soon be attending two back-to-back funerals.

If that wasn’t enough, doctors diagnosed Myers’s wife Maureen with breast cancer around the same time. In addition, the Great Recession was gearing up to tear a big hole in the balance sheets of companies like his.

“When is all this bad stuff going to end?” Myers remembers thinking. “How much can one person take?”

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Leading During A Crisis

Uncertainty is part of a startup founder or small-business owner’s career path. That uncertainty includes crises; everything from typical ups and downs to dangers more existential. This is when one wrong move–such as a big customer departure, or just a run of bad breaks like Myers experienced–can make it seem like an untimely end is in sight.

Entrepreneurs say these experiences have taught them a variety of lessons about leading in a crisis.

The departures en masse at ISI left Myers stuck with many challenges to grapple with, including how to replace several million dollars in annual sales revenue that had basically walked out the door.

His immediate battle plan:

  • Don’t waste time
  • Reevaluate business strategy
  • Figure out what resources are on hand
  • Immediately get to work squeezing the most out of them.

Myers recalls ISI had hired some younger sales professionals, so the way forward partly involved giving them “a good pep talk and intense training,” and bringing them up to speed–fast.

“I grabbed some sales accounts, too,” he says. “I improvised. Engineers pitched in to fill the gaps. People can look at a crisis, and panic and fall apart. We said: ‘Let’s look at this as a clean slate.’”

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Moving fast to meet a crisis head-on is something Andy Sack, Techstars Seattle’s managing director and the cofounder of Lighter Capital says he also got through a similarly rough period–albeit one with much higher stakes than Myers’.

Lighter Capital grants funding for growing technology businesses. Sack’s priorities for the business and where he wanted to take it got waylaid temporarily in 2012 when doctors diagnosed him with cancer.

Because he needed to focus on the personal battle ahead, Sack delegated authority to a team that could make decisions about Lighter Capital in his absence. Later, he met with the company’s investors and decided a new CEO was needed, while Sack continued his fight.

Sack, who’s cancer-free today and serves as Lighter Capital’s chairman, says that period involved sticking to a few basic priorities.

“We moved really fast,” he says. “I recognized my limitations and gave authority to the team and told them I’m going to try to be involved day to day, but don’t wait on me. I’d rather you guys make decisions and act, and if we make a mistake in that way and I want to go in a different direction, I’ll course-correct. But otherwise, go.”

After Sack beat cancer, the company brought on a new CEO. “Lighter Capital today is doing great,” he adds.

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Correcting Bad Calls

Crises aren’t always unlucky twists of fate from the outside that one day materialize at random. They’re also the result of a bad call, of getting it wrong, and taking the lumps that go with making that call.

Israeli entrepreneur Benny Shaviv fell recently into that category. He’s the CEO of Clear Sky Apps, maker of about 20 fitness and productivity apps, including the popular Couch to 5K app.

Until recently, the company had several apps in the Top 100 Paid Health and Fitness rankings for iPhone and iPad. Until Shaviv says he made a wrong bet that ended up putting the company temporarily on its heels.

His team decided its suite of 14 fitness apps was aging and needed a redesign, which would come in tandem with the launch of iOS 8. In fact, Shaviv says, they decided to make the apps only for iOS 8.

What they’d lose in iOS 7 market share, he thought, they’d make up for in other ways. They pulled some older features not deemed as important anymore. The company also relied on Apple’s new HealthKit service for the update.

When Apple removed HealthKit from the original iOS 8 release, though, Shaviv’s team scrambled to fix their app suite.

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“We went from a perfect five-star average on all our apps to reviews like: ‘I used to love your apps and now I hate them,’” he says. “Customers complained that we pulled some of the features they loved. To add to that, iOS 8 adoption is slow, and HealthKit is only now back. All of this turned into a big slide down in sales volume and loss of market share.”

One lesson he says he learned is in the future, there’s no need to rush to be out front when Apple puts out new technology.

Meanwhile, some of the right moves the company has made in the past are helping it now.

“We always knew how important financial stability is, so we saved up for a rainy day,” he says. “We also have a varied app portfolio, which keeps us financially stable even in hard times. We never took investments from anyone, so I don’t need to waste energy and management attention on explaining ‘the fail’ to them. Most importantly, we’ve built an amazing team. They worked nights and weekends and did the incredible–redoing all the apps.”

Demonstrated Leadership At The Outset

That last part about team building suggests another lesson that cuts across the stories of these and other entrepreneurs confronting sleepless nights and tough calls associated with crisis leadership.

Eli Israel, CEO of Seattle-based social media startup Meshfire, says the way forward quite often depends on the past–on the hard work and the right choices that brought the entrepreneur to this point in the first place.

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“What I’ve found is that getting the team through the tough days is not so much about what you do on those particular days, but it’s about what you’ve done every day leading up to that,” Israel says. “Demonstrated leadership and care for the team over long periods of time is what gives a leader the banked goodwill to implement difficult changes.”

About the author

Andy Meek is a freelance writer for Fast Company whose work also has been featured on Buzzfeed, TIME.com and Business Insider, among other places. He lives in Memphis and can be reached at andrew.e.meek@gmail.com.

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