Lessons for Death
2. If you can’t get to a positive cash flow, you have to liquidate in one manner or another—quickly.
At this point, it’s about preserving as much value and as many jobs as you can. It’s also about repaying your debt obligations as much as possible. If you move quickly and put your ego aside, you can find someone else who can make better use of what you have. Your house is on fire, so you no longer need your furniture…but someone else might. Shed all unnecessary overhead, except the very bare minimum, and then sell off remaining assets quickly.
Task: It’s time to amputate. You either cut or everyone goes down with the ship. The biggest mistake that leaders make at this point is that they shave costs rather than cut them deeply. If you are burning cash, you cannot shave your way out of this situation. You need to cut deep and cut fast. Cut major divisions, major customers, and major overhead. It may feel shocking at first, but the company will adjust faster than if you were slowly shaving away. When employees and all stakeholders see “shaving,” it will eventually start to feel like they are drowning in quicksand. Cut deep and cut quickly. You will need the additional cash flow to turn the company around.