In my opinion, many SMEs have unwittingly fallen into the ‘boiled frog syndrome.’ This refers to a situation where one gradually adapts to a deteriorating situation without being able to react properly and save oneself.
The name of the syndrome is based on the idea that a frog put in a pot of water does not understand the impending danger if the water is heated slowly enough. The frog uses its energy to adapt to the situation instead of escaping. Eventually, when the water boils, the frog is powerless to save itself and dies.
Had the frog been dropped into a pot of already hot water, it would have immediately jumped out and saved itself.
Many companies and their CEOs have been enduring exceptional circumstances for three years in a row. This era began in spring 2020 with the coronavirus, for which we offered thought and solution support to our customers and in general to Finnish SME scene.
One Situation After Another
Coronavirus, inflation, labor availability issues, leadership challenges brought by hybrid work, component shortages, layoffs and co-determination negotiations, extended delivery times, rising interest rates, the threat of recession, turmoil in the financial markets…You too have experienced several of these challenges.
Your profitability, growth, cash flow, and balance sheet have been under pressure for a long time. So, the water temperature in your pot has been continuously rising.
A Frightening Combination
Burnout + time pressure + the need to make decisions + the magnitude of decisions + incomplete information = a poor starting point for good decision-making.
Do you need to start co-determination negotiations? Where to cut costs? What does cutting mean for the business after the crisis? Can you get financing and under what conditions? How to keep your best talent? Are banking covenants breaking? How much will suppliers increase their prices next time? Will I, as a guarantor, be held responsible for our loans? Should the business be shut down?
Looking at the above, it’s no wonder CEOs are currently sleeping rather poorly.
Where to Find the Strength to Jump Out of the Pot?
This year, as in previous years, we have helped several companies and their CEOs recognize the warming water and escape while it is still bearably warm.
The objectives of our joint projects have been to…
- identify all the crisis’s effects on your business now and in the future,
- understand the most critical areas you can manage and at the same time the areas you simply cannot influence or where you should not waste your limited energy,
- time your decisions and actions correctly,
- avoid timing actions incorrectly (yes, this is different from the above),
- size your actions correctly,
- explore all possibilities for reaction, survival, and even success,
- consider immediate effects as well as second and third-degree consequences,
- avoid tunnel vision in a pressurized situation.
If this text resonates with you and you want to discuss confidentially, do not hesitate to contact me, Aamu’s CEO Tuomas Paananen, directly or our other experts. We are here for you, both in good times and challenging times.