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3 Mistakes Businesses Make During a Crisis

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No business is immune to a crisis, but some recover better than others by avoiding these business mistakes.

Throughout the course of any technology business–from start-ups to established businesses–periodically, crisis hits. These crises could be related to finances, a key employee leaving, industry changes, and so on. There are three mistakes that most often affect a company’s ability to cope with and recover from a crisis.

Mistake #1 – Dissemination of Information

When things go south, there are often two information-related mistakes management makes. First, they ignore sharing information with employees, which churns the rumor mill. In many cases, the rumors that come about are far worse than reality and can lead to poor decision-making further down in the business structure. It is incredibly important to share information as quickly as possible, even if that is simply to state that you have no further information.

Second, when management does decide to tell employees what is going on, they often do not have a plan or strategy in place. These meetings might communicate that the business is trouble and people will be laid off, but they do not know who, timing is uncertain, etc. While sharing information can be critical, providing half-baked information can make matters worse. At this point, it can unnecessarily decrease productivity, increase stress, and cause emotional distress.

Mistake #2 – Unilateral Cuts Without Considering ROI

When things get tight financially, businesses often make across the board budget cuts–including those designed to generate revenue. Businesses become so budget-focused that they are unable to look at the opportunities in front of them and evaluate the return on investment. Instead, they look at a price tag and say, “We can’t spend $5,000 to make $50,000 because it’s not in the budget.”

This same issue applies to engineers who are looking to purchase tools like compilers, analyzers, and software libraries. The focus is on the upfront cost, not the savings that will be gained through greater productivity, more robust products, and better customer experience. Without considering return on investment, generic, across the board cuts will likely be a nail in the company’s coffin.

Mistake #3 – Try to Maintain and Return to Business as Usual

When markets and industries shift, or major world events occur, companies try to hunker down for the storm, believing that if they can just get through the next quarter or the following one, everything will be fine, and they can return to business as usual. The problem with this line of thinking is that there is no such thing as business as usual. The environments in which engineers operate are constantly changing and shifting. The attempt to get back to normal is most likely folly. There is no such thing. Normal is constantly changing.

Instead of looking back at where they were, businesses and teams should be looking forward to where they need to be. How can the current circumstances be used to shake the foundation of existing models and usher in new, leaner, more innovative ones? Standing still or trying to run backward never got anyone where they wanted to go and, if it did, they did not get there very quickly.


With a pandemic sweeping the globe, we find ourselves in unique times–many forced to work remotely or not at all. But, the fact is, we are always living in unique times. There are always challenges to face. During times of crisis, businesses can not only survive but really thrive. For this to happen, businesses and their teams must look beyond simple survival and a return to normal, and start examining what they can do to succeed under the circumstances.

While budgets may be tight, now is the time to innovate, do things differently, and seize opportunities to not only survive a crisis but come out the other side better than before.

Jacob Beningo is an embedded software consultant who currently works with clients in more than a dozen countries to dramatically transform their businesses by improving product quality, cost, and time to market. He has published more than 200 articles on embedded software development techniques, is a sought-after speaker and technical trainer, and holds three degrees, including a Master of Engineering from the University of Michigan. Feel free to contact him at [email protected], at his website, and sign-up for his monthly Embedded Bytes Newsletter.

TAGS: Business
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