Keys to Small Business Resilience in Uncertain Times
Businesses have come through hard times and often traumatic events before. But today what feels different is the timeline. In the case of a fire or burst pipe, owners and stakeholders may be able to predict when the problem will be fixed and make plans for when business as usual may resume. But what can they hold onto in the uncertainty of a global pandemic? As infectious disease expert Dr. Anthony Fauci so bluntly put it, “You don’t make the timeline, the virus makes the timeline.”
Faced with a limited customer flow at best, forced shut down of operations at worst, and a looming economic recession, this uncertain timeline leaves small businesses to decide what is best for the company and its stakeholders without knowing what the future holds. What lessons can they take from the success and resiliency of other small businesses that have survived crises?
Focus on Transparency
The reach of a small business goes far beyond the walls of the building. Employees rely on their salaries, customers rely on the products, and the community relies on them to keep jobs and profit local, as well as drawing on them as a form of identity. During a recession, it is unlikely that all of these relationships will remain intact. To stay afloat, businesses will have to make difficult decisions that will affect their stakeholders in negative ways. Although the business owner cannot control the loss of employees or decrease in production, she or he can control how the business responds and communicates with the stakeholders about it.
In times of transition, communicating with full transparency is one opportunity for business owners to demonstrate their commitment to the community. Being transparent about the difficult decisions being made will not make the decisions any easier, nor will it alleviate any of the financial strain that may be part of the decision. It will, however, provide an opportunity to build a lasting bond with stakeholders, one centered on trust and honesty. For example, keeping the company informed on all of the measures taken to try to avoid having to lay off employees throughout the process can lessen the emotional and psychological toll of such measures. It might show lay-offs in a different light; perhaps as a mutual temporary sacrifice that can engender feelings of solidarity and commitment. Sharing both the decisions and the difficulty with stakeholder networks can help community members empathize with the small-business owner. It will help both parties see the importance of what, collectively, they have created.
In the midst of all of this uncertainty, it is easy to get lost and feel helpless. It is essential that small-business owners — that everyone — remembers that there will be a time when this is over. The world will get through this, and it will begin functioning once again. In his interview with WJLA News, Darden Professor Greg Fairchild declares just this: “There will be a period when we will begin moving again.” While we may not know when it will be, we do know that this will not last forever, and looking toward that future is imperative to keeping hope alive. While this pandemic is life-changing, both on an individual level and for society as a whole, eventually life will get back to normal — even if it will be a new normal.
Fairchild isn’t just waxing poetic; he’s seen the power of hope because it leads to resiliency. He and several other Darden professors have spoken with more than 100 small businesses around Virginia that proved resilient through difficult times, like when a fire reduces an entire production line to ash. Partnership between small businesses and local community members was important because it offered a path forward and reinforced the prospect of recovery.
Now more than ever, small businesses must call upon their resourcefulness. Through their work on organizational resilience, Darden Professors Morela Hernandez and Jared Harris found that during hardship, resilient organizations “remain flexible and adaptable, [and adjust] to current hardships while building the capacity to respond to new challenges in the future.” One distillery is using its equipment to produce hand sanitizer. A public relations firm has set up a toilet paper exchange, giving away precious rolls rather than letting all of their excess toilet paper sit in supply closets. These are just two examples of what many small businesses are doing around the country. Not only is this a way for business owners to respond with flexibility, it is also a way for them to support the community throughout this crisis.
We are in uncharted territory. As a result, there is no handbook for small businesses to follow. For small businesses as well as individuals, it is important know the world will get through this. As a small-business owner, be transparent, be creative and lean on the community, for they will return the support as soon as possible.
Morela Hernandez, Jared Harris and their co-authors wrote “Organizational Resilience: A Social Exchange Perspective” in B. Caza, N. Powley and A. Caza’s Handbook of Organizational Resilience. Greg Fairchild is the author of the case study Johnson Lumber: Bet on the Upside or Avoid the Downside? (Darden Business Publishing) with Brad Rourke.
This article was developed with the support of Darden’s Institute for Business in Society, at which Rebecca Little is a research assistant.