The shenanigans around Mr Trump’s tariffs have led everybody to complain that the world is more chaotic than usual. They have short memories.

I came across an article from HBR written in 2012 complaining about this very phenomenon and proposing 5 ways of handling it when the going gets tough.

1. Get the ugly truth out on the table

Or “face the brutal truth” as Jim “Oracle of Delphi” Collins would have
it. Anybody who thinks they can predict the next 12 months with certainty is deluding themselves. Which takes you to the 2 simple (but not easy) questions:

• What is likely to go right?
• What is likely to go wrong?

And then “What do we do about it?”

Jim Collins talks about the “Stockdale Paradox”. Stockdale was the most senior US military man captured by the Viet Cong who was kept in the Hanoi Hilton (POW Camp). Unfortunately, this story has blended in my mind with one of the characters in Tarantino’s Pulp Fiction (who was also a POW) who kept a watch up his backside for 3 years.

Therefore, Face the Brutal Truth = Watch up backside

Not sure how that counts as business advice?

2. Establish standards for the new reality

That means doing forecasts and being clear what a good client/sale looks like and how we deal with that client. “Better before cheaper” is a really useful mantra. It’s also the thrust of another article I’ve got on making a company really great.

3. Think long term while acting short term

The classic response when things get hard is to sacrifice everything for short term cash flow, primarily because you don’t want the bank in charge. However, that doesn’t mean you should stop doing things that are essential for the long term health of the business. You have to assume the business will still be there when the crisis is over, otherwise quit now.

4. Every time you add, also think reduce

This is not about headcount per se, it’s more about things spiralling out of control. Everybody/business has a maximum effective bandwidth. Once you are outside that bandwidth, it all falls apart very quickly.

5. Set tight priorities (focus)

The Jim Collins Hedgehog: please can we concentrate on the things we’re really good at that make money and we can all be enthusiastic (enough) about.

So, what goes wrong?

Failure to expose the ugly truth
It’s really easy to blame external events for a failure to run a business properly. If it really is outside your control, move business while you still have some capital left. Tricky in farming, for instance.

Obsession with an unduly short time frame
Again, Collins has fun with his doom loop v flywheel analogy. You’ve got to carry on doing the right thing (and doing the thing right) for long enough to make a difference. Flip flopping between bright ideas usually leads to disaster – the doom loop.

Too much management and not enough leadership
Be clear on your values and then promote them rigorously. Or, less pretentiously, “This is how we do it here”. Beware the Groucho Marks quip: “We have values, but if you don’t like them, we have others”.

The original article appeared in the May 2012 issue of HBR written by Bob Seelert relating to his time at Saatchi & Saatchi. Well worth reading the original which is itself an update of his response to the 2008 financial crash.

Those with more time might prefer to go direct to the Oracle (of Delph?) and read Jim Collins’s “Good to Great”.