Springfield Business Journal_2021-03-29

SPRINGFIELD BUSINESS JOURNAL · 23 MARCH 29 -APRIL 4, 2021 W e are dead center of the one- year anniversary of 14 days to flatten the curve. It’s been a grueling and challenging year for everyone, and for many, it’s been a year of tremendous loss and suffering. For business owners or leaders of organizations, this has been a year of uncertainty at almost every level from economic and political upheaval to em- ployee health and safety concerns, policy changes, loss of sales, travel restrictions and equipment supply issues. One of the biggest challenges for leaders may have been the absolute loss of control. Most lead- ers want to be in control of their ship and at least be able to steer it in the right direction. However, the “right” direction was very unclear for several months. When you add in government mandates costing small businesses billions in lost revenue, it goes south quickly. As we start to consider business after COV- ID-19, here are five things that leaders can do to help give their organizations the best chance of rebuilding strong. 1. Inspire confidence. Leaders must clearly define the current real- ity (the good, bad and ugly), but then articulate a very clear path forward that results in success for the company. I know throughout the last year no one on our team wanted it to end here because what we have is worth fighting for and employees’ livelihoods are important. Teams need to be reas- sured that leadership has a plan and that we will make it through the storm. 2. Align teams to the mission. Leaders are often guilty of getting frustrated because we are not happy with our team’s per- formance. The reality is that we have not clearly communicated the expectations. It sounds simple and maybe condescending – but we have a strate- gy for a reason. Let’s make sure we share the vison for alignment. Having a team aligned to the mes- sage is what separates average teams from high performing teams. 3. Work on the business. I think you have to be laser focused working on the business, not simply in the business. As lead- ers, you are more valuable to the organization being focused on the big picture, the future and trying to identify the next boulder coming at you. Great leaders are thinking every day about what makes their organization unique, while constantly trying to improve the value proposition, find bet- ter ways to serve the customer and constantly find ways to improve profitability. Keep your eye on the future, politics and the economy. Do what only you can do and let someone else do the rest. 4. Make decisions. It is critical that leaders have the ability to make a decision, even if it’s not the right one. Not mak- ing a decision is a decision. As we look at life af- ter COVID and how things have changed, there will be big decisions that must be made. Don’t be afraid to make them. Owners and leaders can earn their entire salary by one big decision they make every year. For our companies, the decisions made one day last March saved the company, but they were not easy decisions. 5. Hire right. As business returns, most companies will start hiring again. While filling positions will be impor- tant, make sure you hire right. You want the most value for the dollars spent, but more importantly, it’s critical to maintain company culture while you do it. Many companies will not have extra cash sit- ting around, and there won’t be time or the finan- cial resources to deal with bad hiring decisions. I always say: slow to hire and quick to fire. Take the time to make sure it’s right, and if it’s not, don’t waste time dealing with it. Donnie Brawner is CEO and owner of Paragon 360 and Paragon Fabrication. He can be reached at dbrawner@paragon360.com. OPINION Year of pandemic takes down bankruptcies Now’s the time to lead in your business Building Blocks Statistical Surprise W e all can count the difficulties of the past 12 months. One business item not on that list is bankruptcies. 2020 was actually a good year for bank- ruptcy filings. What I mean is fewer individuals and businesses filed for bankruptcy protection in Missouri and the Springfield court division. According to a U.S. Bankruptcy Court case filing report for Missouri’s Western District, the num- ber of bankruptcy filings on this half of the state was down by almost a third last year to 5,104 fil- ings. It was a 28% drop for filings in Springfield’s Southern Division to the 2020 tally of 1,170 bank- ruptcies. Statewide, the trend continues. Hop across to Missouri’s Eastern District, and case processing records show 25% fewer filings. Let’s do the math to find statewide there were 12,174 bankruptcy filings made in 2020. The year prior in Missouri the num- ber was 16,575. That’s a 27% swing. In the year of the pandemic. But it’s not just a notable change over the past two years. In Missouri’s Western District, last year represented the lowest bank- ruptcy tally in any of the past dozen years at least. On the business side, specifically, the number of Chapter 11 reorganization filings in the court’s Southern Division in Springfield can be counted on one hand – with one digit to spare. Yes, there were four. There’s only been two other years with single- digit Chapter 11 filings in the last dozen years. That was seven business reorgs filed in 2016 and nine in 2015, according to a report of Missouri Western District annual case records going back to 2008. So, what gives? In a year of business shut-down orders, staggering unem- ployment and companies steadily on the brink of closure, you’d think the bankruptcy courts would be blistered by now. Nope. National numbers tell the same story. Records show 2020 bankruptcy filings were the lowest in 35 years, according to legal ser- vices firm Epiq. That number was 529,068 bank- ruptcy filings in 2020. The only segment increasing year-to-year is the commercial Chapter 11 bankruptcy, which was up 29% in 2020, most notably filed by retailer J.C. Penney Co. Inc. and car rental company The Hertz Corp. The recipe for that spike seems to be distressed companies unprepared when revenues were zapped. But all in all, the bankruptcy trend has come as a surprise. New Generation Research CEO James Ham- mond told Forbes last summer, “I’m pretty confi- dent we will see more bankruptcies than in any businessperson’s lifetime.” Conventional wisdom would have agreed. But unconventional federal funding came into play. Underpinning this bankruptcy environment is $5 trillion dispersed by the U.S. government. “The federal backstop proved a vital lifeline for the stabilization of corporations to protect the U.S. economy,” said Deirdre O’Connor, managing director of corporate restructuring at Epiq, in the news release detailing the 35-year low numbers. Seems all the federal economic stimulus mon- ey has held off bankruptcy filings at a time when we’d expect there to be a rise. However, a bankruptcy backflow is growing, and the analysts at Epiq expect the bubble to burst later this year. Bankruptcy courts should be prepared for a surge. But we’ve heard that before. Springfield Business Journal Editorial Director Eric Olson can be reached at eolson@sbj.net. Send letters and comments to sbj@sbj.net EYES & EARS Eric Olson BUSINESS FULL CIRCLE Donnie Brawner In a difficult year, lower bankruptcy filings are an unexpected positive result.