I remember the moment well. I was supposed to be relaxing on vacation in the fjords of Norway, late spring of 2017. I just came from visiting good friends in Germany and then made a quick stop in Sweden. Upon landing in Ålesund, I had friends pick me and we began the two hour commute to their home island. For those not familiar with Norway’s geography, Norway has over 50,000 islands so everyone lives on an island and work traffic is not on a highway, but rather a ferry. As I began to adjust to the new pace of life, my world back in the States came tumbling down.
Let’s rewind a bit.
In 2017, I was the ripe age of 29 years old. I had employees for five years running, had two offices in Dallas and Houston and successfully scaled with national clients in the manufacturing and industrial industries. I was constantly traveling – one year alone I had traveled 45 of 52 weeks – and had a team who was building out the vision I had in mind. We were on the way to be on the forefront of creating effective video marketing strategies that would drive results for our clients and I couldn’t be more excited about it.
I couldn’t have been more wrong.
On that quick European tour, I didn’t come back the same. You see, instead of a relaxing time overlooking the Geirangerfjord, staying in a small cabin nestled by waterfalls and right next to the river, it was anything but peaceful. For the last 6 days, I’ve had non-stop calls and emails all complaining about my team: calls from my clients, calls from our contractors and calls from my own team.
What had happened? Frankly, I didn’t know and that was the problem. Our largest client threatened to never work with us again, our contracted team of creatives said the same thing and I began to find out problems about our employees. What I thought was a rosy picture of continued success was actually a delusion and I was only at the tip of the iceberg. The scene of serenity did allow me to quietly think through the next steps in the midst of the chaos, and bankruptcy quickly became an option. With clients threatening to leave us, and our treasured team declaring they’d abandon us, I didn’t see what else to do. As a small company who is hugely dependent on cash, we would quickly run out of money as we were paying tens of thousands of dollars a month on our overhead expenses. As I was across the ocean on a different continent, I made countless calls working to determine what exactly happened and, more pressing, what to do next.
What emerged slowly was a picture of complete and utter disconnect between our team and our clients. Some people on my team were treating both the clients and our teammates terribly, which was causing our clients to nearly fire us. My team was also in a complete state of disarray, and I discovered dozens upon dozens of wasted hours from my team working on projects with no obvious mission in mind. Thankfully before people jumped ship or fired us, they sought me out to sound the warning. As the head of my organization, I, ultimately, was responsible for this mess and was quickly forced to begin making hard decisions.
The most urgent thing I was concerned with was cash. We had a half dozen proposals that weren’t closing and our cash on hand was quickly going out the door as scarcely as it was coming in. The silver lining that gleamed brightly in the midst of the gloom was this: our new Dallas office contract was up and I was in the midst of signing a five year renewal. I had given written approval but the brokers never actually sent over a contract for me to finish the deal. Therefore, I was home free, clean, in a lucky break, as it is largely known breaking a commercial contract is next to impossible without putting up a massive amount of money. That proved to be the only good thing I had for the next few months.
While still in Europe, I decided that bankruptcy wasn’t the way to go. After looking over this, I decided the heartache of what comes with bankruptcy was not worth the trouble of doing it. We had maxed out our $100,000 line of credit, but we still had active marketing retainers and projects that were bringing in some cash. I decided it was best for me to take back on the role of account executive (or project manager to those outside of the agency world) and manage the projects with the help of our contractors. What I could not afford was keeping on the employees nor the Houston space.
I pieced together a plan that I then executed a day after I landed back in the States. Though extraordinarily difficult, I decided to lay off all of my employees, not renew the Dallas office space and terminate the Houston lease contract. The end goal was to save the company and rebuild it, though I was now at the point of needing to learn a ton in order to do this successfully. Once having the support team to run campaigns and projects, I now had to do everything in the midst of sitting down with both clients and our contracted team to listen and apologize, promising to do better in the future and asking for another chance. This moment was incredibly humbling, as I truthfully had lost touch with people in the midst of rushing to grow my company. Over the next few months, I began to learn more and more devastation and realized that I had been on a trainwreck waiting to happen. The breaking point for me was finding out that we had a significant amount of debt that we had no idea existed. This required me to pursue litigation, which dragged on for nearly two years before it was resolved.
Three years later, what can I say now? I can say that we are a far better company than we were before. I now have the best team to date and our clients have remained loyal throughout this season, to which I can’t be more thankful for. After watching this nightmare unfold, I can confidently say that I’m thankful to have learned the following four lessons in my early 30s versus 40s or 50s. I’m convinced that these lessons are applicable to anyone building a business and will lead to failure if not embraced somewhere early in the journey.
Lesson one is that people need leadership:
- This lesson is obvious in hindsight but where I ultimately failed. I did not yet build a strong enough internal team to leave as often as I did to sell. Though they tried to execute what they understood what the projects were, the team wasn’t actually building what the projects needed in order to be successful. On top of that, the dozens upon dozens of vain hours took out any profit we could have made and we bled.
- What I learned is to clearly communicate in what we were doing for each project and what the expectations were along the way, from both an internal perspective and client perspective. Previously, I assumed that people would just ‘get it’ if I said the overview of the project and they would ‘figure it out’ along the way. While this is more of my style, this is not usually the case with others.
- Now, we have project templates that we use in order to get all needed information to specific people in order for the project to be a complete success, along with project briefs, mood boards and budgets for all tasks involved. I now strive to get the “right butts in the right seats” and I review progress along the way to ensure it’s going in the right direction. Needless to say, our projects now move much more efficiently, are within budget and rarely have mishaps like we used to see.
The Right People are Everything
- This lesson is absolutely critical to the success of any organization. Even if you have the greatest idea out there, you will never make it if you don’t have the right people surrounding you to take your vision and make it into a reality. The word ‘right’ was the learning part for me, as I was accustomed to having people around. I was also accustomed to having people leave after a short period of time, people creating strife in the workplace and talking negatively about others. There should have been no surprise to end up where we were and it has been a hole I’d like to never end up in again.
- What I learned is that values need to be discovered (everyone already has values…you just have to find out what yours are), and built around. Values drive a human being and you will never be able to drive their values out of them. Make it easy on yourself and align with people who have similar values like you. Clearly communicate the expectations around values upfront to ensure you’re attracting the people who would thrive in your culture.
- Today, I’ve completely changed the way I hire. Instead of asking standard hiring questions (what are your strengths, etc.), I now focus on pulling out the person’s values and communicating the expectations we have for each other. One of the questions I ask is “Tell me about a time you were working and not getting the results that you desired/wanted and what you did to change those results.” This question allows me to see the person’s work ethic and how they react when against an obstacle. The goal this year is to create cards that show our values and mission so people can easily see who we are, and constantly talk about it being the winning formula for our success. Even if you did hire someone who doesn’t actually fit within your value system, this type of environment will quickly expose them for who they are. Just bite the bullet and let them go, as it will never work out long term. Go find others who are like-minded and go make the world a better place.
- One of the exercises we did to discover our values was describing the attributes in people we enjoyed working with. This made it much more practical and real in why we liked working with those people and turns out, was across the board with all the others that we enjoyed working with. You will always have different personalities and different personalities, but values will remain the same for all if the organization has sought to build around them.
- In case you’re curious, here are our values as a team here at Fresh Ink:
- Team player
- Hard working
- Pride of work
- Good Communication
- This lesson is something that I am still learning to do well. Though I myself can clearly see the vision and mission, I tend to be more introverted with my thoughts and not share it with others. I can get lost in the immediate tasks that we need to get done and fail to paint the bigger picture to others.
- What I learned is that people want to see the purpose in what they are doing and that it is a primary driver in motivating a team. While money is an important part of the decision in working at a company, it does not mean employees will gain fulfillment or satisfaction in what they are doing. If they are apart of something larger than themselves and share the values of the organization, they will be much more motivated to work harder and take ownership in achieving the goals of the organization.
- Presently, what I’m doing is working to be incredibly clear with our mission, goals, values, opportunities and finances. We just finished our 2020 Strategy meeting in which I outlined these points, and we discussed it as a group. This year, I’m working on a bonus plan that outlines specific goals tied to monetary gains. I’m designing to have the majority of the bonus come from one’s own control, as well as overall team objectives that everyone is tied to.
Accurate Financials are Critical
- This lesson feels like a ‘duh’ moment after these three years. Since I was only 24 when I hired my first employee, I really did not know what was expected of others and did not see the warning signs until it was too late. I’ll admit I was naive and trusted others to do oversee the most important aspect of any company – cash – and had to learn the hard way of managing cash flow after being awakened to the reality of having hundreds of thousands of dollars in debt I didn’t know existed.
- What I learned is that you need to have people who value integrity and who do the right thing when no one is looking. If you pay attention to the person, you can soon see what the person values and then make your decision to retain the person or move on.
- What I’m doing today is night and day different. I have a new trusted accountant that stands by her integrity. She lays out our annual budget and then reconciles on a monthly basis. In order to pay off the debt, we created a plan in how we would cut nearly all overhead expenses in order to make the monthly debt payments. By the grace of God, we were able to pay down all $300,000 in 18 months, averaging our debt payments of $18,000 per month.
Taking a hard look at myself and my organization, I know I’ve made mistakes. The good news is that I am learning from those mistakes and have been able to turn around my company and put it on better ground. I wouldn’t have been able to make these difficult decisions without having trusted individuals surrounding me with sound counsel and encouragement along this journey.
I’ve mostly learned that I can do what is needed in order to build a successful company and I am here to encourage other entrepreneurs and business owners to keep going in the midst of those challenging times. It’s known that 50% of businesses fail in the first five years of business and thus, we need to be leaders who are resilient in order to overcome. These hard times will only make you stronger and a better leader. Keep your eyes on the goal, surround yourself with people who you can trust and encourage you, and make those difficult decisions. You, and your company, will be better from it and you’ll keep soaring higher..
If you have any questions or thoughts you’d like to share, I’d love to hear. Feel free to send me a line at email@example.com.