[YS Learn] 9 tenets from Vani Kola’s playbook for crisis management
The coronavirus pandemic is a learning experience that everyone needs to gain from. The unprecedented situation shows us that founders need to be prepared to deal with the toughest of situations.
Vani Kola, Founder and Managing Director, Kalaari Capital, lists down nine steps that founders can take and build on to manage their startups during crises.
Assess the magnitude of risks
A risk doesn’t mean that you shouldn’t have attempted something; it is about understanding your odds. It is important to do a pragmatic SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis.
“We understand the upside and our strengths. But we are unwilling to look at our weaknesses and risks. Understanding weaknesses and risks can only help you strengthen outcomes,” Vani said.
Identify your key uncertainties
Understand your key uncertainties during the process of SWOT analysis. There are always uncertainties in a business, and understanding contingencies and continuity is important to keep the business running.
Vani explained, “Often when I ask what would you do under different risk situations, there are entrepreneurs who don’t have answers. Founders seem to feel that there is a possibility of accepting a failure if they look at a contingency plan. I come from a school of thought where the best companies create strong contingency and continuity plans, and 90 percent of the time won’t have to use them. The remaining 10 percent is the time when they go ahead and others don’t.”
Engage and align with all stakeholders
Whenever there is a crisis, engage and ensure alignment with all stakeholders on the way ahead. This goes back to the trait of not wanting to discuss bad news or problems. All stakeholders want to hear good news, but if something is not going right, they already know it.
The capacity to have authentic conversations and carry all stakeholders with you is an important leadership trait.
Create ownership and empowerment
“This is one of the most difficult transitions for founders - to empower others to work on their vision,” Vani said. But it is an important aspect to ensure growth and continuity of your organisation.
Prioritise customers and employees
“I always ask companies: are you able to fulfil your customers orders? In crisis, the first order commitment is to be able to deliver to your customers. There are certain fiscal disciplines that it’s important not to cross - make sure you service your customers first, followed by employees, community, suppliers, distributors, and then investors. If your customers and employees are not taken care of, the capacity to take care of your investors is minimal,” Vani said.
Communicate about everything
Don’t bury bad news, don’t stonewall, and don’t hide facts. This undermines your credibility and trust, and once that is gone it is impossible to get it back.
You may be stressed or have butterflies in your stomach, but it is your responsibility to be the symbol that inspires confidence and faith. This needs you to be honest and give the reassurance that you can tide through this time together.
Be prepared and flexible
To be level-headed and plan for contingencies, you need to be prepared and flexible for different scenarios.
Lead with integrity
Speed of response and action help during a crisis. But things need to move forward with a sense of integrity and faith. Take the decisions; don’t drift because the task is unpalatable.
“Deal with the unpalatable today and don’t leave it for tomorrow. Learn to look at the silver linings and make an opportunity out of every crisis and situation you may face. The challenge of the stormy sea can also be an adventure that can take you to the next level. There are always new things to look forward to in all crises,” Vani said.
(Edited by Teja Lele Desai)