My business mentor once told me something that has helped especially in turbulent times but generally applicable in all aspects of business leadership. He told me that regardless of the situation you find yourself in, do not overreact; always be calm and take time and measure your reaction.
Suppose your best employee gives you a quit notice or your competitor lowers the price or introduces a new product designed to give you a run for your money. Suppose your team comes up with unrealistic demands and issue ultimatums if they are not met.
There are times when people and situation around will bring up challenges that seem insurmountable. There are times when everything that can go wrong seems to go wrong unabated. When this happens and your leadership is put to test, the best things you can do is to remain level-headed. Do not make rush and emotional decisions. Do not rush to make decision even if the situation seems urgent. Always sleep over it.
Avoid the temptation of acting without complete information and knowledge of the situation. Take your time to digest the news, analyse the situation and put on the table all possible ways you can react and possible outcome of every action.
Nothing happens without a reason. But the reason may not always be valid, informed or realistic. You need to dig deep to know why the competitor is lowering their prices and whether that it is sustainable. Even if it were to them, find out what impact it would have on your business if you decided to follow suit. Also remember competitors’ low price may not necessarily mean your customers will leave you in droves. There are other ways you can counter that move such as value addition, better marketing and customer service that bring convenience to your customers.
Employee demands may be irrational and based on what happens or what they think happens in other companies. They could be based on incitement from internal or external sources with ulterior motives. Find out the real reason and craft proposal that looks at the interest of all parties.
Getting angry and yelling at people to assert your authority hardly helps. Calmly and humbly speak your mind and put on the table what you think is possible and sustainable. Indicate your willingness to allow whoever is concerned to explore other options with your blessings, leaving the window open for future engagement on mutual gains. For example, let the customer deal with the provider who best meets their demands. Let your employee leave and go for greener pasture. Do not be tempted to give an offer that you cannot sustain for fear of losing a customer or employee.
Remember the saying that turnover is vanity, profit is sanity but cash is the reality. Turnover is vanity is basically about your ego. ‘Profit is sanity’ is one of the reasons you are in business while ‘cash is reality’ is what keeps you going.