Fail or scale: How startups can respond to crisis and grow stronger

We work with founders navigating some of the most uncertain, high-stakes moments of their business journey.

Whether you're scaling fast or bracing for impact, one thing is clear: pressure reveals what’s working and what’s not.

In our recent Fail or Scale webinar, business growth advisor and expert with over 25 years experience, **Hugh Gyton **unpacked the four foundations that separate resilient startups from the rest.

Here we’ll break down each with practical insights, examples, and tools you can start using today.

Foundation 1: Cash

When things go sideways in your business, the first thing to check isn’t your product or your team, it’s your cash. Because no matter how great everything else is, if you can’t pay your team or cover your bills, it’s game over.

As Hugh Gyton put it: growth eats cash. That’s true whether you’re scaling fast or weathering a downturn.

COVID proved that even healthy businesses can be caught off guard when cash flow dries up. And don’t be fooled by profit on paper; if money isn’t actually hitting your bank account fast enough, you’re still at risk.

How to measure your cash flow

A simple way to get a handle on cash that Hugh recommends is to look at your Cash Conversion Cycle.

This measures how long it takes to turn interest into income – starting from that first chat with a potential customer, through to delivery, and finally to getting paid.

Here’s the breakdown:

• Sales cycle: How long does it take to turn a lead into a paying customer?
• Delivery cycle: How long does it take to deliver what you’ve promised?
• Billing cycle: How long before the money actually lands in your account?

The longer this cycle is, the more cash you need to keep things running. The shorter it is, the more cash you unlock to invest in growth, like hiring, marketing, or product development.

How to improve your cash flow

Hugh recommends a powerful concept from the Scaling Up framework called The Power of One.

This idea is about the importance of small changes. How 1% or even 1-day shifts in key areas can make a big difference to your cash position.

Here are the seven levers to play with:

• 1. Price – Can you increase what you charge, even slightly?
• 2. Volume – Can you sell more of what you already offer?
• 3. Direct Costs – Can you reduce what it costs to make or deliver your product?
• 4. Operating Costs – Can you trim business expenses (e.g. software, admin, rent)?
• 5. Accounts Receivable – Can you get paid faster by customers?
• 6. Inventory / WIP – Can you hold less stock or finish projects quicker?
• 7. Accounts Payable – Can you delay supplier payments (without damaging trust)?

Even tiny changes to one or two of these can give you more breathing room.

For instance, during COVID, many businesses shifted from 90-day plans to 30-day (or even 7-day) plans, reviewing their numbers weekly just to stay ahead.

To evidence this, Hugh remembers buying a sofa. He had to pay 50% upfront and the rest a week before delivery. That meant the business got all the money before it even delivered the product.

Dell did the same thing back in the '90s, getting paid 21 days before building a computer. It’s one of the big reasons they were able to grow so quickly without running out of cash.

How to protect your business with cash flow

If you can, aim to build a cash buffer. One that’s enough to keep the lights on for 6 to 12 months.

It’s not always easy, but it’s a goal worth working towards.

Steve Jobs once said he wanted Apple to always have a year of cash on hand in case of an emergency. That mindset helped them ride out unexpected shocks like COVID.

Startups don’t always have Apple’s balance sheet, but the principle holds. Build your buffer when times are good, so you’re not scrambling when things get tight.

Foundation 2: People

When the pressure’s on, it’s not your product or your pitch deck that gets you through, it’s your people. That includes your team, your customers, your suppliers, and yes, you as the founder.

Startups live and die by the energy and resilience of the humans behind the scenes. So when things get uncertain, it’s time to take a close look at your people.

How to assess your talent

One of the toughest (but most useful) questions you should ask is: “Knowing what you know now, would you rehire everyone on your team?”

You don’t have to be ruthless, but you should be realistic. Your business may have changed. The market may have shifted. And you need the right people on board for this stage, not just the one you started with.

To help, Hugh recommends a tool called the Talent Assessment Chart, from *Topgrading *by Bradford D. Smart. It maps team members across two axes:

• Values – Are they showing up in line with your culture and what you stand for?
• Performance – Are they delivering real results?

This gives you a quick way to spot:

• A-Players: They smash it on both values and performance. Keep and reward them.
• B-Players: They align with your values but need mentoring to level up.
• C-Players: They’re off-track in attitude, delivery, or both. Something needs to change.

With this determined, you can invest in your B-players, protect your A-players, and make the hard calls on your C-players before they become a bigger problem.

If you find this too difficult, or personally challenging, a less rigorous tool is the Mission to Mars exercise.

In this, imagine Martians want to learn about your company, and you can only send five people to represent who you are. It’s your job to decide:

• Who would you send?
• Why those people?
• What do they represent about your company’s culture and performance?

This is a great way to spot who your true role models are, and whether you’re building a team you’d be proud to scale with.

How to engage your team

Great teams fall apart quietly when stress builds up and communication breaks down. So Hugh suggests founders regularly check in with one key question: Are your people (and you) happy and energised?

That means your employees, customers, suppliers – and you, too.

• Is someone burning out?
• Is a once-great supplier dropping the ball?
• Are you personally running out of steam?

Spotting this early gives you a chance to fix it, before it turns into churn or chaos.

A big part of this is keeping your communication tight. Hugh suggests building simple rhythms into your team:

• Daily huddles (10–15 mins): What did I get done? What’s next? Where am I stuck?
• Weekly team meetings: Share wins, surface roadblocks, and align priorities.
• Monthly or quarterly reviews: Step back, reflect, and reset the big picture.

Worried that’s too many meetings? If done right, these actually save time by reducing confusion and dropped priorities.

To keep it all on track, tools like Metronome or Align can help your team set goals, assign ownership, and track progress, without needing to be in the same room (or timezone).

How to build the right culture

Culture is what people do when no one’s watching. When things get hard, culture shows up in the little things:

• Who speaks up when it’s uncomfortable?
• Who sticks to your values, even under pressure?
• Who quietly steps back when the going gets tough?

Your values shouldn’t be stuck on a wall and that’s that. They should guide who you hire, who you promote, and how your team behaves day to day. Otherwise, why have you got them?

Finally, don’t skip wellbeing. Good mental health is foundational to running a strong functional team. Pay attention to how your team’s doing. Ask them. Observe how they respond, and give them support where its needed.

A little flexibility, care, and kindness can go a long way in keeping your people (and your business) strong.

Foundation 3: Strategy

Hugh shares that, true strategic advantage comes from being different, not just better. Your job is to run your own race that your competitors can’t copy.

This is your strategy – choosing who you serve, how you solve their problem, and how you do it uniquely you.

Are you unique?

Michael Porter, one of the world’s top strategy thinkers, put it simply: compete to be different.

Most businesses compete on the same things: faster shipping, cheaper prices, more features. The problem with this is that everyone ends up looking the same and margins shrink.

To keep your business strategic in its decisions, come back to these two questions:

• What makes us truly different?
• Is that difference meaningful to our ideal customer?

For example:

• Don’t just deliver fast. Be the only courier that uses zero-waste packaging.
• Don’t build just another SaaS platform. Build one that solves a very specific problem for a niche market no one else is serving.

When your strategy is focused and hard to copy, you become memorable and defensible.

Are you innovative?

Crises force creativity. When the old way breaks, startups get into the scrapyard to force a new solution, and that’s often where the magic happens.

Hugh recollects a few real examples from during COVID:

• Retailers rolled out grab-and-go formats when foot traffic disappeared.
• Co-op supermarkets in the UK used delivery robots during lockdowns.
• Restaurants launched meal kits and online cooking classes to keep serving customers.

These weren’t long-term plans that had spent years in the making – they were quick, clever pivots born from necessity. Many ended up sticking because they worked better than the original approach.

So to check your levels of innovation, ask: What’s something we’ve never tried before, but could make a huge difference?

You don’t need a 30-page strategy doc. You need a smart decision that helps you do one thing better, faster, or differently than the rest.

Are you purposeful?

In tough times, people don’t just want a plan, they want a reason to care. That’s where purpose raises its head.

Purpose is your “why”, the reason you exist beyond making money. When your team and customers believe in it, they’ll stick with you through challenges.

Carolyn Tate’s The Purpose Project breaks it down into four types:

• Service to others: “We help teachers bring joy to the classroom.”
• Search for truth: “We uncover medical insights through AI.”
• Pursuit of excellence: “We design furniture that lifts your mood.”
• Change the world: “We make clean water accessible to all.”

If you’re not sure what your purpose is? Try the Purpose Ladder.

This tool has you start with: “What do we do?” Then follow that with: “Why does that matter?” And keep asking “Why?” until you hit something real. For example:

• We sell accounting software.
• Why? So businesses can manage money.
• Why? So they feel in control.
• Why? Because when they feel confident, they’re more likely to succeed.

Purpose: We help small businesses feel confident and capable so they can be successful.

That’s far more inspiring than “we sell software.”

Are you clear?

If your team can’t explain your strategy in one or two sentences, it’s probably too complicated.

Hugh recommends using the One-Page Strategic Plan from Scaling Up. It helps make your strategy visible, simple, and shareable. It includes:

• Your core purpose and values
• Your ideal customer
• Your unique edge
• Your 1-year, 3-year, and long-term goals
• Your top priorities right now

When your strategy and purpose is clear, it gives you permission to:

• Say no to customers who aren’t a good fit.
• Say yes to the right opportunities.

This lets you align your team and resources in one direction. Strategy shouldn’t live in a slide deck, it should live in your people’s heads.

Foundation 4: Execution

A bold vision is exciting. A smart strategy is promising. But if you can’t execute, none of it matters.

Execution is where the rubber hits the road. It’s how your startup turns ideas into impact, through the daily rhythm of getting the right things done, by the right people, in the right order.

How to turn strategy into action

Execution is how you get things done – reliably, repeatably, and in the right order. It’s how you:

• Launch that new product
• Deliver on your promises to customers
• Improve your operations
• Grow your business, one step at a time

At its core, execution depends on five things:

• 1. Clear priorities – Everyone knows what matters most
• 2. Defined responsibilities – Everyone knows who owns what
• 3. Repeatable processes – You’re not reinventing the wheel every time
• 4. Measurable progress – You know whether things are working
• 5. Fast course corrections – When something breaks, you fix it fast

It sounds simple, but most startups stumble here.

This is because early success is often built on hustle, improvisation, and speed. But what works at the start can create chaos later.

Without proper execution, you’ll see:

• Teams working hard, but not on the right things
• Great strategies collecting dust
• Projects dragging on with no clear outcomes

That’s how startups stall, and this is even more likely in times of crisis.

How to diagnose the root problem

Sometimes what looks like an execution issue is actually something deeper. Hugh challenged founders to pause and question: “What’s the real problem here?”

Some examples of this::

• If your strategy feels off, maybe you’ve got a people problem, you’re missing strategic thinkers.
• If the team’s not delivering, it could be a cash problem, you can’t afford the talent you need.
• If your operations are messy, the real issue might be lack of focus in your strategy.

So before rushing in to fix symptoms, dig for the root cause.

How to decide what to do next

Execution is doing the right things clearly and consistently. Hugh quotes Stephen Covey’s famous line:

“The main thing is to keep the main thing the main thing.”

In practice, that means every team member should be able to answer:

• What’s our number one priority right now?
• Why does it matter?
• How will we know if we’re making progress?

Startups often fall into idea overload. There’s always a new opportunity, a new feature, a new shiny object.

But too many “priorities” means nothing actually gets prioritised.

Instead, pick one. Make it the focus. Talk about it daily. Celebrate progress toward it. And measure it visibly so everyone stays aligned.

This doesn’t have to be your goal forever. In startups, conditions change fast. A 12-month plan might be obsolete in 2 weeks.

That’s why Hugh recommends shrinking your planning horizon. Ditch the 90-day cycles and try 30-day or even 7-day sprints.

In each cycle, you can lay out:

• What’s the one thing we must get right this week?
• What’s the fastest path to real progress?
• What can we measure quickly and easily?

This doesn’t mean you abandon the long-term vision, far from it. It just means you break it into manageable chunks and build momentum through quick, focused wins.

Short-term clarity reduces the overwhelm for you and your team. It also creates space for regular reflection and course correction, so you can stay nimble.

How to know your executing well

Good execution is visible. Everyone should know what success looks like and how their work contributes. That means giving each team member 1–2 specific, measurable metrics they own.

For example, a sales rep might be responsible for:

• Number of outreach calls per week
• Conversion rate from lead to deal

A product designer might track:

• Number of prototypes completed
• User feedback scores from testing

These goals should be specific, actionable and measurable. For instance:

• “Boost NPS from 35 to 50 by next month.”
• “Deliver 3 tested prototypes by Friday.”

When goals are clear and trackable, people stay motivated and focused. When they’re messy, teams either burn out trying to please everyone or drift with no direction.

One example Hugh shares is a manufacturing company, who literally mapped out every step of its process on a wall. It showed:

• Who owned each step
• What needed to happen
• How success would be measured

This level of visibility helped the team work faster, fix problems quickly, and stay accountable.

If your team is remote or hybrid, use tools like:

• Trello, ClickUp, or Asana – For task management
• Notion or Google Sheets – For tracking key metrics
• Miro or Figma – For collaboration and mapping workflows

The platform doesn’t matter as much as the principle: Make work visible. Make success obvious.

How to make your team accountable

Let’s talk about the “A” word: accountability.

Many founders avoid it because they fear coming off as controlling or causing conflict. But accountability isn’t all in on blaming your team, it’s about clear direction, ownership, and support.

Great execution cultures are built on trust. Hugh suggests using regular, honest check-ins with simple questions:

• What’s working?
• Where are you stuck?
• What do you need from me?

These kinds of conversations turn performance reviews into problem-solving moments. People speak up earlier. They ask for help. They feel safe to take risks, and that’s where growth happens.

Accountability also means setting clear expectations:

• What are you responsible for?
• What support is available?
• What happens if things go off track?
• Are those expectations consistent across the team?

When expectations are clear and fair, performance naturally improves.

But, if you really want a team that executes well, you have to model it first. That means being:

• Disciplined – not just inspired
• Consistent – even when things get hard
• Coachable – willing to learn and adapt
• Tool-savvy – using systems to stay aligned and efficient

Your role as founder or CEO isn’t just to set the vision. It’s to clear the path so your team can follow through. So ask yourself the tough questions:

• Have I defined what matters most?
• Am I helping people stay focused and unblocked?
• Am I showing up consistently with follow-through?

Your team watches what you do, not just what you say. So getting it right is key to turning your strategy into action.

Final thoughts

As Hugh puts it: “Yes, we’re in a volcano. But volcanic soil is the richest in the world. That’s why people build lives near lava.”

This moment might feel dangerous, but it’s also uniquely fertile. For startups and scaleups that can master their cash, their people, their strategy, and their execution, it’s a chance not just to survive, but to grow stronger than ever.

So the question is no longer whether you’ll face another crisis. It’s whether you’ll be ready to scale through it.