3 valuable lessons learned the hard way by the founder of one of the first French unicorns during the 2008 crisis

As exciting and thrilling an entrepreneur’s journey can be, it’s also riddled with challenges, obstacles, and discomforts that hit hard in times of crisis like the one we’re living with the COVID-19 pandemic.

For those who already went through a similar experience, one of the main lessons that were learned is the following: one should never let a crisis go to waste.

Among those entrepreneurs and adepts of this motto, Bertrand Diard, co-founder of Talend, one of the first French unicorns listed in 2016 on the Nasdaq, and venture partner at Serena, experienced a long way of scaling a company including the major financial crisis of 2008. Not only did he emerge stronger from it, but in the midst of the general turmoil, he also learned several valuable lessons that got him equipped to face any type of chaos/pattern.

Since no company is immune from crisis, the best option in such uncertain and unprecedented circumstances is to learn and capitalize on it as Bertrand did, or most importantly, leverage this experience to reinforce your business and your organization.

1 — “Change the way you look at things and the things you look at change”

Accept the “new normal” and brace yourself

In the midst of the 2008 meltdown, Bertrand recalled that he quickly started preparing himself for bad news piling up fast, undermining his optimism. His entire vision had to shift. “I have learned to accept the loss of the mindset that pushed me to become an entrepreneur. I was envisioning hiring people, creating a great work environment, a thriving business with engaged customers… I found myself making tough decisions and choices. I was imagining myself as a coach in a stadium, I became a commanding officer on a battlefield. And the reality of war is that priority must be given to the company.”

And even though the countless support plans that are announced on a daily basis “might make you feel protected”, “in reality, no one is.”

In 2008, Bertrand knew deep down inside that everything around him was changing and that he needed to adjust, not to say, start over. The thing is, if you’re lucid and get ready for the worse, there are chances that the coming news won’t be that bad. As we say, “Be prepared for the worst but hope for the best”

Now, here is what you should ask yourself: can you change the crisis? No. Can you change the context? No. Well, you have to change your perspective then.

Today too, nobody can change the macro environment; “you need to acknowledge this and recognize that your company’s development will be different from what you have planned. Only by learning to accept the upcoming unavoidable issues, will you be taking your first step toward tackling them because then, actions will follow naturally and make your organization stronger.”

Crisis management: communication, agility, preparedness are key

“The crisis requires that you make preparations for it, that you start developing action plans. Even though you can’t fully expose these plans to all of your teams, you need to consider that your employees are in an extremely stressful situation; so you should act in a transparent way, and in a way that reassures them, that comforts them as to their perspective on the future” advises Bertrand.

In an ideal world, it won’t be necessary to restructure the organization or to reduce headcount. However, this perspective has to be considered. It’s particularly true in the current context with the pandemic, as it’s possible that the virus unleashes new cycles of contamination and confinement after the first phase. And when it happens, the more prepared you are, the faster you can act. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change.”

When you’re on the path to raising money and to developing your business, there’s a tendency to announce good news frequently. In the context of a crisis, your role is changing drastically along with your mindset. You have to take responsibility for the hard choices you’re making and explain them rationally to make sure people understand that you’re guided by the best interest of the company, the collective benefit, the common good.

People are relying on you like never before, they need to trust you and they need to be deeply committed to you. “They need to hear from you that the market is morphing and that it’s an opportunity; the current situation is only a cycle and there will be recovery for sure, that’s why you’re counting on their resilience. Transparency and trust are especially important with managers as they’ll be playing a crucial part in the reshaping of the project.”

2- Why the core of your business should be your only goal

How your worst experience can be the best opportunity: focus all your attention on the core of your value proposition

“From my point of view, the crisis was the occasion to find our way back to a sound footing, to start again on a healthy ground and to make the teams focus” recalls Bertrand.

No matter how tough and trying the circumstances are, there’s a big chance that they serve as opportunities; opportunities to learn, to re-focus, to grow, to move forward or adapt. So, you should see the problem in a positive light.

Times of crisis are times for reflection: it’s the moment to step back and rethink every part of your business and of your organization right down to the finest micro detail: the existing plans, the priorities that were set, the goals you had, the teams… Because be honest: when was the last time that your organization acutely analyzed the fundamentals of the business? Not easy to do so when caught up in the grind and racing against deadlines on a daily basis.

Now, by being removed from the action, every aspect of the organization can be put into scrutiny and bring new valuable insight. Now is time for a strategic review.

All eyes on the “Must-have”

When in survival mode, the main priority is to dedicate 200% of the energy to 150% of the core business.

So whatever you were working on during your growth period that is not “must-have” in the current context should be abandoned. A straight vision focused on the core of the value proposition: this is the survival code that becomes your passport to get through the hardships and overcome the challenges.

Indeed, there is no doubt that customers will be less sensitive to what is considered as a “nice -to -have” (which won’t be a differentiating factor anymore), and will dwell on “must-have”. That being said, the value proposition of the core business needs to be quite appealing. In other words, bring the organization back to only focus on its primary purpose and vision. So basically, at this stage, one tip is to address the following question: what’s vital and what’s not?

It goes without saying that this approach sharply differs from the scale-up phase where all of the general efforts are scattered between numerous projects that turn out to be unfruitful when a crisis strikes. When faced with hard times, all of those programs should be put aside in favor of the essence of your service. The growth phase “as fast as you can and at any cost” is dead.

3- Balancing sacrifices and achieving overall company objectives

Tracking down inefficiencies

“At Talend in 2008, we were lucky that our market wasn’t slowing down; we had no cash issue, but by focusing on the core value of our business, we became aware that there was too much inefficiency.“

Once you’ve reflected on your company and all of its aspects, you realize that there’s a major part of inefficiency inherent to its stage, to an accelerated growth: the money spent, the teams involved, the projects carried out…

It’s important to come to the realization that the “growth at any cost” phase always includes potential inefficiency: “Between 10 and 20% of the activity is unproductive. When everything works well, when cash is flowing and there’s money to buy market share, as an example it’s very probable that out of 10 salespersons, one or two of them are only 60–70% involved. And the same applies to other teams, in all domains.”

With the new context, it’s not sustainable anymore. So, tracking down every inefficiency and dealing with it becomes critical.

Budget & headcount cuts, rationalization, activity interruption…

Here comes the hard but necessary part of the entrepreneurial itinerary; a part that is all about sacrifices and that, as surprising as it seems, Bertrand recognizes as empowering and strengthening for a business. “How am I going to get back on my feet? How I am restarting the company? With who? What organization? Those were my questions at the time. I quickly understood that I had to tighten up the budget, the activity. After all, if we stopped existing, we wouldn’t even be able to operate, to be on the field. I stopped accepting calls and meetings that had nothing to do with the core business, I stopped the hiring interviews, I stopped many things… Well maybe it’s extreme but making tough decisions is probably what saved the company.”

Of course, harsh resolutions include letting people go. “Even though we were all down for moving off again on a new and stronger basis despite the tough decisions it requires, paradoxically, we didn’t go with massive layoffs. We chose to let go only those we had doubts on.”

The teams then became an important part of the do-over “we asked the team managers to put together spreadsheets on:

• their day-to-day activities,
• the missions that were absolutely crucial to the minimum functioning of the organization and that must be kept
• the budgets and the people that were essential to the business

They were also required to establish a list from the most necessary to the least necessary and asked what they would remove if a 10%, 20%, and 50% budget cut was to be made on the total payroll. They were thus prepared to activate one of these options.

By taking these actions, the organization was 10 times stronger and efficient; processes started to go 10 times faster. For instance, the focus-driven culture marked the end of never-ending conversations.”

It might only be by enacting an entire series of severe restrictions that the company can thrive. But careful, they must be taken as quickly as possible.

“Looking back today at this experience, I deem myself lucky today to have been through this crisis as it undoubtedly reinforced the company. So if I were to make a recommendation, I’d say: act as a captain and always consider the context as an opportunity.”

Written with Bertrand Diard

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