The exponential effect of investing in your business during a crisis

There are many things we need to do during these uncertain times in order to collectively get through to the other side. This is now the third major economic calamity since the turn of the century. The causes have been vastly different but the immediate effects are similar: panic, retrenchment, and pause.

If--no when--2020 follows the patterns of 2008 and 2001 and every other major economic crisis dating back to 1929, there will be better times on the other side. Many companies are, or soon will be, facing contraction: layoffs, reducing wages, shelved projects, limiting hours, etc. Survival must come first, however I would encourage you as a leader to think about how to stay invested--making smart, calculated bets across the most important aspects of your business.

It is critical to stay invested in important aspects of your business today so that you can reap maximum rewards when things turn around.

2008 came less abruptly than COVID-19 but it had a long-lasting outcome. During the time of layoffs and cost-cutting, I saw two vastly different approaches throughout my clients. On one hand I witnessed companies who scaled back and stayed scaled back for fear of the cash and credit crunch. On the other hand I had clients who smartly stayed invested in critical functions and tools. In finance terms it's the difference between doing the bare minimum to close the books and having the resources who analyze the trends and drive your business forward. In sales terms it's the difference between continuing to invest in tools to sharpen skills and build relationships versus cutting off all training and trimming people whose future value holds great promise but they become expendable due to current throughput.

Accelerating ROI

To put this in stock market terms, if you were able to buy stock over the past three weeks, you will be much further ahead when it rebounds than if you simply rode the wave down and back up with the same portfolio. Think about your business this way.

• Would implementing that new Business Intelligence tool while things are slow allow your company to avoid distractions when business is brisk and help drive greater outcomes once things are back on track?
• Would hiring that much needed CFO allow you to get things in order and be better situated when you start growing again?
• Would getting your sales team trained in an area that was needed but it was too costly to pull them out of the field better position you for the second half of the year?

If you wait until you feel the pendulum is swinging back to normal, and your competitor does what's necessary today, who is in a better position to capture market share? Your competitor's growth curve will be steeper. It's no different than planting flowers in the spring and not in the fall.

Right now many of you are in triage and can only focus on survival. For those who are pausing out of fearing the unknown, do your best to make smart investments in people and systems to reap exponential rewards. If you stay constrained in fear, when we come out of this--and we will--you will find yourself with a far smaller stack of chips than those who bet properly.