Michael Hyatt:
And here’s the thing that I think is a big takeaway, and that is the point of absolute certainty will never come.

Michael Hyatt:
Hi, I’m Michael Hyatt.

Megan Hyatt Miller:
And I’m Megan Hyatt Miller.

Michael Hyatt:
And this is Lead to Win, our weekly podcast to help you win at work and succeed at life. Today, we want to talk about three fears facing business owners in today’s market. And I don’t know about you, Megan, but it feels like there’s more uncertainty than, honestly, I can remember in probably 10 years, at least. The last time I felt this much uncertainty, I was in New York City in the Credit Suisse building right after the day that Lehman Brothers declared bankruptcy. And people were walking around New York like they were in shell shock. It obviously wasn’t Ukraine or anything as bad as that, but people had this look of fear and uncertainty, and what does it all mean on their faces, meetings were being canceled left and right. In fact, I was there to meet with a group of investment bankers and an executive assistant ran into the room where we were at and they said, “Hey, sorry, we’re going to have to cancel the meeting. Everything’s changed. We’ll talk to you guys later.” And she ran out and that was it. We made a trip to New York for nothing.

Megan Hyatt Miller:
Wow. I don’t think I knew that story.

Michael Hyatt:
Yeah.

Megan Hyatt Miller:
That’s crazy. Well, you and I went on a walk, I guess a couple weeks ago now, we were talking about this. And something is going on, something in a lot of different places, whether it’s the price of oil, or interest rates, or inflation, or what’s happening in Ukraine, the list goes on and on and on, the debt in the US and around the world. There’s just so many factors that seem to be coming together in a way that’s not going to be good. Whatever that is, what the extent of that is, if we’re talking about a full-blown recession, or a temporary disruption, we don’t really know yet, but it certainly is unsettling, which is saying something on the backside of a pandemic. Who would’ve thought this would be the most uncertain moment that you’ve had in 10 years when two years ago the whole country was shutting down because of COVID, it’s makes you your head explode a little bit.

Michael Hyatt:
Well, and there’s probably some logical fallacy involved here that whatever crisis you’re the closest to feels the most intense.

Megan Hyatt Miller:
Sure.

Michael Hyatt:
So I don’t know if we can compare them exactly with each other, but I was hoping for a couple year hiatus on the backside of the pandemic, where it would be smooth sailing, we’d see the economy rebuild, our business would continue to scale and all the rest, but I don’t know what’s going to happen. I know that even after the Great Recession, and even coming out of the pandemic, there were winners and losers. I would say that for the most part, not everybody, but for the most part, of our 600 plus business accelerator coaching clients, most of them emerged from the pandemic in much stronger shape than they went into it.

Megan Hyatt Miller:
Yeah.

Michael Hyatt:
Some of them saw record profits, particularly in 2020, some, many in 2021. And we’ve certainly seen a lot of growth ourselves, but it’s not because we just coasted and we’re passive. And that’s why in this episode we want to talk really about these three fears that are facing business owners, but more importantly, what we can do about it. Now, disclaimer, we have no inside information. We don’t know if there’s a recession coming or not. What we do know is that there are a lot of signs on the horizon that have got us concerned. And the good news is, is what we’re going to suggest in this podcast episode is going to serve you well, regardless.

Michael Hyatt:
So let’s just dive into these and see if we can offer some practical suggestions, because my goal really is that when people get done with this podcast, they’re going to feel less anxiety and more confidence about the future. And the key is to realize our own agency that we don’t have to simply stand by, react and wait to be acted upon. We can take the initiative, we can exercise our power, and we can actually control what we can control. And usually that’s enough. That’ll get us through.

Megan Hyatt Miller:
One of the really important things to say, you probably won’t say this yourself, but I think our audience would want to know for those who don’t, is that you led a very large organization successfully through the 2008-2009 recession. You were made profitable during that time, and you steered the ship successfully to the other side. And not a lot of people can say that. So I think you understand the fears the business owners and executives feel right now as they’re looking out scanning their horizon. But you also know from your past experience what it takes to successfully get from one side to the other, whether that’s, again, a small disruption or something very significant, like it was in 2008. And I think that’s an important piece of context as we get into these fears, because you get it from both sides.

Michael Hyatt:
Well, thank you. And, fortunately, I had a really great team like I have now, and having a great team makes it all possible. When everybody’s rowing in the same direction, pulling together to get through something. And when it feels like a clear and present danger, it galvanizes your focus. I don’t know who it was that said, there’s nothing like the side of a guillotine to focus your attention.

Megan Hyatt Miller:
The other thing you had was a great coach. You weren’t in it alone on the one hand, because you had your team, but you also weren’t in it alone, because you had a coach who knew the right questions to ask, who had the right processes in place to guide you through an otherwise very chaotic time. And I think that’s a big takeaway just for those listening.

Michael Hyatt:
Yeah. I think it was a big takeaway too, because there’s something about talking things through and talking them out loud, that gets them out of your head where they’re ominous and scary. Once you get it out and start talking about it, you go, Oh, okay. So basically this is a series of problems to solve, and we’re going to take these one at a time and we’re going to get through this. And it becomes manageable. And I think if there’s anything I’ve gotten out of my executive coaching experience, and I’ve been doing it now for over 20 years, is that it gives you a sense of perspective. So you’re not just left with your own thinking, your own resources, and it gives you access to resources that you otherwise wouldn’t have.

Michael Hyatt:
So let’s get into these three fears. So the first one is, as we talk to business owners, our clients, people that are leading businesses, first of all, they’re worried they won’t know what’s happening in time. There’s all this uncertainty and they’re afraid that they won’t act in time. And I will say this, coming out of the Great Recession, we acted very early. We were proactive as an executive team. We restructured the company. We took cost out of the company. We got rid of underperforming business units, but we did that before the recession was apparent to all of our competitors. And I don’t know why I’m grateful that we did that, but the board didn’t ask us to do it. In fact, we went to the board, and we said, “Look, we want to take about 20% of the cost out of our expense structure.” And they were like, “Whoa, really?”

Michael Hyatt:
And so we made the case for it. We laid it out for him. And I’m so glad we did, because we got the upper hand in the whole thing and we came out on top, not unscathed, but we came out on top. We survived; we made it through. And we were healthier after the fact than before we went into the recession. Many of our competitors didn’t do that. They were like the proverbial deer caught in the headlights. They didn’t know exactly what to do. They thought they could just weather it out and hope that it wouldn’t impact them. And, unfortunately, they got acted upon. Some of those companies went out of business. Some of them had to merge with other companies. Some of them just really had really difficult financial struggles through the Great Recession, because, as you know, it went on for several years. So this is the kind of thing where if there’s some action that you’ve been thinking you need to take, now would be the opportunity.

Megan Hyatt Miller:
Well, I think what happens when the fear sets in, and we’re in a period of uncertainty, so there’s all these early indicators that there are problems, but we’re not quite sure yet what this is going to mean. The temptation as a business owner is to just say, “You know what? I just can’t even think about that right now. I’m just not going to worry about it until I know for sure, because I don’t want to look foolish,” or “I don’t want to make decisions that I’ll regret,” and you make it very, you catastrophize in a way, or you get in real black-and-white thinking about it, like it’s all or nothing. And you do nothing. And then you wait until the storm is upon you. And it’s much harder to make decisions in that environment than when you still got some runway. You have the benefit of time and perspective on your side.

Megan Hyatt Miller:
And I think part of the antidote to this is to really recognize what’s happening and to be willing to face the facts and to take action in a reasonable, thoughtful, wise way, rather than sticking your head in the sand.

Michael Hyatt:
Exactly. I heard this story, and I may get some of the parts of this wrong. So forgive me for the details of this, but it’s a great poignant story. It’s the difference between buffalo and cattle. So in Eastern Colorado, east of the Rockies, there’s these ginormous thunderstorms that build during the summer, thunder, lightning, high winds, lots of rain. So when those storms come up, the cattle try to outrun the storm. So they run with the storm. The buffalo do the exact opposite. They run headlong into the storm, which means they’re actually exposed to the storm for a lot less time. They take it on head on; they get through it and then they’re done. Meanwhile, the cattle are subjected to those adverse weather situations, or weather circuit stances forever, until the storm finally dissipates. So we want to be like the buffalo, not the cattle. Face the storm, embrace it, go through it.

Megan Hyatt Miller:
Wow. Be the buffalo. I feel like I need a mug that says, “Be the buffalo.” When we were traveling through Montana a few years ago, we were at Grand Teton National Park. We had a giant buffalo walk across right in front of our car. And those suckers are huge. They’re like the size of a suburban.

Michael Hyatt:
So, that’s the first common fear that we’re seeing develop at a lot of business owners out there. This fear that they won’t know what’s happening in time. And here’s the thing that I think is a big takeaway. And that is the point of absolute certainty will never come. You’ll never have enough data. If you’re waiting on the news media to come to a consensus and tell you what you should do, that won’t happen. If you’re waiting for a group of experts to advise you, that won’t happen. Certainly be informed; read as much as you can. But at the end of the day, part of what it means to be a business owner is that you have to pull the trigger. You have to make the decision without having perfect knowledge.

Megan Hyatt Miller:
All right. So the next most common fear is the business owners are worried that they’re open to more vulnerabilities than they realize. So every business has several key points of vulnerability, vendors, payments, distribution, supply chain, whatever. And there’re just so many points of potential weakness. In fact, some business owners prefer to not think about it, back to that idea of stick your head in the sands. And I think we often fail to take stock of our vulnerabilities and just hope for the best. And it’s like the exact opposite is true. If we are willing to take stock of our vulnerabilities, we actually end up with the best chance of addressing them in a precise and powerful way. If we’re just in the dark willfully, that’s when we’re the most vulnerable.

Megan Hyatt Miller:
So the, we’re back to “be the buffalo.” If you just run into the storm and face it, your ability to come up with solutions is so much greater. Whether that’s because you have a vulnerability in your cash reserves, or your team, maybe you don’t have the right people on your team, or you have a problem with one of your products and how it might fare in an economic downturn, or you’re really vulnerable to supply chain disruptions. If you are willing to look at these things, then you have a much greater chance of narrowing in on the places you’re the most vulnerable and coming up with solutions in time.

Michael Hyatt:
Yeah. And it’s worth just doing a systematic reassessment of your business and looking for vulnerabilities. Where are we the most vulnerable? It could be in positioning. Maybe your product is positioned as something that’s a luxury item, or something that’s nonessential, and in a recession, it gets cut. So you know that vulnerability, you could do something about it. You can be the buffalo, and you can reposition your product or service so that it’s more essential than it was. It could be, like you said, Megan, in a supply chain, it could be any number of things. But this reminds me, and it just begs me to quote Warren Buffet, who said that, when the tide goes out, you find out who’s swimming naked. And when the economy recedes, you find out what your vulnerabilities are. And there’s probably things that you suspect where you’re vulnerable, but here’s the thing. The sooner you can find out the more runway you have to address it and fix it.

Megan Hyatt Miller:
Absolutely.

Michael Hyatt:
I know people that are roughly my age in their sixties, that will not go get a physical, they suspect something is wrong, but they won’t go get a physical. And I don’t know what they’re thinking. And I’ve pled with some of them. I said, “Go get a physical. This isn’t going to get better on its own. You’ve got to face the facts, and the sooner you address it, the better chance you’re going to have of getting it fixed.” But for whatever reason, people want to stick their head in the sand and avoid it. And that will not serve you going forward. You got to be ruthless in assessing where your vulnerabilities are. Because again, once you get it out of your head and onto paper, it becomes so much less scary.

Michael Hyatt:
You go, oh, for example, cash. “Oh, I’ve got a cash problem. Okay. So how could I fix that?” And then you start thinking of all the possible solutions, but until you face the music and say to yourself, “I’ve got to a cash problem,” it’s easy to not deal with it. Once you recognize it, once you assess it, then you can begin to transform it and begin to solve the problem.

Megan Hyatt Miller:
Absolutely. Power here is really defined as time on your side, and you’re willing to look at the facts, your willingness to look at the facts. This reminds me of a tool that we teach our coaching clients, which is our 16-week cashflow forecaster. And we walk them through this process of creating basically a scenario of “Here’s the income that I have coming in. Here are the expenses that I am expecting. And here’s what’s going to be left” instead of just waiting to check the bank, or waiting to get your P&L statement from your accountant or your CFO at the end of the month. Really saying, “You know what? Cash is a lifeblood of every organization, and I’ve got to make sure that we’re in good shape at least 16 weeks out.” We actually now run this all the way through year-end, and we have a cashflow model that we run alongside our budgeting process.

Megan Hyatt Miller:
But if you can at least see 16 weeks in advance, then you can know in advance, far enough in advance, where you still have the ability to act with agency and make decisions that could perhaps circumvent a problem down the road. And that’s true. That’s a great example of something very concrete, but this is going to be true for your supply chain issues, for personnel issues, for positioning issues. When you think about it in enough time that you’re not already in a crisis, when you start considering your vulnerabilities, it really enables you to find the best solutions.

Michael Hyatt:
It does. And you need to also identify those leading indicators, that would show you that there’s perhaps a slowdown in the marketplace. I could tell you back in 2007, in December of 2007, we started to see our sales at retail slow down. Retailers were reporting that they just weren’t selling books like they had previous to that. And then in 2008, it got worse. And I think that if you look on Wikipedia or whatever, most people will say that the Great Recession began either December, of 2007, or in that first quarter of 2008. But the leading indicator there was consumer confidence and consumer spending. It started to slow down. Now we’re in a situation today where we have, at least at the time we’re recording this, rising inflation, 40 year high. We’re seeing energy prices continue to go up, although they’ve receded a little bit this last week, again, as we’re recording this, but what are the leading indicators that would prove to you as a business owner that something systemic is happening in the marketplace that you need to respond to?

Michael Hyatt:
Now, again, you could sit there and debate it until the cows come home, or the buffaloes, but you could debate it forever. But the point of absolute certainty is never going to happen. You’ve got to read the tea leaves and say, “Okay, we’ve got the war in Ukraine. We’ve got rising inflation, rising fuel prices, massive national debt that’s going to have to be serviced, at least the interest on that has to be serviced. So this is a witch’s brew of things that could be really negative for business.” And I’m confident we’re going to get through it. I don’t think it’s going to be catastrophic, but I do think it could be disruptive. If it’s not, awesome, nothing we’re suggesting is going to hurt your business. It’s only going to make you stronger, but you got to take action. And again, early rather than later.

Michael Hyatt:
The third common fear that we’re seeing among business owners in today’s market is that they’re worried they won’t be able to respond in time. In other words, they’ve simply run out of runway.

Megan Hyatt Miller:
Yeah. If you think about it, if you don’t know what’s happening in time, and you fail to reassess your business and its vulnerabilities, then it’s pretty likely that you’re not going to respond in time. So that’s why these other two fears are so important to recognize in yourself, especially if you find that sticking your head in the sand, or avoiding dealing with them, is a natural inclination that you have. It’s really, really important to wrap your head around this and recognize these emotions when they pop up, because you do want to be able to respond in time. You’ve got to take action and communicate with your stakeholders in your business and outside your business, and then implement whatever plan you’re going to come up with to address the vulnerabilities that you’ve identified, but this is really, really critical to face this fear of, “Oh, what happens if I don’t respond in time?” by responding in time. That’s the secret.

Michael Hyatt:
Exactly. Well, and I think that the first place we need to respond, this really comes back to our leadership, we’ve got to get a hold of our mindset. How you think about the problem will determine whether or not you can address it. And I remember back when the Great Recession happened, it was the first time I’d gone through something that big with that much responsibility. And man, I felt like for days, maybe weeks or months, I was near panic all the time. And I know that probably affected the people I was trying to lead. It probably affected the business, I was trying to remain calm on the outside, but I didn’t have the tools at that time that I have now. So one of the first things that happened when the pandemic happened is, I don’t know if you remember this, Megan, but we created a course and we created a webinar called Confident in Crisis.

Michael Hyatt:
And I said to our clients, because I was meeting with them three times a week. We would have these BusinessAccelerator coaching calls for the first several months of the pandemic. We were meeting three times a week, Monday, Wednesday, and Friday. And I kept telling my clients, I said, “The most important thing you can do as a leader right now is manifest calm, confident leadership.” And I said, “If you don’t believe this for yourself, just trust me on this. You will get through it. It feels dark. It feels scary, but I’ve been through this before, even a worse situation. You’re going to get through it.” And it comes back to something I’ve used again and again, I used it with our clients then. I’ve used it with our clients now, but it comes back to the Stockdale Paradox.

Michael Hyatt:
So this was James Stockdale, who was an Admiral in the Navy, got caught behind, actually shot down behind enemy lines in Vietnam, was in a prisoner of war camp for I think seven years, beaten innumerable times, spent two years in leg irons, and just had a horrific experience. When he finally got out, they ask him, “What did it take to get through that?” And he said, “Well, basically two things.” And this is often referred to, was referred to by Jim Collins in his book, Good to Great, as the Stockdale Paradox. And basically, what it says is that you, as a leader, have to do two things simultaneously. Number one, you have got to admit the current reality, the most brutal aspects of the current reality. You can’t sugarcoat it. You can’t wish it away. You can’t ignore it. You got to acknowledge just the challenges of the current environment. You don’t have to dial it up and make it more than it is, but don’t make it less than it is, but acknowledge it for what it is. So, that’s one half of the Stockdale Paradox.

Michael Hyatt:
The other thing that he said that was necessary to survive that situation for seven years was to never lose faith that you would ultimately triumph, that you would ultimately win, and this would become one of the defining experiences of your life. So you’ve got to have that sense of realism on the one hand, but faith that you’ll prevail in the end. And those things are important now as well. Your team needs to sense that. If you don’t have that sense of reality right now, people will think you’re Pollyanna. You’re just glossing over the facts. You got your head in the sand, and that’s going to scare the heck out of them. On the other hand, if you don’t maintain confidence that you’re ultimately going to prevail, they’re going to wonder why it makes sense to keep fighting. And I think it’s been fun to watch President Zelensky in Ukraine.

Michael Hyatt:
And I think he’s done both of these unbelievably well. He acknowledges how hard it is, it’s brutal, but at the same time he has this resolve and this confidence. And the very fact that he’s remained in country when other leaders would’ve fled is enormously inspiring, but I don’t know what’s going to happen at the time we’re recording this, at some point this will be obvious, but at the time we’re recording this, I don’t know who’s going to win this war. If you look at it, the Russians certainly have all the artillery and all the raw resources. And he doesn’t seem to have much, except that he has maybe the most important written thing, which is a persistent will to win. And I think that, in a crisis, no matter how big, and our situation is definitely not comparable to that, but any kind of crisis, people draw off your confidence in the future. That’s why leadership is so important.

Michael Hyatt:
I promise you, there’s a lot of people that, if it weren’t for him standing and being courageous, they would’ve fled the country. They would’ve put down their arms and stopped fighting and just accepted the fate that awaited them. But because he’s believing in the future, he’s become contagious. And people have caught that courage. An entire country is David against this huge Goliath.

Megan Hyatt Miller:
It’s really an amazing story. It’s a privilege to get to watch it unfold in some ways, because it’s not that often I can think of in my own lifetime where you get to see real heroes, and he is a hero. And it’s the kind of thing that our kids are going to look back on as really instructive as they grow up and become adults, and certainly as leaders we can look at. One of the things that, as you were talking, I was thinking of, is how hard this is, because as a leader, you’ve got your own fears. That’s what we’re talking about today. You’ve got your own fears. You’ve got your own vulnerabilities. You’ve got inadequacies in certain ways, or at least your perceived inadequacies as you go to face some really significant crisis or disruption or maybe something you haven’t had to do before in your business. And that’s why I think coaching is so important.

Megan Hyatt Miller:
I think about going through those early days of COVID and having the benefit of an executive coach myself and how valuable it was to be able to talk with her and bounce ideas off of her. And what do you think about this and what do you think about that? And she would say, “Well, be careful about this. This is one of the things I see commonly that leaders do, that, where they make an unintentional mistake.” And I think that as a business owner, or an executive, you can’t necessarily talk to your people about the things that you’re struggling with. That would be inappropriate, and it can be very lonely and a real burden to try to manage your own confidence. And that’s why I think, and you’ve said this before, as you reflect back on your 2008 leadership experience through the Great Recession, when you have a great coach in your corner, it is essential to pull out of you the confidence you need to lead, but also the leadership itself, the direction around leading that’s necessary to navigate a situation like that.

Michael Hyatt:
Just to show you how important this attitude is. And I love your idea about coaching, or the point that you can draft off their confidence, off their perspective, but Zelenskyy, was he a great military leader before all this happened? No, he was a comedian.

Megan Hyatt Miller:
I know. It’s so crazy.

Michael Hyatt:
If there was anybody that ought to have self-doubt and wonder if they could pull this off, it would be him.

Megan Hyatt Miller:
Well, and he does. He’s just a guy.

Michael Hyatt:
Yeah. He’s just a guy, just like everybody listening to this. And sometimes we don’t really know what we’re made of, or what we’re capable of until circumstances are forced upon us and we have the opportunity to shine. So I personally believe nothing happens by accident. I think we encounter the things that we need to encounter to take us to the next level. And so, at the very least, this could become a giant training exercise for you in leadership. And I’m talking about you listening to this podcast. So don’t resent it. Don’t just wish for easier times, see this as an opportunity to grow your capacity, to grow your capability, to become a better leader than you’ve ever been before. And that’s where, again, you need to be the buffalo. Run into it. Don’t run away from it.

Megan Hyatt Miller:
Well, Dad, this has been awesome to just talk candidly about the fears that business owners and executives are facing right now. I think this is not a topic that leaders are talking about very often, their fears. They’re trying so hard to be confident, but we do have fears and we can find our power when we’re willing to face those fears. So you have any final thoughts for us?

Michael Hyatt:
I do. And it goes back to what we were talking about before with coaching. And we have got an exclusive resource that we want to make available to our listeners. Our team has just developed this. It’s called the Business Vulnerability Responder, and it’s a tool that’ll enable you to work through the areas of concern in your business today, so that you’ll be ready for whatever comes tomorrow.

Michael Hyatt:
And all you have to do is book a call with one of our business consultants who will walk you through the tool and help you identify—so you don’t have to do it on your own, but help you identify—where you’re vulnerable and where you can take action to reduce or eliminate those vulnerabilities. And all you have to do is go to businessaccelerator.com/podcast. You’ll get access to that tool. And that’s where you can book your call. And you’ve got to book your call to get access to this tool, but this tool is free and it will change everything. This will enable you to get to the heart of what you need to address, to protect yourself and your team and your company going forward.

Megan Hyatt Miller:
Well, guys, thanks so much for joining us today. I hope this has been helpful for you that you’re leaving this conversation feeling more empowered than when you turned the episode on. So thanks again for joining us. And until next week, Lead to Win.