Business failures, especially in real estate, are nothing new. Several builders fail to make it after registering losses amid difficult market conditions. In fact, a recent report by an analytics firm said over 50% of the developers that had existed in India’s top nine cities in 2011-12 exited the market by 2017-18. If this was true earlier, one can only imagine the odds of developers surviving after the pandemic.
In an industry where investments for input and development are high and prone to volatility from external factors, the slightest error in forecasting can have a multiplier effect on losses, making recovery extremely hard. This holds true, not just for real estate but any capital-intensive business.
Typically, businesses that find themselves in this struggle do not intend on cheating or abandoning projects and customers. Nevertheless, investors end up feeling cheated when the business fails to deliver on promises, or ends up having to retreat from the market.
Recovering from a crisis is an uphill climb facing stakeholders. Holding the business accountable or meeting deadlines, when facing pressures of additional resource requirements, can be a daunting task.
Those who do recover, however, have one thing in common, a proverbial secret trump card that helps them sail through: they show up in the face of adversity.
While staying afloat requires intense resource management through reallocation or strategic partnerships, reputation management is also critical. When survival is at stake, having the courage to show up can be the deciding factor between revival and regression. Showing up when everything goes down is no small feat. Not only are all your professional and personal relationships tested, but your self-image and social reputation becomes a barrier to moving forward.
However, communicating directly with stakeholders while battling one’s own inner demons, including shame or embarrassment, has multiple rewards.
Communicating, to control the crisis
Preventing further damage precedes reconstruction. Direct communication prevents further reputational damage. Aggressive competitors who stand to gain, or unhappy stakeholders holding a grudge, can leverage the crisis by initiating misinformation that can trigger exponential damage. Rumors can be stopped and contained in their tracks when businesses directly communicate with impacted stakeholders.
Showing up is opening up to support
Withstanding criticism and disappointment, and showing up, sends a signal to internal and external stakeholders that the business leaders are here to fight the battle and not retreat. It indicates accountability, even to disgruntled customers and it motivates internal teams and stakeholders to go the extra mile and stay the course.
It has the power to transform disgruntled clients and customers from critics to allies. Clients start co-owning projects and partnering the revival journey.
Transparency begets trust
Transparent communication and encouraging participation by those most severely impacted by the business failure can, in fact, counterintuitively, rebuild hope and initiate the process of revival of trust. It also re-channels their energy into partnering instead of provoking and pursuing attacks.
When past commitments are yet to be honoured, going the extra mile and delivering on promises, before communicating any further commitment, is the route to rebuild credibility and regain stakeholder confidence.
Showing up needs focus and preparation to remain unswayed by critics (external or internal). One needs to dedicate all energy and resources towards constructive action, to rebuild trust and credibility through phased, single-minded delivery. A clear vision and a team focused on the path to recovery, become key requirements that can aid the arduous journey.
If more business owners, in the crucial moment of truth, rely on courage and show up, there can be greater chance of constructive revival through community action. This will benefit the business, the market and the economy.
(The writer is founder and CEO, Marvel (Luxury) Realtors, Pune)