A Recession Is a Perfect Time To Kill Off Parts of Your Company That No Longer Work

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One of the hardest things to do at a company is to kill off the parts that aren’t working. A company is all about building things, not destroying them. So it’s unnatural to go about tearing it apart. 

But every so often, it’s necessary. To keep the business healthy, you have to take a hard look at operations and get rid of areas that are no longer important or contributing to growth.

And timing is critical for this. Killing off parts of your company is hard enough, but doing so early is truly difficult. That’s why one of the best times to take a hard look at what parts of the company you need to get rid of is during a recession. 

If you have a big enough company, you could even designate someone as CKO — a Chief Killing Officer. That person’s entire job would be to look at everything the company does and try to kill it.

Here are some areas you should look at closely during a downturn to see what you can destroy:

1. Take a look at your products.

In a downturn, a company should focus on what it does really well and let go of what it doesn’t. That’s why it’s essential to take a hard look at your products to see what you can kill.

For example, Uber has a lot of initiatives involving trucking and self-driving cars.  Those might be really good investments or they might be distractions to their core businesses.  This is a good time to really dive into them.  

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Imagine where your company would be if it outsourced everything it wasn’t good at and focused only on what it was good at. A recession is a great time to ask this question and see what you can lose. 

2. Re-examine your features. 

Your products may have features that you once thought were important, but are now no longer necessary or demanded by customers. The energy that you spend to keep those features up and running may be better spent building something new. A recession is a perfect time to slay them with impunity. 

3. Refresh your code. 

Software code is worth re-visiting in a downturn because it can be optimized after its initial implementation (which may be a long, long time ago). Code is the backbone of your business, and when you don’t review it regularly, it can cause setbacks and long debugging hours after you’ve written new code on top. Use a recession as an excuse to get “back to basics” and make sure your code is solving more problems than it’s causing. 

At SafeGraph, we run a “SweepGraph” every quarter to clean up our old code, comment on code, and turn code into micro-services.  Of course, one should do that ongoing but often you are moving too fast to do things “right.”

4. Re-evaluate your people.

During a downturn, check-in on employees to look out for bad hires, negative people that bring others down, or people that are not adding the value they once were. And never settle for “average” people. As Reed Hastings is famous for saying: adequate performance deserves a nice severance package.

And remember, there’s never a good way to let go of employees, but some ways are better than others

Adding a few more 10xer employees will make a big difference to your company. Recessions are good times to recruit — so you can up-level people that are not performing.

Of course, companies should be doing this all the time, but recessions are good forcing functions.  

5. Scrutinize your meeting culture. 

As a company grows, so does the number of internal meetings. Internal meetings are essential for communication and decision making, but some are legacy meetings that were created for a particular past purpose but are no longer massively beneficial. Strive to kill these meetings in a downturn. 

Only keep meetings that are very beneficial to all attendees. And make sure only people who actually need to be in the meeting attend it. Over time, there’s attendance creep where non-essential people start attending meetings. Focus on keeping meetings short, on topic, and with as few people as possible.

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6. Cull your reports.  

Sometimes the CEO or a board member asks for a report, and it keeps getting produced for years after it is valuable. In a recession, work to kill these reports (even if they are automated). Reports that are not being read and acted upon are a big waste.

7. Buy out investors who don’t add value. 

Even investors and board members should be on the chopping block. Some early-stage investors don’t add much value as your company grows. Buy these investors out — many of them will be happy to give up their stock for a decent return in the middle of a downturn.

Also scrutinize your board members and advisory board members — everyone in the company should be adding value.

8. Revamp your processes.

Many internal processes (like performance reviews) are really useful. But many of these processes that once were important can later be burdensome. Slay these processes before they kill your company in a recession. 

9. Review your HR practices.  

Your company has to be able to move quickly during a recession. More likely than not, your HR is slowing you down. 

A lot of HR practices are vestiges of the past or should have never been implemented in the first place. Try to kill all non-essential HR policies and practices as these can turn your company from a fast-moving start-up to a bureaucratic maze. One of the first things to look at is all the forms a new employee has to fill out.

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10. Reflect on your performance. 

A recession is a great time for self-reflection as the CEO. You learn a lot by navigating your company through a downturn, and it’s important to reflect on it.

You might be thinking, “wow, we’re in bad shape because we are terrible at killing things, and we’d be in much better shape now if I’d done all this earlier.” You’re not in as bad of shape as you think because very few companies are actually good at killing things. Just recognizing that killing parts of your company is an essential part of your job, you’ll have a leg up on many of your competitors.

If you want more ideas on how you can navigate your company through a recession, read my article on how your start-up can not only survive the recession but actually come out stronger

See you on the other side!

Special thanks to Thomas Waschenfelder for his help and edits.

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