What’s the future of my business
Many of our customers are struggling with this question. They are almost overwhelmed by short term actions to cut costs and make sure that people remain safe and connected. What will be our revenue in next few months? Which costs can we cut accordingly? How do we keep our employees motivated? We are running from meeting to meeting and deciding quickly 100s of such questions. We feel the action. It vibrates us. We are doing a great job!
Eu, no … not exactly. You are doing an-OK job dear manager, but not great. What if your competitor outsmarts you by not only surviving, but also creating and preparing a long-term vision as well? Which strategic advantage will they have over you once the crisis is resolved?
What if you not only guide your employees through a short-term survival, but also give them a long-term inspiration? Will your employees not be more motivated, especially if you launch your first tangible initiatives already?
Many executives are wondering how they can combine both priorities. Here is a playbook.
1. Take the pressure off
You need to decide first how to keep your company alive. Take a critical look at all your costs and reduce where not absolutely needed. Take health related measures so that your employees, suppliers and customers can continue in safety. Adapt your ways of working to the present situation.
Preserving the present and ensuring both operational and financial solvency is your first priority during this unprecedented crisis. However, it is not your only priority (anymore). While deciding fast here, it helps both taking pressure off the company and the management team. That reduced pressure should make another priority clear. What is our long-term vision and strategy, after this crisis?
2. Create your long-term Vision and Strategy
Once, and that cannot take too long, the pressure is somewhat down, any management team should shift it’s mental focus also to long-term vision and strategy. But how can I create a vision if I don’t know when or how the new normal will look like? You can in a McKinsey-alike way, create 12 different scenario’s, analyze the impact of macro-economic trends on each of them and run a regression analysis on all your datasets. Or you work with 2 key scenario’s which is an ideal compromise between being-future-prepared and what is manageable today.
· Scenario a) fast recovery: you assume that economy will recover soon (e.g. 3 to 4 months). In this scenario, you define how your environment will look like. Very likely, most of your competitors are still the same after the crisis, although a few may have gone bankrupt. Most of your customers will likely still buy from you in the same way. Your internal way of working may not change a lot. After all, people did not experience a new way of living long enough to have a profound impact. But there will be changes. Define those and strategic role of your company in that new normal.
· Scenario b) slow recovery: the economy will take a long time to recover (at least 12 to 15 months). You define again your environment because this will be a totally different new normal. You will face much less of your current competitors, but have totally new ones from other area’s suddenly. Which new solutions have your customers found to solve their jobs-to-be-done? How do we position our company in that new environment? Who do I serve and what will be my product & service offering? This will have a deep impact in ways that most of us cannot imagine yet. Place your big-picture-thinkers on the foreground here and listen to them, cause likely, they will predict better than anybody else what will happen.
3. Link both future scenario’s with today
Now it’s time to link your future scenario’s to the situation of today and decide which initiatives you will launch to prepare those scenario’s. All this of course on top of the actions already running to ensure your solvency.
Most of our customers find out that there is quite some overlap in needed initiatives for both scenario’s. Often only the future impact will be significantly different. Initiatives that are needed for both scenario’s are a no-brainer and launch those immediately.
It remains a dynamic world. The longer the recovery lasts, the more weight you need to give to those initiatives preparing for a slow recovery. Also, you believe you may have created the best vision and strategy for your company. But every company has a plan until they get punched in the mouth. So make sure that you update continuously where needed your vision and strategy based on your learning's.
These are difficult times, no doubt. But following this playbook will give you a competitive advantage so that you do not only survive this crisis, but also thrive afterwards. After all, your employees, customers and investors want financially healthy companies to focus on survival and liquidity and invest for the future to create long-term advantage.