While many companies are facing closure or significant downsizing, I can share that all my regular clients are GROWING during this terrible Coronavirus time.
“Why?” You might ask. “That’s just lucky”, you might also say. I can tell you it’s not dumb luck, and I’ll show you why in a minute.
In one of my prior blogs I talked about business models that are pandemic resistant. As you might expect, these growing companies each have pandemic resistant models as a main source of revenue. But there’s something that each of these companies does well in addition to choosing a terrific business model. They’ve created their luck with:
The Top 3 Things to Know When Pivoting Your Business:
State the problem to be solved
Get in motion now
Pivot now, before you’re tempted to perfect your response
I’m reminded of what a great pivot is by the famous Jack Welch quote.
When the rate of change on the outside exceeds the rate of change on the inside, the end is near. – Jack Welch
Though Mr. Welch passed on before the Coronavirus, he very well could have been thinking about our current Coronavirus situation when he said it.
Companies that will not survive are likely are having internal discussions sounding something like this:
Rate of change on the outside. “Hmm, rate of change on the outside, that must certainly mean the current pandemic. But when everything goes back to normal, will it really have changed that much?”
Rate of change on the inside. “Oh, I’m ready to change. As soon as I know the right path, I’m going to go for it. I promise you I will.” In another words, when I know the perfect pivot to make, I will commit to starting to act. If I don’t know the right pivot, I will not act.
The first issue here is that these business leaders have not stated a clear problem, so how do they know a good pivot when they see it? Without knowing the problem they’re solving, they won’t see any pivot as the right one. In fact, even after stating the problem, most successful leaders seldom make the perfect pivot. Getting into motion now, they make the best pivot they can with the best information they have at the moment.
Here’s an example from a client company:
Problem. “My employees don’t have the virus protection they need to perform their jobs.”
Get in Motion. “I must provide an ample supply of masks and gloves to my employees. They deserve to be protected.”
Using their procurement expertise, the company secured a supplier able to provide many more masks and gloves than their employees could ever reasonably use.
Pivot Now. “Ok, how do I serve the situation with the masks and gloves that I can purchase? The answer is, “Use my supply chain capabilities to provide these at a fair price to the public through our online partners, such as Amazon. ”
In addition to being a generally good place to work, by having an ample supply of masks and gloves the company has been able to attract workers at a time when many are afraid to leave their homes! And the very modest profits made from the sale of the masks and gloves pay for all of the employee protection! I’d say that the rate of change on the inside is exceeding the rate of the change on the outside at this company!
Last point, this client company has built a culture accepting and leading change, so the need for a pivot is expected, not treated as an exception within their culture.
The leader who earlier in this article said “But when everything goes back to normal, will it really have changed that much?” has not prepared their team for change, any change really. On the contrary, they taught their employees if they wait long enough, things will go back to normal.
My successful clients have seldom waited for an opportunity to come to them. They are active making changes in their businesses every day. Their employees expect change, and as a result, this pivot for the Coronavirus also feels easier to manage.
What problems have you clearly articulated in your business?
Are the pivots happening now?
Is the rate of change on the inside exceeding the rate of change on the outside?
Please be safe and healthy. Also, please share how you’re doing with the changes around us and comment on this article.
Have you seen the video of Madonna sitting in a bath with rose petals, talking about how the Coronavirus is the “great equalizer”?
Broadcasting from that luxurious, pampered scene, the Coronavirus seems to be many things, but the great equalizer isn’t one of them.
Madonna may mean we all have the same chance of dying from the virus, rich or poor, healthy or unhealthy, tattooed Rockstar or middle-aged married guy living in coastal Florida. Although I reject that thinking for reasons that I won’t get into here, I do agree the Coronavirus is the great equalizer; however, for quite a different reason than Madonna is likely thinking.
The great equalizer comment does apply to your business right now because much of what we know about business will likely be significantly challenged post-Coronavirus.
Successful business people like me and you know how to strategize, plan and execute, both in times of prosperity and economic downturn. We compare each new opportunity to one that we’ve seen or experienced before. Successful business leaders will also, in fact, be hampered by confirmation bias.
Confirmation bias is the unintentional tendency to process information that is consistent with one’s existing beliefs, especially when the issue is highly important or emotionally charged. So even though there is no precedent for the Coronavirus impact, the temptation is great to equate it to something similar in your past experience. And, when you and I make it similar to another event, we may miss something big in the solution we create. Inexperienced business leaders aren’t usually encumbered by this bias since they don’t have the depth of experience to draw from.
Summing it up, leaders with significant amounts of business experience and leaders with little business experience know approximately the same about what a Post-Coronavirus world will look like. This is the great equalizer that I see in business right now.
We can use the great equalizer to our advantage. Experienced business professionals, we could for at least a few moments, put aside what we know about business in order to determine the best path for our business. It is time to approach the problem with a beginner’s mind, listen to inexperienced business leadership voices on Zoom and use this input constructively.
I’m interested in your thoughts about this great equalizer topic! What do you see when you think about our Post-Coronavirus world with a beginner’s mind?
In our consulting business practice, we work with many successful, entrepreneurial business owners and also long-term employees who acquire equity in the business and seek to grow into a senior leadership role.
A foundational element of our coaching is that one essential mind shift is necessary to move from employee to owner. As luck would have it, this is also an essential skill to exercise in your business to ensure that it survives the COVID-19 crisis, and best illustrated in a story.
Much earlier in my career, I was a mid-level manager at a fine china manufacturing company, a company that took pride in the fact that it provided china service for the White House for over a hundred years. The company had a sound distribution model with excellent relationships in the retail space. The corporate owner of this fine china company, full of artisans including painters, silversmiths and porcelain designers, demanded that profitability improve year over year. What could the management team do, none of whom were owners, to increasing profitability? Well, they did what many employees do in their roles. They made the best decision they could and “hoped” there weren’t any problems. In this case, the decision was to expand from two outlet stores to over one hundred, thereby increasing sales tremendously! A brilliant plan, right? Brilliant except for one thing, no one on the team that came up with this idea thought like an owner.
What do I mean “think like an owner?” Through my experience working with successful owners of many companies, plus, owning and leading a company myself, an owner asks: “What could go wrong?” and intentionally and persistently looks for problems inside their own business. While employees are “hoping” something works so they don’t get into trouble, owners are looking for trouble, heck they’re inviting trouble into their day by looking for problems. And after these problems are uncovered, then and only then can they be resolved.
Back to the fine china company. The outlet plan was a huge success for a few years. Until…problems began – the demand at the outlets outpaced production at the factory. Inferior goods were brought in to cover the supply shortfall, customers started returning more of their purchases because they didn’t match the 1st quality china they had at home. The brand reputation was tarnished. Ten years of this cycle put the company in a very bad place and the corporate parent sold this once proud fine china company at a loss.
I’ve thought about this decline many times over the years. Had there been even one leader in a position of influence who thought like an owner, could this fine china company still be impressing us with its American handcrafted products?
So how does this apply to the business environment now around COVID-19?
I hear some people in companies talking like employees, saying things like…”When things come back” or “When we are back to normal.” These are two statements firmly anchored in hope, but not anchored in an owner approach of looking for problems. Owners looking for problems are asking questions including:
“What may never be the same about my business?”
“What if key employees that I’ve furloughed don’t come back?”
“What if key customers don’t come back?”
“What if my line of credit from the bank is withdrawn?”
“What are all of the expenses that I can cut now?”
“What could go wrong after social distancing ends?”
How have you talked about your business today? Did your remarks come from an owner or employee perspective?
Thanks for reading this article and please share your thoughts with me in the comments.
In 2005, a powerful and surprising hurricane stuck us in South Florida. Power was out, roads were blocked, and employees were displaced. Responsible for the operations of a contact lens distribution company, I thought we had an adequate business continuity plan, but after an unthinkable ten days without power, that plan was tossed aside. We had built our plan around “reasonable” risks. This hurricane was anything but “reasonable”.
Today, you and I have stepped into the next unthinkable disaster. Business continuity plans built on “reasonable” assumptions have once again been tossed aside as irrelevant. If business continuity plans aren’t working, how can you plan for the next unthinkable disaster?
Maybe it’s not about the perfect business continuity plan, maybe it’s about consciously building your company to be disaster resistant.
So what are disaster resistant models? I don’t pretend to have all the answers to this important question, but I can share three business models that companies who successfully weathered Hurricane Wilma in 2005 and are now successfully surviving and even growing during this pandemic have in common.
After reading these, I would urge you to consider how these might apply to your business. Why? Because these models will support you, your business and your employees to remain whole during the next unthinkable disaster. Also, they will contribute to the overall value of your company even in times of calm and prosperity. In short, a true win-win in business.
Ok, here are three business models many companies growing in this pandemic have in common:
They have an E-commerce Business Not Fulfilled by Amazon
Their Management and Support Employees Already Regularly Work Virtually
They Operate in a Regulated Industry
As you might have guessed, E-commerce businesses, those without retail locations, are faring pretty well during this pandemic.
What you might not know is that thousands of E-commerce businesses have been forced out of the market when the ‘Fulfilled by Amazon’ (FBA) program shifted its focus to essential products only. FBA customers, those who let Amazon be their sole fulfillment partner, are scrambling to recover. While businesses that invested in their own warehousing and fulfillment capabilities are still able to meet all of their customer demands. In fact, businesses with fulfillment capabilities are now adding those customers that FBA can’t or won’t service. You having an E-commerce Business Not Fulfilled by Amazon is a critical differentiator for your company in this market.
In the past few weeks, we’ve all been in meetings with Zoom virgins. It’s clearly their first time on video. And when they’ve incorrectly muted themselves, you can hear them mutter they can’t wait until they get back into the office.
It may be hard to believe, but there are management teams out there not missing a beat in their communication. They know how to use chat, the breakout rooms, how to raise their hand… all of the Zoom features that enhance productivity.
They have this level of expertise because they’re practiced in remote video communication. Instead of joining from their kitchen table with a thirty-year-old green refrigerator in the background, they have a place already set up in their home to communicate.
In addition, these virtual management teams have a real time app active during business hours so they can instantaneously communicate with each other. Please consider how your management and support teams will maintain their virtual work skills after the pandemic.
Highly regulated businesses such as pharmaceuticals, medical devices, and alcohol tend to grow and decline in a way that doesn’t match the overall economy. The drivers in these businesses are hard timelines or “essential” life purchases. For instance, pharmaceutical drug discovery is done with an urgency not often seen from outside the business. While a drug is being commercialized, a day delay directly transfers to a day of missed sales in the market. As a result, companies providing services to companies engaged in pharmaceutical discovery and commercialization will seldom see a break in the urgency for any disaster or economic downturn.
This is one example of Operating in a Regulated Industry business model. How could this work for your company?
How is your company disaster resistant? I’m interested in your thoughts and experiences. Would love to hear from you, please comment or share. Wishing you safety and health.
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