Surviving, thriving, or misery?

Mid-winter… fog, rain, and cold, but Spring is on the way. Without putting too much of a finer point on it, at the beginning of the year I thought 2022 would be tougher than 2020 and 2021, and the tourism and hospitality misery would spread.

Well, it sure has been. Falling asset values are hurting the wealthy, rising interest rates are harming the middle class, and inflation is affecting the poor. The first macro signs were in the June quarter unemployment rise, albeit slightly.

The big OE is gutting our skilled labour which combined with sickness and absenteeism, rising depression, and apathy is reducing productivity per worker. All the while businesses are suffering from increases in labour costs. Compressed margins and reduced financial reserves are combined with a credit crunch to make the likely survival rate of the weak, low.

The opportunity, of course, is that the survivors will thrive and grow. Some are even growing through this crisis rather than expending reserves to still be standing in two years.

To distill this to its simplest form, companies that remain profitable and turn that profitability into cash, add to their economic resilience. Those that are unprofitable consume reserves daily. Those that have debt will have their reserves evaporate as the credit crunch bites. And those with cash have a runway to fund losses for a period. If their cash reserves are less than two years of projected losses, they too will run their tanks dry, and will only replenish it by begging for equity in a market that will be avoiding new risk.

For those that do not have two years’ runway, it may be better to just bite the bullet and call time now. Some are already doing that.

In the words of TS Elliott, some are seeking to avoid the bang and choose the whimper. Doors closing quietly is the hidden misery of many subscales, over-geared, and unprofitable businesses in 2022. Some, however, are choosing the strategy of “I’ve got nothing left to lose, so if I am going down, I choose to go with a bang, not a whimper.” That mess will emerge in the next 12 to 24 months, and a domino effect will begin as these “bang, not a whimper” operators sap the resilience of others. But it doesn’t need to be so.

I am reminded of a hard-working couple who had too much debt. A business with unfavorable economics that would never surrender no matter what. They soldered on because they felt a deep moral obligation to pay back their debts which were provided by family and friends. The greatest gift that was given to them was their creditors, which included me. It occurred when we said to them, “This is killing you. Just stop. We lent to you because we cared about you pursuing your dream, and because we care about you, we now have to intervene and just say stop.” The loans were forgiven, and they got to keep the salvage value of the inventory, paid their trade creditors which averted a contribution to the domino effect, and were given a release from the emotional pressure. If creditors and lenders alike understand that eventually they will all lose money, and it’s just how long and how much misery they choose to consume on that journey, and instead just move on, it will be less ugly than the alternative.

Never forget that time wasted pursuing the past,
is time you are not spending on the future.

But enough on misery, having watched numerous businesses survive and prosper at this time, both as an owner, director, and adviser, I think I can now see the common actors in survivorship, beyond the resilience and emotional issues that are fundamentally important but not enough on their own as the story I told you above demonstrates.

Common factors in survivorship:


All businesses that are thriving have alignment between the owners and the leadership team on what needs to be done, why it needs to be done, and how and when it needs to be done (Strategy 101).


While 100% engagement is impossible, those that are succeeding have achieved high levels of engagement on direction across their whole teams on what needs to be done. Reasonability for action is accepted and accountability for delivery is accepted, monitored, and supported by leadership.

Purpose and belonging

A clear “why” beyond money is understood, and the culture and behavior of the business have created loyalty among customers, owners, leaders, and talent.

Customer value proposition

Systems and processes support a commitment to quality and meeting expectations, which customers feel and acknowledge.


The enterprises are disciplined around governance and have functioning boards.

Low or no debt

Simply put, a rainy-day fund gives them the confidence to face a rainy day.

Businesses that have all of the above are doing great, they have a great team and customer retention, higher than average margins, and as others drop the ball, they are increasing their market share.

Businesses that have at least half of these nailed are surviving, but not thriving, and are unlikely to fail, those with less than half of these are struggling and limping towards failure.

So how does addressing any of these improve your chances of thriving?

Well apart from the last one which is the act of throwing money into it, all the rest are around human TEAM engagement. Bill Bain is now helping a number of our clients with team alignment, engagement and belonging, and dovetailing that work into the end result which is customer centricity. Read Bill’s recent articles: The common issues affecting business performance, Warning signs of organisational misalignment and Organisational Alignment – a critical ingredient to top performance.

One of my investments is Boardpro. Why? Because I believe that better governance drives better leadership which drives better business execution and better work environments. I now use Board pro in most of my board engagements, and the simple tools and thinking embedded in the tool change board behavior.

If you want to discuss mapping a journey to develop any of these core pillars of success, contact Bill Bain, Joshna Mistry, Humphrey Hart or Bruce Sheppard.

If you don’t know where to begin, want to talk through something, or have a specific question but are not sure who to address it to, fill in the form, and we’ll get back to you within two working days.

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