Traumapreneurship – the unspoken side of SME
I recall a conversation that I had in early 2023 with a business promoter immediately after the COVID pandemic had subsided. She confided in me that it was indeed a difficult period for her. She used three adjectives – destructive, irrecoverable, and unique – to explain how the situation was unlike the usual challenges that her business had always seen.
As I engaged her in understanding her problems, it became evident that she was effortlessly morphing from being an enthusiastic entrepreneur to a traumapreneur!
Running a business, especially a small one is not easy. There are many challenges to face and overcome. Availability and easy access to good quality raw materials, human skills, technology, working capital, not to mention fussy and demanding customers, are all part of the daily grind of an SME. Add a dose of trauma into such a mix of challenges, and the ability to run a profitable business will most certainly be severely impacted.
It is, therefore, vital for SME promoters to understand the different kinds of trauma that businesses may encounter and their impact.
Business Trauma comes in different forms. Most often these arise from a poor understanding and management of the risks to the business; and they include:
Financial Loss – Losing money is one of the worst things that can happen to any business owner. When a business loses money, the entrepreneur needs to make sure about not letting it get out of control. It is essential to take steps to ensure that unmanageable debt-situations are avoided. Reviewing and making changes to the business plan and the attendant financial plan is a must.
Key-person loss – this could be from unanticipated resignations, injury, or death. The loss is in direct proportion to the expertise (knowledge and experience) as well as the networking capacity (customers, vendors and partners) of the key person. Replacement requires time and comes at a cost.
Customer Dissatisfaction – in these days of social media, the loss of market share due to dissatisfied customers can be very painful. Customers expect certain standards when it comes to customer service and failing to meet those expectations can put the business at risk of losing more customers.
Legal Issues – Common legal issues that entrepreneurs face involve regulatory compliance, contractual obligations, licensing, wage disputes, among others. Regular review and assessment of risks vis-à-vis opportunities using professional expertise will save many a tear.
Cybercrimes – Increasingly, the dependence on digital technology and platform-based commerce are exposing companies to unwittingly become targets of frauds or victims from ransomware or liable for failed contractual obligations to protect client data and privacy.
In a manner of speaking, the responses to business trauma are not very different from personal trauma. The four trauma responses (4F) most commonly recognized are fight, flight, freeze, fawn.
Fight and Flight are two diametrically opposite responses with an apparently similar motive. Both are attempts at self-preservation. But while Fight involves a valiant attempt by the entrepreneur to continue the operations in the light of adversity, Flight is an attempt to shut the operations down and minimize the losses. Both Fight and Flight, unless attempted after an objective assessment of the upsides and the downsides, can be self-defeating.
Freezing is ‘fight-or-flight on hold’, where the business further prepares to protect itself. It’s also called reactive immobility or attentive immobility. It involves a period of non-operations during which there is an effort to understand the environment and get ready for the next move.
Fawning, on the other hand is a response that sets the stage for an ignominious end to the entrepreneurial venture. Here, the actions aim to please, appease and pacify different stakeholders in an apparent effort to protect the entrepreneur from further harm when facing the threat.
While it is generally understood that most of the impacts from business trauma are deleterious, it is smart to recognize that there are some positive ones too.
Work Ethics changes for the better – the pressures to overcome the trauma usually involves changes and the need to showcase the best aspects of the venture usually dictates the improvements in work ethics of the team.
Increased Productivity – Businesses that have faced tough times often become more productive. For instance, marketing techniques and sales processes are adapted to become more effective. Cost reduction, quality management penetrate more easily across length, breadth and depth of the organisation.
Reinforced Relationships – The trauma offers an avenue to build better relationships with partners, employees and customers. Improved communication between teams can help people become more open and honest. This will make them feel comfortable enough to share their problems and concerns.
New Perspectives – Businesses that have experienced traumatic events can learn how to move forward in a way that is different than before. There is a drive to start thinking about new ways to approach challenges.
The paradox of trauma is that it has both the power to destroy and the power to transform and resurrect. Trauma creates a change that you did not choose. Healing is about creating a change that you choose.
Trauma is trauma. There is nothing about its quantity or quality which makes it different. But the response to trauma can tell a lot about the entrepreneurial quality of the team behind the SME.
About the Author :
T R Giridhar (aka Giri) is a Partner at Just Bespoke Advisory LLP, which is a strategic business advisory firm focused on mentoring SME CEOs and entrepreneurial start-ups in understanding and navigating emerging business contexts so that they can continue to succeed and grow.
