3 Mistakes Businesses make in a Crisis

Throughout the course of any technology business, from start-ups to mature, established businesses, periodically crisis hits. These crises could be related to finances, a key employee leaving, industry changes and so on. As I worked with companies in both good times and bad, I have found that there are three mistakes that are often made that affect the companies to cope with and recover from the crisis.


Mistake #1 – Dissemination of Information

When things go south, there are often two information related mistakes that management makes. The first, is that they ignore sharing any information with their employees which then churns the rumor mill. In many cases, the rumors that come about are often far worse than reality and can lead to poor decision making further down in the business structure. It has incredibly important to share information as quickly as possible, even if that information is simply to state that you have no further information.

The second, is when management decides they need to tell their subordinates what is going on, even when they do not have a plan or strategy in place. These meetings might inform subordinates that the business is trouble, people will be laid off, but they do not know who, timing is uncertain, etc. While sharing information is important and critical even, providing half baked information can make the matter worse. At this point, it can decrease productivity, increase stress, cause emotional distress and it may all be for nothing.


Mistake #2 – Unilateral cuts without ROI consideration

When things get tight financially, I often see businesses make across the board cuts to the budget. This often includes budgets for marketing and promoting the business that are designed to generate sales! Businesses become so budget focused that they are unable to look at the opportunities in front of them and evaluate a return on investment. Instead, they look at a price tag and say, “We can’t spend $5,000 to make $50,000 because it’s not in our budget”.

This same issue often also applies to engineers who are looking to purchase tools such as compilers, analyzers and software libraries. The focus is on the upfront cost, not the savings that will be encountered through greater productivity, more robust products or a better customer experience. The return on investment should always be considered and generic across the board cuts will likely just be the first nail in the company’s coffin.


Mistake #3 – Try to maintain and return to business as usual

When markets and industries shift, or a major world event occurs, I also see companies try to hunker down for the storm. They often seem to think that if they can just get through the next quarter, or the following one that everything will be okay. We just need to get back to business as usual. The problem with this line of thinking is that there is no such thing as business as usual. The environments in which us technology folks operate in are constantly changing and shifting. The attempt to get back to normal is most likely folly. There is no such thing. Normal is constantly changing.

Instead of trying to get back to somewhere, companies and teams need to be looking forward at where they need to get. How can the current circumstances be used to shake the foundation of existing models and usher in new, leaner more innovative ones? Standing still or trying to run backwards never got anyone where they wanted to go and if it did, they did not get there very quickly.



As I write this article, we find ourselves in very unique times, a pandemic is sweeping the globe and many of us forced into a position where we are working remotely or not at all. The fact is though we are always living in unique times with different challenges that we are facing. During times of crisis, businesses have the opportunity to not just survive but to really thrive! In order for this to happen, the businesses and their teams need to look beyond simple survival and getting back to normal and start examining what they can do to succeed under the circumstances.

In today’s post we have examined three common mistakes that I have seen businesses make. Some can’t be taken, but the core underlying theme is that while budgets may be tight, now is the time to innovate, to do things differently, to seize the opportunities in front of us (and yes there are many!) in order to not just have our businesses survive a crisis, but come out the other side better than when we went it.

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