Put on Your Seat Belt First

The importance of an entrepreneur's mental health cannot be underestimated, but it is often the most ignored aspect of an entrepreneur's attributes. A stable mindset is essential during normal market periods, but it is critical as things get tougher. As the leader of the pack it is the responsibility of CEOs to ensure they are in the best shape of mind to take on the crisis.

Understanding oneself through introspection and self-evaluation is a critical ingredient of an effective leader. This is of the highest importance, especially during a crisis. But self-awareness can often be a counterintuitive subject for a start-up CEO. Most top CEOs I have worked with have big egos. They are often too clever for their own good. I genuinely don't mean this in a negative light. Many of them do well because of these big egos and their resolve to prove the naysayers wrong.

It is their defiant nature that often gives them the strength and the grit to create new products, markets and go big on their vision. CEOs of start-ups get there because of their optimistic disposition for their business and the unflinching self-confidence with which they run the show. Their vision and the ability to thrash criticisms with conviction make them effective leaders who can take their businesses to new levels. However, they have to curb some of these natural instincts during times of a crisis.

It is important to prioritise preservation ahead of acceleration, growth and world conquest when the world is in a crisis. In order to make that mental switch, CEOs need to become self-aware and look at themselves. It is a hard task to keep their natural instincts in check and respect the context of the macro landscape that they will be operating in, at least in the short term.

Before entrepreneurs start evaluating how to run their business, they need to have a firm footing on where they stand mentally. If leaders lack clarity during a crisis, their decision-making capability will be badly affected. Some CEOs and business leaders I have had the pleasure of working with thrive during a crisis. A crisis brings out the best in them. Yet, it is often prudent to take stock internally (in your head) before jumping into action.

The Emotional Gym

Being a CEO can often feel lonely; therefore, be honest with yourself about where you are mentally. It is absolutely fine to be super-stressed for yourself and your firm during this time. There is no need to feel like a superhero. It is only human to have a breakdown during tough times. I remember listening to a Bloomberg documentary on Elon Musk, where he confessed about crying through nights and waking up to wet pillows. It happens to the best and the most persevering entrepreneurs. However, the important thing is to assess and accept where you are mentally and reach out for help if needed.

Most of us seem to understand the importance of physical health much more than mental health. We are absolutely fine to go to the gym and exercise even when we haven't had fitness issues. But when it comes to mental health, most people do not attend to it until there is a sickness such as depression, anxiety or panic attack. The mind is akin to muscles that need looking after regularly as a ‘business-as-usual’ process. However, most of us react to mental health issues, rather than proactively dealing with them. It is not some technical debt that can be put aside and attended to later.

I must talk about an incident in a firm that I worked with in the past. A year after I got involved with this firm, I received a WhatsApp message from the COO that the CEO had committed suicide. Apparently, the founding team had known that the CEO had depression issues almost a year previously. Yet there were no disclosures to the board or to the investors until the fatality occurred.

It is hard for me to fathom the amount of pressure the CEO must have gone through to take his own life. However, if the founders of the firm took proactive measures, there might have been a better way of solving this challenging scenario. I must admit, it is not an easy problem to solve.

As investors or board members of a firm hit by such an issue, we can demand transparency. However, as a founding member of a firm, it is understandable to fear being asked to step down if the person revealed that his or her mental health is not where it should be. Therefore, it is reasonable that founders typically want to keep it quiet. But founders must realise that by not reaching out for help, they may be subjecting themselves to the same situations that got them into that worrying mental state.

Therefore, here are some suggestions:

• The founding team other than the person going through this issue must take ownership of this challenge and create transparency at least to the board of the firm.
• The board must first understand the severity of the issue. They must demand a professional assessment of the condition.
• If the prognosis is bad, then the right decision for both the CEO and the firm is for the CEO to step down, or step back at least until the CEO gets better.
• If the condition is not bad, then the board could allow the CEO to continue and perhaps offer support until treatment is completed successfully.
• The management team must step up to support the CEO and agree on a more frequent reporting mechanism to the board until things are better.

In essence, transparency, accompanied by objective and humane decision-making, is key to dealing with mental issues.

A request to the VC community: we have responsibilities to make money for our LPs. But that must also take into consideration humanitarian boundaries that we should respect. VC investors who have close LP oversight might have challenges in supporting a founder going through such mental health issues. In such a scenario, the VC investor must clearly articulate to the LP the issues that the portfolio firm is facing due to the CEO's condition. LPs could receive frequent updates on the situation as well. Transparency is the best policy in such situations, and remember, bad news travels fast anyways.

Let us now come back to the self-assessment that a CEO must go through. For CEOs seeking help, it doesn't have to come from outside necessarily. In his book, Reboot: Leadership and the Art of Growing Up, Jerry Colonna discusses the importance of not just focussing on resilience but also on equanimity. Resilience and grit are often highlighted as the attributes that mark the best CEOs. However, resilience with equanimity is what really makes you stand out when life throws a curveball at you.

We all have the ability to dig deep within ourselves and galvanise strength to face the challenges that lie ahead. However, most of us don't know how to tap into those abilities. Therefore, it might be good to talk to peer CEOs who might have gone through similar challenges, investors whom you trust, mentors and/or take professional help if necessary. Creating a support system to help us through the journey can make all the difference.

Organisational Emotional Fitness

One of the ways of preparing oneself for the task of taking on a crisis is to get into a whole-brain state. During times of stress, there are high levels of cortisol produced in our body, which can lead to a brain shutdown, resulting in bad decisions. You do not need to get a panic attack every day to start focussing on your mental health. You might just be reacting to triggers unlike before, in ways that could be starting to surprise you. Being in a good state of mind just enables you to deal with such triggers in a healthy way.

You will need to be in a place mentally where you are able to analytically break down the challenge ahead and make quick decisions. Yet, some of these actions might have to be done with empathy in times of a crisis. Therefore, it is essential to ensure that you are in a ‘whole brain’ state before any key decisions are made as a response to a crisis. The left half of the brain, which is analytical, needs to work with the right half of the brain, which is empathetic and creative.

Getting your creative side of the brain activated is essential. This exercise is important for a firm dealing with a crisis, especially for key decision makers. A crisis is a time when empathy needs to be demonstrated at all levels of your organisation. People need to trust each other to communicate transparently, especially during tough times. Get engaged in playful groups and fun routines that can help the entire workforce. Activating the creative side of the organisation's brain can help during times of crisis.

As the founder of the firm, you can see yourself as its parent. The children in a family get inspired and affected by the behaviour of the parent. That is true in a firm, too. In order to get your team to a healthy state of mind, you must be in a healthy frame of mind. That then translates well into connecting with your team, being authentic, transparent and empathetic so you can understand the emotions on the ground.

Coming back to mental health, there are several techniques to get into a whole-brain state of mind before taking on business challenges. This book is not about recommending yoga over meditation or mindfulness, or running over a Peloton session. All of us have ways we recharge ourselves physically and mentally. Several CEOs I work with have had to get into a routine at home as soon as the COVID lockdown came into force. A healthy morning routine involving either a workout session, a walk or a yoga session, helped them clear their minds before taking on the challenges of the day.

I find that I am at my best when I have a good workout routine, ideally with my personal trainer, alongside a healthy diet. I have also had the good fortune of learning a new technique called Psych-K to stay in a whole-brain state of mind while making difficult decisions. There are other modalities that could work, but it is critical that we are at our best before we get into action. All our faculties need to be aligned to take on the challenge ahead.

Once you have evaluated your mental abilities and are in a position to influence the firm's mental fitness, it is time for an assessment of where your aptitude and passions lie.

You and Your Business: A 3D Model

Crisis often brings out the best in people. Those who take it on and embrace it become pioneers who go on to lead their firms to new glories. Crisis can also bring out honesty and a real understanding of purpose in life amongst entrepreneurs. It doesn't necessarily mean you have been a liar all along. But in the busy-ness of building a business, you might have gotten too close to it and forgotten the reasons why you started it in the first place. In times like this, I typically suggest going back to a simple framework for evaluation, which starts with three simple questions:

• Are you still passionate about the business?
• Do you think you have the skills to drive the business forward?
• Are you still a relevant leader in a crisis-hit world?

Let us now look at each of these questions in greater detail

Skills I must admit, it's harder to answer the skill question than digging deep to see if you are passionate about the business. However, as the leader of a business, you should know your circle of competence. You have built competence in certain subject areas over the years and that is worth considering in these times. If the skills required to lead the firm are still within your circle of competence, you should be fine.

Even the best CEOs I know have some levels of self-doubt about their abilities to take their firm through a crisis. In such times, it is important to be objective and assess where the gaps in the skill levels are. Do not let the voice of self-doubt overcome your desire to lead the firm if you are qualified from a skills perspective.

The objective assessment will need to be in terms of where you are lacking as a leader of the pack. If you have been a visionary, yet have struggled with commercial negotiations in the past, you might want to consider identifying someone in your organisation who could step up to support you with the commercials. Remember, a crisis will demand renegotiations with several stakeholders.

You might be someone who is commercially savvy, yet operationally not in the detail. In that scenario, you might want to get the best operational person in the organisation to step up to support you through decision-making at a more granular level. Yet, these decisions will need to be preceded by your understanding of what you are not good at. Your mentors should be able to help you with the exercise of understanding gaps in skills.

After the assessment, if you feel that your skill levels can be complemented by another member in your firm or someone or something that can be quickly onboarded, then there is not much to worry about. If your passion levels are high enough, and the skills needed aren't too far away from what it takes to lead the business forward, you should move on to the next step.

Step Away

You also might find that you are not as passionate about the business anymore. This is typically when the firm has moved on from the course that you charted for it when you initially founded it. It could also be that the board and the markets are driving the business in a new direction which you’re not too keen on. In such scenarios, it can be hard to find the passion to commit to a course of continual problem-solving that a crisis would warrant.

It could be that you are still on course with your vision for the business. But perhaps even before the crisis hit, you have been asking yourself and the people you trust if you were the best person to lead the firm. You either felt that your skills were perfect for a start-up, but for a scale-up and growth stage business you were starting to be convinced that you weren't the right person.

It is difficult for you to lead the firm through a crisis if you are not convinced of your ability to do so. It is only fair that you hand over the responsibility to the next best person to lead the firm. But please do so carefully. It might be a well-known fact within the firm that you are considering a change in leadership, but the markets are still looking to you as the leader. Therefore, do not shock the market and the firm by mistiming your move away from leading the firm. It might be better to get your firm to a position of relative strength before you step down as CEO.

It might therefore be the best thing for the firm and yourself if you stayed honest and planned a course of action to step down. However, if after the assessment, you still feel confident about taking on the crisis, it's time to take the bull by its horns.

Switch Off or Snooze

Two important things that entrepreneurs often overlook are family time and sleep. I am guilty of that as much as anyone. However, it is important to switch off from work from time to time. Sometimes, a little distance from problems in hand will make them look smaller and help arrive at solutions faster. For me, spending time with my family is important because it obviously fills the house with joy and laughter and keeps the family happier and closer.

I also find that family time gives me a sense of perspective when I look at work-related problems. I am less desperate to solve them and that puts me in a position of strength mentally so I can take problems on with relative ease. That sense of perspective can be all you need to solve work problems.

A day trader friend of mine believes in switching off from work and follows that religiously. When he gets into two bad trades on a day, he stops making any more decisions for the day. He just shuts down the setup for the day and has some quality family time and comes back with a clearer mind the next day. He attributes his success as a day trader to a clear mind when he starts making decisions.

Switching off from action completely might not be an option for entrepreneurs preparing to navigate their firm through a crisis. Alternatively, taking periodic breaks can be a refreshing process while you are problem-solving.

The other secret ingredient for a balanced mind is sleep. How many times have we gone to bed stressed and woken up lighter? A good night’s sleep can often be the medicine that can bring clarity of thought. Despite sleep being such a help, I find entrepreneurs giving up on that the most. The best entrepreneurs know when they are at their best and when they need to switch off and retire for the day.

The challenge with sleep is that it has a vicious cycle relationship with stress. A stressed mind that is racing fast keeps us from sleep. When this becomes a regular habit, it can lead to insomnia and further stress. There are several ways to break this cycle and get some quality sleep.

One of my colleagues who had sleeping problems used to come to work in a really bad state. Often we would just see him entering work or hear him on the phone during a call and we would know he hasn't slept well. I suggested he should try hypnotherapy videos on YouTube. My favourite is Michael Sealey's hypnotherapy videos, which I listen to often. After he started listening to Michael Sealey's hypnotherapy sessions, he said he slept much better.

There are other techniques, such as simple breathing exercises, mindfulness and progressive relaxation that can all improve sleep quality. Please note that it is not professional medical advice that I am offering here. I am just pointing out different techniques that an entrepreneur can benefit from. Some of these techniques can work wonders while some might not really make any difference.

Once the introspection part is over and you have got to a calm and composed state of mind, the next steps are to ensure that you have bounced off some of your key thought processes with someone you respect. Most of us have mentors, advisors or a support system to discuss ideas and get feedback from. This process is more important during a crisis. It could be an advisor of your firm, a friend from your founders' network, an investor or just a family member. A mentor can go a long way to help you in chaos.

Mentoring

Mentoring can make a tremendous difference when you are looking for clarity during times of stress. I have always taken inputs from selected people at work or from family or friends, depending on the problem I am solving. The person I choose is someone who does not have vested interest or strong views in the problem domain. A mentor with vested interest could provide biased inputs and that could cost you precious time and resources during a crisis.

I also don't go to people who would just blindly support my ways of thinking. You will need someone to be critical when you want to make tough decisions. The fact that you might be grilled during a discussion with your mentor will make you analyse the problem more thoroughly before taking it to your mentor. At the end of such a grueling discussion, you should be clearer about what you intend to do.

You might have a few mentors whom you always fall back on. You would do well if you made sure that your mentors were in the right state of mind while they advise you. I remember a discussion when a start-up CEO was asking for advice from three of his investors about a possible quick fundraise as a crisis hit. One of the investors asked him to go for a down round without evaluating all the financing options they had on the table.

The investor clearly wanted a bigger slice of the firm for a cheaper price. However, he had failed to recognise that the company was in good shape because their revenues were sticky and the market they were serving was stable despite the slowdown. I had to pull the CEO aside and tell him he must evaluate cash flows, perform scenario analysis and ensure all other funding options were exhausted before going for a desperate down round.

There are other avenues of support. Some investors have started a support network of CEOs for their portfolio firms during the COVID crisis. This brings CEOs together (virtually), allowing them to share their experiences. This activity can be extremely helpful when you are looking for creative ideas to take on the challenge ahead.

In essence, it is essential to know whom to take inputs from during a crisis and which are the right ones to act on. However, a good mentor's role can't be exaggerated in difficult times. If nothing else, a mentor can be someone whom you can share your deepest concerns with, without fear of being judged. That alone could make a major difference during tough times. At this stage, however, let your mentor know that you will need time from that person as you navigate your firm through the crisis.

Executive Coaching

I can almost hear you saying ‘here you go’ at the sight of this topic. I must admit, I am not a big fan of executive coaching. I believe that experience coaches us better than education. However, the right person, who understands organisational behaviour and has extensive experience in psychology, can help with several aspects of your leadership traits.

Following are some of the benefits of executive coaching:

• Improved self-awareness
• Empathetic leadership
• Better time management
• Enhanced people skills

An entrepreneur needs the right balance among work, life, vacation, exercise, food and sleep at all times, but especially during a crisis. However, if you are an early stage start-up and are looking for a Series A, perhaps you are not taking enough salary to pay the crazy hour rates that a coach could charge. A good mentor would still be an excellent option in that case. Try to find someone with whom you can discuss your plans and from whom you can take advice. Ideally this person should not be operationally involved in your business.

Now that you have gone through an exercise of introspection, refreshed yourself and taken some input from your mentor or support system, it's time to charm a few stakeholders.

Connect and Inspire

A CEO's first role during a crisis is being the CIO (chief inspiration officer). When I look at a team of cofounders, the CEO should be the one who can storytell and paint his or her vision in rich colours. Inspiring doesn't have to be limited just to the team. In times such as this, it is important to be able to inspire a wider group of stakeholders across the organisation, partners, vendors, suppliers and investors.

The Team: It is important to first connect with your team. You might not have your plan of action to take on the crisis yet, but speak to your team frankly and with authenticity about the challenges ahead. Be genuine because trust breeds loyalty. Tell them where you stand as an individual first and then give them an overview of the health of the business. Remember, the data collection you did on competitors, product and funding before the crisis hit? Use that data to show them you have it in you to sail through the storm.

It is not just enough to send an organisation-wide email from your desk and expect your team to jump on the ship with you. More details on a crisis communication architecture is in Chapter 4. Crisis is a time when you should make yourself more available to your whole team and kill red tape and bureaucracy. Organise an informal town hall or a Zoom chat with a theme to lighten the mood.

Get creative with ways to connect emotionally with the team and show them you are as affected by the situation as they are, and you are more committed than ever for their sake and for the firm's sake. Humanise the situation as much as you can. But also be honest. If you are based in one large floor of an open desk office, just climb on top of a desk and shout out to your team. Gestures such as these make you more informal, human and approachable. Show your team that you are going to take on the crisis and you have it in you as a CEO and as a firm.

There might be questions from your employees about cost-cutting measures. It is important that you anticipate that, and answer those questions with a sense of conviction. The answer could be that, after an evaluation of cash flows and discussion with the board, there will be an announcement shortly on ways to navigate the situation. Give your team ways they can approach you if they are stressed. Choose someone on your team who can deal with grievances on a regular basis.

Investors: Remember, you are going to be in the inspiring mode for some time. Once you have connected with the team the focus needs to move to investors. Connect with your investors so that they know you are up for the job and can trust you with their monies. Never get into an investor conversation and deliver bad news straightaway. Even in the toughest times, there are always reasons for hope and cheer. Talk to them about these things before starting your sighs, huffs and puffs.

Reasonable investors generally understand running a business during a crisis and know that it is not going to be easy sailing. Therefore, they are not expecting you to deliver a lot of positive news. However, show them that the business is as healthy as it can be. Be genuine and authentic, not salesy. Speak with conviction even when you are delivering news about the pile of crap you find yourself in. Offer to connect with them more regularly, such as once in a fortnight or so, and do not wait for your quarterly board meetings to give them updates.

If you are fortunate like my portfolio firm BibliU, which is benefiting from the digitalisation during the COVID crisis, you have a strong positioning when you talk to your investors. Ensure that at the end of the discussion with investors, you fill them with confidence about your commitment towards the business. However, make sure you inform them that you will need their support if the business hits cash flow challenges.

Existing investors will typically be your early backers in a crisis. Therefore, make sure you set that expectation without sounding desperate. If you have to go back to them for investments during the crisis, it should be an easier discussion. Having the backing of existing investors during a crisis is also the litmus test that potential investors with dry powder are looking for.