If you’re seeing the same headlines as I am, you’re getting mixed signals. Most of us have a feeling the economy is going to (take your pick) crash, soar, flatline, or get bumpy. We are in uncertain times. Now more than ever, having the ability to view this as an opportunity is going to be your competitive advantage.
A wise and widely successful mentor used to tell me: “Kenny, people make business decisions on the basis of only two things: fear or greed.” This is why some investors yank their money out of the market when it goes down while others pour money in to get the benefit of lower prices and pick up a 20 percent premium on future growth.
While it’s easy for investors like Warren Buffett or Jim Cramer to say a down market is a buying opportunity, it’s a little harder to do when you’re not a millionaire. And, remember, this is not just about investing in your 401(k) plan or buying more crypto (be careful there!), this is about doubling down on your business, on your marketing, on your talent.
So how can you train yourself to be the person who finds opportunity in uncertainty?
First, understand and get comfortable with fear. Feel it, sit in it. Know what it looks like and feels like. Then, plan for the worst. Finally, practice good EQ (emotional intelligence) to be able to face fear.
Understand Fear
This is how I came to understand fear. I read J.P. Pawliw-Fry’s best-selling book Performance Under Pressure, in which Pawliw-Fry studied the military, Olympic athletes, and professional sports teams to understand how people perform under extreme stress or fear.
The reason we don’t perform well under stress is due to cortisol. According to Pawliw-Fry, it can change how you think and react in three principal ways.
First, cortisol reduces your working memory. That’s the memory you have to juggle a couple of options. When you’re calm, you can see all sides of a problem. When you’re stressed, you usually see only one.
Second, cortisol focuses your mind on that one thing, the perceived threat, the incident that caused you to be afraid. This threat could be anything you fear–housing prices, inflation, crypto prices, or the crisis in Ukraine.
Third, you default to a self-protective strategy. It’s me-first all the time and to hell with your colleagues, employees, and customers.
For example, your fear reaction to a falling market might be to stop buying stocks, sell positions, lay off your employees, and reward yourself with a big bonus (if you’re like some CEOs).
Plan for the Worst
To perform better while afraid, you need to prepare and plan for the worst.
Successful investors, championship athletes, and military personnel all handle pressure better than other people because they plan for the worst–and train themselves to perform in pressure moments.
Investors like Warren Buffett know what stock they will buy when the market falls. LeBron James takes lots of free throws when he isn’t stressed so he can default to his training in big moments of championship games.
For a business owner, handling fear comes down to making a plan for when bad things happen that you can default to. Or, if you’re an investor, you might have cash set aside to purchase certain stocks or mutual funds when they become a better value.
Or, in my events business, we stockpiled cash before the Covid pandemic. We actually planned for a recession. While we didn’t plan for in-person events to be canceled, having the extra cash on hand gave us a buffer to come up with a new plan.
Practice Good Emotional Intelligence
So, what if you don’t have a plan?
If you don’t have a plan or you have new challenges, there is another technique you can use. I practice the SOS technique (developed by Pawliw-Fry) to help when something stressful happens. SOS stands for stop, oxygenate, and seek information.
Stop. When cortisol enters your body, it takes at least 18 minutes until you calm down. Sometimes longer. During that time, you’re working memory is reduced. So, when something stressful happens, stop what you’re doing. Take a water break. Step outside the office or home office before you make a hasty decision.
Oxygenate. Next, take some deep breaths. Get fresh air. Oxygen helps break down the cortisol in your body. Anyone who practices yoga or mindfulness knows focusing on your breath helps calm you down.
Seek information. Finally, when you feel calm, seek information. Ask yourself: Is this threat real or imagined? For example, is your business going down from a market downturn or are you just afraid you might lose business?
Next, seek other people to help you look at your situation. That is, don’t handle stressful problems by yourself. Ask your spouse, colleagues, or employees for input so you can learn more about the situation and come up with more and better solutions.
When Covid hit, my events business had money. However, it wasn’t prepared for all live events to be canceled. We didn’t go it alone or make a hasty decision. We stopped, got some air, and sought lots of advice from mentors and colleagues. This helped us pivot to virtual events–and increase our business!
This article was originally published by Inc Magazine and featured by BigSpeak Aug 22, 2022.
