In March 2020, after the first known case of coronavirus in the United States was reported not far from Gravity’s Seattle headquarters, our leadership team realized we needed to prepare for the possible economic fallout from this pandemic. In the weeks that followed, as our small-business clients were forced to close or cut back services, our revenue fell by 55% and we began losing roughly $1.5 million a month. Unless something changed quickly, we calculated we’d be out of business in about four or five months.
Most CEOs in my position would default to traditional business wisdom and either lay off half their staff and/or raise prices to customers. MBAs and executives often justify these drastic measures by saying they’re necessary to stay in business. Gravity, however, is different. We pride ourselves on never prioritizing the short-term financial health of our company over the well-being of our customers and employees. Raising prices to clients who were already hurting or letting go of employees who had bills to pay and families to take care of could end up causing irreparable harm to them. I wanted to avoid that at all costs.
But that didn’t change the fact that we were in trouble. We needed to find a way to survive while remaining true to our values. But how?
4 Strategies for Leading During a Crisis
In more than sixteen years as a CEO, I have learned a lot about leading during difficult times. Faced with the COVID-19 crisis, I came back to four essential principles that ended up working for us once again.
- Be Honest. Many leaders opt to sugarcoat the truth so as not to cause panic among employees. But if your employees don’t understand the reality of the situation, they can’t rise to meet it. Share the brutal facts with your team. Do not water them down at all. When trying to figure out how to respond to COVID-19, I decided to hold an all-company meeting in which my COO and I laid out all the harsh facts of our situation. We told them how much money were losing, what we had already done to cut costs, and some of the options we could consider moving forward. By getting us all on the same page early on, we were able to get everyone to work toward a common goal.
- Listen. Our team is so much smarter as a group than I could ever be individually. Instead of coming to them with a top-down solution or proposal, I asked them for their ideas. At the all-company meeting, several people suggested the idea of a temporary, across-the-board pay cut. But we decided not to stop there. Over the next four days, our COO, Tammi, and I met with each of our employees over a series of small-group calls. This gave everyone an opportunity to ask questions, offer feedback, and propose ideas and allowed us to get more perspectives. During these calls, several people pointed out that, while they would be willing to take a pay cut, they didn’t think it should be mandatory or decided on by management. Everyone at Gravity has different financial obligations, so while some people may be able to absorb a temporary cut, others may have a harder time making it work. In the end, we gave each employee the opportunity to decide on how big of a pay cut, if any, they could give. Ninety-eight percent of our employees volunteered to take some sort of cut. Collectively, they saved the company 20% of our expenses.
- Be Humble. Ask for help when you need it. Acknowledge when you don’t have all the answers. Share your successes and failures. Be open. Be vulnerable. I shouldn’t have to tell people to treat their employees and coworkers as human beings, but we often forget to do this when we’re trying to run a company. The more humanity you show to your people, the more they will respect and open up to you. The more you can connect in this way, the stronger you will be. This is especially true during a crisis when things are uncertain and everyone is stressed out. Take a moment to breathe and to build connection. I’ve worked side-by-side with some of our employees for over a decade, but I feel closer to all of them in the past few months than I ever have before. Hardship brings people together, and together you are stronger than you can ever be alone.
- Remember the difference you can make. One thing I have repeated to my team over and over these past few months is “We can make a bigger difference in the next sixteen months than we have in the past sixteen years.” Because we had decided to stay true to our value of helping small businesses, we knew we could be there for them in a way that other companies who were panicking and just trying to make money could not. We also knew that by coming together to solve this problem and by helping each other out, we could build a stronger, more sustainable company and feel genuinely proud of the work we were doing. At Gravity, we feel like our mission, not our company, is the most important thing to preserve, and reminding ourselves of that commitment helped us stay focused. Ask yourself what story you want to be able to tell when this is all over. What kind of decisions do you want to be able to say you made?
Ultimately, these four lessons come down to something that may sound like a cliché: teamwork. By trusting your employees to help you and listening to their feedback, they will be much more likely to take ownership of the task ahead.
Gravity CEO Dan Price writes frequently on American business. Follow him on social media @danpriceseattle.
This post was adapted from “CEO Corner: How to Lead During a Crisis,” part of the free Gravity Talks webinar program. For more information on past and upcoming webinars, visit www.gravitypayments.com/talks.