David McKinnon on being up against it

David McKinnon

David McKinnon, co-founder, chairman and CEO, Service Brands International

Let’s start this column out with my definition of adversity in business: A situation where if not dealt with correctly, significant negative results will occur, including in some severe cases the possibility of the ultimate death of the business.

Every business leader in the world has to deal with adversity at some point in the lifecycle of the business. Adversity automatically comes with the territory of business leadership/ownership and comes in many shapes, sizes and forms.

Early in my career, I experienced two severe and simultaneous doses of adversity. Reflecting on those challenges, I believe that there are four necessary ingredients for successfully getting through it.

Determination

An absolute and resolute personal commitment to get through the stacked odds for failure is mandated and required to even have a chance of overcoming this obstacle.

Confidence

Your hand must be steady and your demeanor, calm and confident. This is necessary as you must project this to employees, customers, bankers and all who intersect with your leadership during this crucial time.

I love the example of the flight attendant who with a smile, simply asks the next row “Anything to drink for you?” after the plane has just hit a big bump. Everyone who is scared is now watching that flight attendant’s reaction with heightened interest, so he or she can gauge his or her own reaction. When the passengers see the smile and hear, “Anything to drink for you?” they know that it must be no big deal. That’s what leaders have to do in times of adversity.

Optimism

You must be able to talk positively about a future that does not include the adversity. This helps others also believe that the adversity has a beginning and an end. It creates a more optimistic view of the future, and more importantly, it doesn’t let the adversity define you or the company.

Faith

Without my faith, I would have never been able to mentally and physically survive two crises, which threatened the end of our business.

In the fall of 1989, it seemed that Molly Maid was doomed to fail.

First, Molly Maid was sued in a class-action lawsuit for tens of millions of dollars by a few of the franchisees.

Secondly, we had partnered with a large and well-financed company with intentions to significantly grow Molly Maid. As a result of the lawsuit, they suddenly decided to remove their financial backing, which put Molly Maid into immediate, virtual bankruptcy.

The lawsuit was going to be very expensive to defend and without financial support, the prospect for our survival was bleak at best. Many of my advisers suggested that I bury the company and get on with a new track.

I instead chose to tackle the adversity head on. I put together a 14-step business plan with measurable milestones. When implemented, this plan would take Molly Maid from having a lawsuit to defend and no money to a place with no lawsuit and dollars in the bank to pay creditors and “keep the lights on.”

I shared our turnaround plan and our incremental results, however small, against that plan with everyone — our franchise owners, our creditors, our landlord, our bankers and potential investors. We even had a large creditor to which we owed over $50,000, to whom we sent a $50 check to each month along with our bank statements and financials. This turned out to be crucial, as our “supporters” loved the transparency.

In 2011, Molly Maid franchise owners had double-digit top line growth over 2010 in what many say is an adverse business climate. In fact, since our 1989 adversity, our business has had significant growth in all but 2 years.

Anything to drink for you?

David McKinnon is the co-founder, chairman and CEO of Ann Arbor, Mich.-based Service Brands International, an umbrella organization that oversees home services brands including Molly Maid, Mr. Handyman, 1-800-DryClean and ProTect Painters. For more information, visit www.servicebrands.com.

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