By Bernie Dixon
You’ve made the tough decisions already on how to reduce your cash burn, cut costs and preserve whatever you can in your business. Whether you have shuttered your business to survive the Coronavirus or you have simply shifted to online delivery, we are all beginning to think about an emergence strategy. How do we get back to growing our businesses when we emerge from this crisis?
Let’s look at an emergence strategy in two parts.
Part 1: Trends driving business change and adaption
Part 2: Piloting reinvention in your company.
Trends Driving Business Change and Adaption
Today I’ll address the underlying trends and shifts due to reactions to the pandemic. Being realistic in your viewing of the current environment is key to revamping and reinventing your business. Ignoring the major shifts will create a blind spot that jeopardizes your success. Now is the time to adapt your business to the new environment. I’ll refer to Darwin’s theory once again: “It is not the strongest of the species nor the most intelligent that survives. It is the one most adaptable to change.” Consider the following trends and shifts in business.
Supply chains have taken a hit. There are missing links in supply chains. Global sourcing is perilous and full of interruptions. Priorities have shifted to health essentials and necessary staples. We can no longer rely on the predictability of our traditional supply chains. Suddenly reliability becomes a more important factor than price when evaluating supply options. How can you prove your reliability to your customers and potential customers? Can you demonstrate a higher level of reliability than your competitors?
Businesses have little cash on hand. Most business are continuing to cut costs and retain whatever cash they can for survival. Most industries have exercised layoffs or furloughs to cut labor related costs. Buying decisions are under extra scrutiny. Business travel, new hires, and new software purchases are the top categories of budget reductions. What are you doing to entice your customers to pay for your products and services right now? Can you extend payment terms instead of losing the sale? Have you considered including extra features, more training, customer support or extended warranties? What would draw your customers to want to make a payment right now?
Employees are anxious yet eager. Their own health and safety are paramount as they are eager to either get back to work or resume some normalcy in their work. Unemployment has spiked forcing many to pursue gig economy or other industry positions. The vast majority have retooled to operate fulling remotely and online. We can anticipate that labor rates are falling as we experience an unprecedented unemployment level. How will you ensure the safety of your teams and begin to ramp up sales simultaneously? What is your plan for staffing up as you scale while keeping costs to a minimum?
Consumer confidence is low except for staple products and services. Considering the uncertainty of the national economy and employment levels, consumers confidence has tanked. Purchases are focused primarily on staple products. A few consumers are opportunistic bargain hunters looking for deals. If you are a consumer-focused company, how are you adapting your products, services and support to increase consumer confidence? What will make your services more attractive to savvy consumers in a post crisis time?
Consumer habits have shifted to online-only channels. For the past few years, consumer purchasing research and analysis has been conducted via online channels and contributed to a growing buying on-line trend. The recent environment has forced consumers to completely extend other consumption habits to online channels: research, purchases, and delivery arrangements on-line. Entertainment habits have shifted almost entirely to online sources. Consumers are well beyond using self-service tools to change their passwords and have evolved with sophisticated skills and expectations for ease of use of icons. What are your best options and most cost-effective means to interact with your customers as their habits and expectations have morphed into a sophisticated online universe?
Now is the time to prepare your company with a post-crisis strategy and plan. Step one is understanding how your market and customer behaviors have changed and how those changes could impact your business. I want you to survive this crisis and be ready to emerge strongly. In part two of this series, I will offer suggestions on piloting reinvention within your company with a play-to-win attitude to fuel your success. You will want to step up thoughtfully with an emergence or reinvention strategy even with an unclear road ahead.
Minimize your costs, act confidently, view the trends in realistic terms and play to win.
Bernie P. Dixon is Founder and Chairman of Launchpad2X, a founder-to-CEO accelerator training program for women entrepreneurs. Find her on LinkedIn.