It’s been quite a while since I’ve posted here. Frankly, I’ve been rather busy, downsizing my company. I’m not sure which is harder – to manage a company when it is rapidly growing or manage one that is insidiously declining. From a personal and stress perspective, I’d rather have the former. But Christian stewardship often requires the latter. So, to the hundreds of thousands of business owners who find that, at one time or another, they need to downsize or “right-size” their business, I give you the following from my own experiences and then will talk about how my Christian faith has informed what I’ve learned.
First, you must be willing to terminate positions quickly. Don’t hang onto people who aren’t providing maximum value. No matter how you feel about them, be objective in their performance and act accordingly. The people you terminate will react in a variety of ways and how the react will confirm what you have intuitively known about their character. Some will accept it graciously – others will be furious. Most will not understand how their lack of productivity has led to your decision. A few will call lawyers and fewer still will use the system to extort money from you under the threat of legal action. What they do to you will be wrong – but it won’t matter and you can’t let it “get to you”. Just remember that in the minds of many lawyers and regulators, you’re an oppressive, rich business owner from whom money can be extracted under the guise of a larger moral notion of making things right.
My faith reminds me that I myself am fallen and that any redeeming qualities I might have are only because of the regenerating work of Christ in my life. Most of my employees are not regenerated by the Holy Spirit, so I need to remind myself that they will act in ways that are less than stellar.
Secondly, what people think about me is not my business. By the same token, what people think about you is not your business. We can’t control what people think about us, so we need to focus on listening to the Lord, follow His direction and let the chips fall where they may. If you’re a person who has a deep or strong need to be liked, then you’ll likely not be a good business owner. Why? Because being a business owner means being a leader and leaders often need to make decisions which are good for the organization but negative for certain individuals within the organization. Sometimes, you’ll have to choose between the two. *Always* choose in favor of the business or organization. But in doing so, people *will* go out and say negative things about you behind your back. Plan on it. It *will* happen. There’s nothing you can do about it.
When it comes to reputation management, the Bible has two basic commands for us to follow: A) *Always* protect the reputation of others by watching your speech when it comes to talking about others and B) concern yourself only with what God thinks of you. To my knowledge, the Scriptures never tell us to concern ourselves with what others think of us. Yes, we need to avoid appearances of evil, but appearance management is not reputation management. They are not the same thing. Focus on pleasing God and understand that sometimes, doing so means you will not please men.
Thirdly, when you think you have cut enough, cut a bit more. More than once I have made this mistake – I’ve not cut enough. I’ve cut to a point just above where I really needed to cut. What this meant was that I had more to cut. The agony and lack of profitability was prolonged. In order to cut effectively, you seriously need to understand your business and what your core strengths are. Know what your customers really want and do what you do best. This means cutting product or service lines that are marginally profitable. And it means keeping those employed who provide value 365 days/year. If possible, contract out the work that provides sporadic value or doesn’t provide continuous value or doesn’t provide “full time” value. Your legal obligations to contractors are far less than to employees. And it’s *much* more cost effective to let contractors go than it is employees. One of the real pain points, when downsizing, is that you’re likely experiencing cash flow issues. Terminating employees as a cost-cutting measure can further damage your cash flow. This doesn’t mean that you keep them employed, but it does mean that some vendors may not be paid on time as you bleed out payroll, PTO and other employee termination costs.
As a steward of that which God has given to me – a business – I need to ensure that this business is right-sized for market demand and that any growth is done in a careful, prayerful way to ensure any ongoing, additional costs are warranted based on customer demand. In other words, customer demand for my products and services needs to increase before I add ongoing expenses on the company. This si just good stewardship. My job is to produce wealth to support the Kingdom of God. The more profit I can create, the more I can give. It’s not rocket science.
Lastly, take the attitude that creating profit is good. Because it is. (Luke 19). For sure, if you don’t create profit, you’re business won’t last and you may go bankrupt. So, size your business to create the most profitability that you can. Size it right – not what you wish it was – but what it should be so that it creates maximum profit.