I will be eternally grateful that our company was close to bankruptcy at one point.
I will forever appreciate the nine long months we worried about making our payroll every Friday.
I will always value the memory of the day I went to get a cup of coffee from the office coffee maker, only to find the machine had been repossessed because we hadn’t paid the bill.
My greatest learning has come from times of great adversity. If not for the lessons learned during those nine bleak keep-you-awake-at-night months of crisis in our company’s history, we could not have transformed it into the thriving, financially-strong, culturally-rich global enterprise it is today.
One of our former VPs of operations often explained it like this: “You only grow one way from eating ice cream.” You don’t learn a lot from the good times, or the ice cream days. Good leaders will uncover the opportunities for learning hidden within every crisis.
Good leaders will uncover the opportunities for learning hidden within every crisis. Click To TweetBack in the mid-1970s, shortly after I took over as CEO upon the death of my father, our bankers called our loan because they were uneasy with the company’s performance and the change in leadership. Propelled by sheer determination and fear of failure, I grabbed hold of the struggling bottle-washer and pasteurizer business, attacked the issues and, within a year, repaid the loan and positioned the company on firmer footing. We then decided to diversify our product line; we branched out into solar energy panels, electronic inspection systems, and bottle fillers.
The bankers, confident now in my leadership ability and our success in paying back the loan, returned to offer us more money. Whatever financing you need, they said, you just ask for it, our bank will provide it. So we did, financing our new initiatives with bank debt. Those initiatives took off and our business exploded. Profits soared as everything we touched turned to gold. We experienced great notoriety in the industry and became the talk of St. Louis. Unfortunately, I was preoccupied with the newfound growth—the first we had experienced in 40 years–and ignored the commensurate financial disciplines. Additionally our new initiatives were tied to one market and one customer—and they stopped buying from us. The new product lines developed challenges: the solar panels began warping, the inspection systems stopped picking up defects, the fillers failed to achieve the proper speed. Everything went south and the financial loss was devastating.
The bankers returned and—for the second time—called our loan. I felt as if my blood supply had been cut off.
Thus began the longest nine months of my life, as we worried each Friday how we would pay our team members. Forced to operate without a line of credit, I learned more during those nine months than I could have from any banker who made credit easy. Allocating cash week to week to cover payroll and critical payables created an awareness of the value of cash and financial disciplines that I have never forgotten. Furthermore, we realized that no single customer, market or industry would ever again comprise so much of our business. All growth is not healthy.
That period of crisis forced me to look at our situation with new eyes and find a way forward. It was the catalyst to reinventing our business to be more balanced. Using assets as collateral, we embarked upon a new growth model–through acquisition—which turned the business around and created the foundation for the healthy, strong and sustainable company we are today. Although we know tough times are inevitable, for the foreseeable future, we anticipate many ice cream days.
Embrace the lessons that arise during times of adversity. Uncover the opportunities hidden within periods of crisis. Be the person who leads the way forward.