In today’s episode of The Small Business Show, we’re joined by Bill Canady–author of the new book From Panic to Profit, leadership expert, CEO of Arrowhead Engineered Products (AEP) and Chairman of OTC Industrial Technologies– to discuss how leaders can stay focused and make strategic decisions amid the uncertainty caused by tariffs, inflation, and global supply chain disruptions.
Focus on what you can control
Canady emphasizes that the most effective leaders focus on what is directly within their control during uncertain times. Rather than panicking or being swept up in speculation, he encourages leaders to channel their energy into four key areas:
- Customer satisfaction
- Supplier partnerships
- Employee stability
- Communication
Focusing on these core business pillars allows businesses to remain steady even when things feel unpredictable.
Inventory strategy amid tariffs
One of the most pressing concerns for business owners is managing inventory in light of rising tariffs. Canady warns against reactionary behavior like stockpiling inventory in anticipation of cost increases. Instead, he urges business owners to develop a data-driven understanding of their inventory trends to create a strong product strategy.
He explains that tariffs currently range between 10% and 20%, which can significantly impact profitability, especially for businesses with tighter margins.
At Arrowhead Engineered Products, Canady and his team opted to negotiate a cost-sharing agreement with their suppliers. Since AEP doesn’t have the profit margin to absorb a 20% tariff, they’ve decided to pass the costs on to the consumer. Additionally, they’ve halted all orders from China and Southeast Asia, anticipating that U.S.-China trade tensions won’t be resolved quickly. Their current inventory levels are stable, and they have roughly 60 to 90 days’ worth of their top 250 products, providing enough buffer to observe how the situation unfolds and respond thoughtfully.
Canady notes that competitors who’ve kept prices steady are rapidly depleting their inventory. When they go to restock, they’ll likely face a far steeper cost, potentially up to 175% more due to tariffs.
To avoid this trap, he advises passing costs on to consumers even if it temporarily slows business, but maintains stability.
The four-step CEO framework to establish control in chaos
In From Panic to Profit, Canady outlines a framework designed to help leaders successfully gain control and steer their teams to success. It focuses on establishing command and control within the first 100 days and creating long-term stabilization within three years.
Set the goal
Define a clear goal and identify how success will be measured. Gather input from the board, investors, and leadership team to align the organization around a shared vision.
Build strategy
Determine the strategy to help achieve the goal and allow the team to execute it. Canady stresses the importance of enabling the team to build the plan to earn their buy-in and motivate them.
Shift the organization
Reallocate people, processes, and capital toward the areas with the highest opportunity. This may mean changing how teams are structured or which projects receive investment.
Get the job done
Execute the strategy with consistency and discipline. Hold teams accountable and follow through because success is earned in the execution.
“You don’t need a perfect plan, you need a team focused on a couple of things.” – Bill Canady
