How to Lead Your Small Business Through Disruption Effectively

Eric Mochnacz
January 26, 2024

Small businesses can encounter a number of disruptions that impact day to day operations and their ability to scale.  We learned quickly in 2020, and over the following 4 years, that businesses are required to be nimble and pivot due to disruption disease, financial uncertainty, and other factors.  Disruption is going to happen to your business, it is inevitable.  Your ability to lead effectively through disruption makes all the difference.  

Types of Disruptions Your Small Business May Encounter 

One of the most obvious disruptors of a small business is the economy.  Fears of an economic downturn or recession and changing customer habits have an economic impact on your business.  The state of the job market also has the potential to disrupt your business, as you may have a hard time hiring and retaining talent for business continuity and service delivery.  Additionally, in certain industries, like the trades, you may have a hard time finding candidates with the requisite skills essential for your jobs.  Your company may experience cash flow challenges that impact business operations.  We also learned how health crises and natural disasters disrupt businesses, which in turn leads to supply chain issues, worker shortages, and other issues that could disrupt your business.  Human Resources plays a critical role in guiding your business through disruption and coming out the other end unscathed.  

Five Tips For Leading Your Small Business Through Disruption

HR has the opportunity to support a business through disruption, as most business disruption will have an impact on a company’s employees and its day to day operations.  Working with a strategic HR partner, your small business can address the issues that arise as a result of the disruption and develop a plan to address them in a way that supports your business and its people.  Below is guidance on how HR in small businesses is instrumental in navigating disruption.

Be Open and Transparent

Regardless of the type of disruption, prioritizing clear and consistent communication with your customers and employees is key to successfully navigating it.  Once you’ve clearly identified the problem, develop the communication plan and establish what you will communicate and when to the impacted stakeholders.  Depending on the audience, your messaging and means of communication may need to be different, so outline these variables in your communication strategy.  

Although we don’t expect businesses to open up their books completely, employees and customers value transparency in communication.  As you evaluate your communication plan, consider having honesty and transparency (within reason) as two of your guiding tenets.  Stakeholders appreciate open, clear, and consistent communication.  As the situation evolves, always keep impacted individuals involved and communicate when they can expect regular updates about the disruption.  Finally, when you’re out of the woods, inform everyone you’ve come out the other side, any conclusions and lessons learned, and where the business plans to go from there.  

Elicit feedback from customers and employees to understand how they are impacted by the disruption, and integrate how you will address their needs and concerns as you develop your communication plan.  They may be unsettled by what is going on, but integrating their feedback into the business continuity plan shows you are still invested in them and are navigating the challenge with stakeholders in mind. 

Be Empathetic

Disruption not only impacts the business, but it impacts your people.  And more often than not, the disruption is caused by conditions outside your workforce’s control.  Human Resources has a responsibility to negotiate business impact while also managing employee expectations.  Disruption always breeds uncertainty, so HR and the business have the responsibility to understand employee reactions, which may be emotional, and demonstrate empathy towards the impacted workforce.  Communicating transparently and openly with your employees through disruption is a demonstration of empathy and shows you are considering their feelings and unique position as the company navigates change.  

Remain Flexible

Companies successfully navigate change when they are nimble.  If you’ve fostered a culture of innovation, the entire workforce is prepared to approach the disruption with a spirit of flexibility and resiliency.  HR is often the people who can provide creative solutions to insurmountable problems.  Although you want to plan your approach to business disruption and attempt to stick to the plan, HR needs to quickly adapt strategies, processes, and business models to meet changing business conditions as the disruption evolves.  

Practice Visible Leadership

Whenever a company is facing disruption, its people will look to leadership to navigate them through it.  True leaders always step up in these situations and serve as a port in the storm.  They demonstrate the behavior and capabilities they want to see demonstrated in their employees as the company works to address uncertainty and come out the other end on top.  In reviewing our previous tips about navigating change, leadership is responsible for establishing and implementing a clear communication plan.  They are the ones who demonstrate examples of empathy to company stakeholders.  They are the people who demonstrate nimble thinking and flexibility as they address the evolving challenges and needs as the company moves through disruption.  If you’re a leader navigating business disruption, you are the one who needs to step up, inspire confidence, articulate and execute on your clear vision, and actively engage your employees in the process.  

Identify Opportunities For the Future 

Change is inevitable.  No small business can say every phase of business growth and transformation was smooth sailing.  As much as change is challenging and disruptive, it also presents opportunities to innovate and grow your business in new ways.  Your ability to pivot is one way you successfully weather the storm and come out on top.  Evaluating your progress through the disruption and assessing lessons learned is an opportunity to take your business in new directions and reform your business practices.  So, as much as disruption comes with its fair share of challenges, it can present a number of opportunities!  In fact, you can emerge stronger and more competitive!

Don’t Navigate Disruption Alone 

The good thing is you don’t need to navigate business disruption alone!  Working with a strategic HR consulting firm is one way to successfully lead through disruption.  They roll up their sleeves and work directly with leadership in managing the disruption, communicating the company’s approach, and assessing the ongoing impact on your workforce and customers.  All of Red Clover’s consultants have direct experience in helping businesses and their leaders navigate change, from reductions in force, to a worldwide pandemic, to rapidly growing their workforce over six months.  Let’s chat if you’re a business leader anticipating disruption in your industry and you need the assist to proactively address it.  

Photo by Stephanie Ecate on Unsplash

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The Results

Construction and Contracting

A commercial roofing contractor was in hyper growth mode. They had goals to increase their field workforce to expand their service area to additional states and geographical locations. If they were to grow their field workforce, they would also need to increase their administrative, operational and sales headcount to support the additional workload created by increased field work. Additionally, they were challenged in workforce retention and development, experiencing high turnover, and did not have a dedicated Human Resources professional to manage employee relations and compliance issues that come with trying to scale a business.

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