In the present economic environment, startups might confront critical situations that could lead to their downfall, but it's also a chance for those who are agile and courageous. Based on my observation, the fate of a growing enterprise frequently hinges on the quality of leadership during such times.  In the face of shifting circumstances, leaders have the responsibility to re-evaluate their tactics. We have pinpointed seven key areas where leaders can concentrate their efforts to steer their startups through a crisis and position themselves as winners when prosperity and steadiness are restored.

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1. Scheme of Maneuver

When you're too focused on short-term results, it can create a vicious cycle of fear and uncertainty that can ultimately lead to the failure of your company. That's why it's crucial to plan and prioritize your actions. Start by identifying the biggest risks and taking steps to reduce uncertainty and hedge your bets. Since resources might be scarce during a crisis, you need to be adaptable and work with what you have.

As you make progress on key tasks, make sure to communicate these successes with your team. This will help build confidence and show that the crisis is manageable. The ultimate goal is to reduce uncertainty, which can be incredibly damaging to any organization. By demonstrating that you're taking the right steps in the short-term while staying true to your long-term vision, you can help your team stay focused and motivated.

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2. Stay in Touch

Effective communication, both internally and externally, is critical during a crisis. It's important to prioritize clear and concrete messaging, and to err on the side of over-communicating rather than under-communicating.

While it's important to keep your team informed, be mindful of their energy and state of mind during the crisis. If in doubt, focus on simplifying your message, emphasizing key points, and repeating important information. By following these guidelines, you can help ensure that everyone stays on the same page and has the information they need to navigate the crisis successfully.

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3. Keep it Zen

During a crisis, stress can feel amplified, and it's a challenge for leaders to cope and help their team thrive. However, this is also an opportunity for personal and professional growth, to shift from a victim to a helper mentality, embrace discomfort, and become a leader.  

To elevate your mental state and that of your team, consider tools to track and manage stress. Despite the intensity of the challenge, facing it from a higher state can help.

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4. Get in the Zone

When facing a crisis, it's essential to maintain focus and execute effectively. Under normal circumstances, there are five common obstacles that can hinder people in this regard:

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• Lack of clear priorities.
• Distracted by new or shiny objects.
• Procrastination.
• Multitasking.
• Perfectionism.

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But in a crisis, there is an additional factor that can create even more challenges: fear. This can lead to uncertainty and panic, making it even harder to stay focused.

To avoid these distractions and keep your startup on track, leaders need to help their team maintain laser focus and tunnel vision on the most important goals. This means directing your attention toward cost management, people management, and opportunity development. By staying focused on these critical areas, you can help your team navigate the crisis successfully and emerge stronger on the other side.

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5. Self-Care

During challenging times, it's crucial to prioritize self-care for both yourself and your team. This will help ensure that everyone has the energy and positivity needed to navigate the crisis effectively.

One way to boost morale and create a sense of unity is by using the crisis as an opportunity to energize the team. Focus on building a positive mindset and fostering grit, and encourage creative activities that promote mental, physical, and emotional well-being. For example, you could create a #well-being Slack channel, start a walking challenge, or find other ways to support your team's self-care efforts. By taking care of your team in this way, you can help them stay resilient and focused during tough times.

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6. Your Culture

So, how can you change your startup's strategy without losing sight of your purpose and values? Short-term thinking can often cause a misalignment between behavior and decisions, which can be detrimental to your startup's culture.

That's why it's important to have a strong sense of purpose and values at the heart of your business. They serve as a guide in good times and bad. When building your team, it's crucial to recruit people who share those same values to create a cohesive and resilient team that can weather any storm. Even if you're not currently in a hiring phase, it's essential to reinforce your purpose and culture to keep your team motivated and aligned.

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You might think that focusing on culture during a crisis is unnecessary, but in my experience, neglecting it only allows the crisis to shape your team culture for you. If you haven't already established a unique culture for your startup, now is the perfect time to do so. Don't wait until it's too late!

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7. Delegate

During a crisis, it's important to take a step back and assess the strengths and weaknesses of your team to determine which are essential for success and which are not. But, what you may not realize is that it's also a good time to reevaluate your hiring strategy. To start, you should consider your objectives and key results (OKRs) to determine whether you need full-time roles or external consultants to address short-term issues. In some cases, it might even be necessary to let go of full-time roles that are no longer relevant to the survival of your business.

While this may sound negative, it can actually create valuable opportunities for the development of your team. When people take on more responsibility, they can grow rapidly. So, focus on creating an environment where your team can stretch themselves and learn new skills. This will not only benefit your business in the short-term, but it will also set your team up for long-term success.

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While the negative forces that caused the 2022 recession may be losing momentum, it's important to prepare for the new market trend and be ready to capitalize on opportunities. A down cycle can be a chance for startups to focus and position themselves as winners for the next upturn. Leaders must concentrate on building scalable organizations that can thrive in the long term. These seven points provide a great framework to guide your efforts.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.