Stress Solves Nothing

Every problem is not a crisis (aka; don’t start swimming till you hit the water)

Negative situations tend to spawn the worst small business decisions, especially from the least experienced among us. A fire drill approach to problem solving can at best lead to overreaction and at worst downright panic. Small businesses in general lack resources and staying power, making it that much harder to react calmly when the wolfs at the door.  Stress is the enemy of rational thought, identifying the magnitude of any threat minimizes stress.

Problem impact levels

Lethal – Will result in immediate or near immediate demise of current operations.

Critical – Urgent attention required to avoid escalation to lethal status.

Crucial – May cause significant financial or operational problems but not unavoidable.

Typical – Could be costly or time consuming; will only become a threat if totally ignored.

Lethal

Creativity and calm analysis are required at this stage. Big picture questions come into play; is the business savable by any means? How much am I willing to risk personally to continue on? Are the causes of the downfall beyond my control? Is major action (bankruptcy, sale, partnerships, liquidation) a viable option? Will surviving for a specified period of time allow the situation to improve?

When things reach this stage it is absolutely the end of business as usual and if you do survive, things will never be the same.  Lethal problems don’t just pop up, they are generally the result of long term trends or failure to keep smaller issues from growing in severity.

Critical

Urgency is your ally when dealing with critical situations; loss of a customer accounting for more than a third of your revenue, partnership, bank or investor issues, employee theft of trade secrets or customer files, major legal actions … product liability, patent issues, customer bankruptcies, etc.  A prolonged severe market downturn always hits small business first and hardest. The lack of deep pockets, limited access to capital markets and the value of each individual employee makes it impossible to downsize or cut your way out of major drop in revenues.

Crucial

It’s fortunate that crucial problems can normally be solved or avoided entirely with immediate action because they occur with stunning regularity. You lose an employee with exclusive knowledge of a valuable business function, suffer prolonged equipment breakdowns or fail in a bid to win a big contract. You realize that your collection efforts for a major account have moved from the “when am I going to be paid” to the “am I going to be paid” stage. Natural disasters, accidents and full blown stupidity (having an employee take a bath in your fast food restaurant sink and put in on You Tube comes to mind) can all be crucial situations. The trick at this level is to avoid overreaction or inaction. Acknowledge that while this problem is neither lethal nor critical, it is significant. Dealing with crucial problems effectively can establish the important skills and systems needed to deal more severe issues.

Typical

Many typical problems never really go away; a troublesome competitor, slow turn receivables, dead inventory, outdated equipment. Allowing these persistent issues to produce “out of level” reponses can make it difficult to rally the troops when a truly significant crisis occurs and impossible to maintain the positive outlook (and company morale) needed for success. Mentally pooling all your business troubles without regard for the relative importance or potential consequences of each is no way to run a business. When something occurs ask yourself … is this going to cause my business to fail?  If I do not commit full attention and resources to this problem could it escalate toward business failure?  Is this an issue that can be avoided or solved if tackled immediately? Is this just an annoying fact of small business life?  This mental exercise not only dictates the appropriate response level and reduces stress; it will remind you that not every problem is a crisis.

James A. Krause … The Dogged One … 2009