Entrepreneur, Prepare to Pivot

Entrepreneur, Prepare to Pivot
March 4, 2020 admin
In Entrepreneurs, Leadership
Entrepreneurial Pivoting During Disasters

SARS (severe acute respiratory syndrome) came around 2002. It was right at the end of the dot-com implosion. For me at Micrel this was the perfect storm.

This precursor to today’s coronavirus epidemic was a make-or-break moment for many tech companies. Companies with extensive offshore operations in China (both SARS and this coronavirus originated there) felt both immediate and long-term impacts. I studiously avoided manufacturing in mainland China for numerous reasons, though we had exposure elsewhere.

Micrel survived the SARS epidemic better than others in the semiconductor business because Micrel had a mindset and a team that could pivot in the face of disaster.

Here’s the thing – you will likely face a disaster too.

The mindset

Foremost, surviving any disaster – viruses, earthquakes, war – starts with a mindset of “be prepared.” I do not suggest paranoia (though famed semiconductor leader Andy Grove claims that only the paranoid survive). I suggest something more along the lines of a fire extinguisher. Nobody expects their house to catch fire, but most people keep one or more fire extinguishers around “just in case”. We hope for the best (no house fires) but prepare for the worst (house fires).

But you cannot possibly foresee every calamity. People and Mother Nature are quite inventive when it comes to disasters. To be prepared for business disaster takes a handful of rational precautionary steps.

Don’t spend unnecessarily: Cash will get you through a disaster and a lack of cash will only make the disaster worse … or fatal. Have three months working capital in the bank at all times.

Have some emergency planning in place: This includes your financials, HR policies, manufacturing production and supply chain planning, and such. Task your team with thinking through disaster scenarios and scripting plans for the best ways to pivot.

Decide quickly to shelter or evacuate: Waiting can be deadly, so don’t. If the disaster is likely to be transient, batten hatches and shelter-in-place until whatever is pounding your business is resolved. But if the disaster is long lasting or permanent – such as a change in your core markets – you may need to pivot your business plans and head for new territory.

The follow-through

As with SARS and coronavirus, it is how prepared you are and how quickly you respond that matters the most. Paramedics are very prepared to tend to injured people – just look in an ambulance and see that paramedics have nearly everything necessary to keep you alive. But paramedics also know how to triage rapidly, and thus minimize the ongoing danger.

Prepare for the worst, respond rapidly, but pray for the best.

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