Updated: Nov 11, 2020
During difficult times we have a basic human impulse for survival. In this article I look at how this can sometimes have a negative impact on the decisions we make in business, and explore another approach for sustained survival.
We’ve all heard the term “fight or flight”. It is the basic survival mechanism built into the human brain to protect us from imminent danger. When we are threatened our instant reaction will be either fear or anger and we act accordingly.
When the threat of danger subsides, we have more time to think things through, we speculate over the other ways we could have dealt with the situation. Hindsight is a wonderful thing.
What I observed through my career in business is that during a difficult economic climate, such as the COVID pandemic, businesses often demonstrate a similar trait.
When our business experiences low demand, fewer sales, and escalating costs all under a shroud of uncertainty, we go through similar emotions.
I have noticed a common trend in how businesses approach this scenario. I wanted to share my thoughts on the top 3 approaches I have experienced:
Do nothing and wait for it to blow over
For many businesses, anchoring themselves in their comfort zone is the only way they can regain a sense of control.
Maintaining the status quo, running the business as they always have in the hope that they will weather the storm.
Though the most prudent approach. It is not sustainable in the long term, especially since there is no way of predicting how long the “storm” will last.
Market demands evolve by the day, so what may have worked well 10 years ago, may no longer work in today’s digital, fast paced marketplace. And whilst you are not adapting to the change, your competitors will be.
“The green reed which bends in the wind is stronger than the mighty oak which breaks in a storm.” Confucius
Knee jerk reactions
Another common trait are those that panic and start to look at ways to cut costs. Reducing the added value elements that differentiate them from their competitors. For example choosing cheaper packaging or materials. Or impersonal customer service either through automation or outsourcing.
In extreme cases, redundancies. Adding more pressure on core staff which impacts the quality and speed of delivering products or services.
Of course, there are times when unfortunately, drastic measures are the only option. But they should be carefully considered and never a quick fix solution to the problem.
Once again driven by a sense of panic especially when sales start to slow down. A common example of what I see today.
During Lockdown, the restrictions have put more focus on the demand for online presence. Businesses are feeling the pressure to have to keep up with this demand. This has resulted in a surge of investment in website design, online marketing, Social Media and advertising.
For those who are physically open and trading, there is a surge in activity to drive footfall. Resorting to heavy discounting and promotional activities. Whilst still maintaining an online presence, attempting to be everything to everyone.
All these initiatives are important for any business to invest in. BUT, they should be planned and form part of a more detailed strategic plan.
Running ad hoc promotions and discounting as a quick fix may seem like a good solution. Yet it only serves to drive profit margins down in the short term. And maintained over a long period of time, can nurture the behaviour not to buy until you have a discount or offer.
So what should we be doing to sustain our business through difficult times?
Don’t leave it to hindsight and wish you had done something differently. Take some time now to check your current position. Use the insight from your business data and your staff to identify areas for improvement. Assess the strengths that you have and the areas that need attention.
Do your research. Understand the evolving market trends and explore how you might adapt to them. What resources do you already have and what might you need to invest in?
To move forward, you must have a detailed picture of where you are and what you have to work with.
You have a wealth of knowledge at your fingertips. From free resources and training materials to videos and 'how to' guides.
Speak to similar businesses. Create a support network in which you can all share ideas, knowledge and lessons learnt.
Consult with an expert. There are thousands of consultants specialising in every aspect of business and personal development to choose from. Many offer free advice, training or reviews. Use their expertise to get an objective view of the situation. Be open to learning new techniques you may not have thought of before.
With all this information you are now able to make an informed plan. Define your key priorities and plan the activities that will deliver the best return on investment.
Set clear targets and KPI’s for each of the activities. Working towards realistic, achievable targets will help you and your team remain focused.
Examine your internal processes, explore new ways to gain efficiencies and improve productivity. This will not only save you time in the long term but will also cut your costs.
Rinse and repeat
“The only certainty in life is nothing is certain…”
This process should not be a one-off activity. It should become part of the DNA of how you manage your business.
Regular reviews of your progress will help you to be more agile and adapt to any new changes in the market. Go through this list once again in 3-6 months, and assess how far you have come, then re-prioritise, as necessary.
The best way to describe this approach is that it is a form of triage.
When you visit A&E, you are never given a bed and treated immediately by the consultant that specialises in your injury.
You go through a triage first. Your injury is assessed, you undergo some further tests and are prioritised accordingly. Only when all the information is ready does the doctor finally come and communicate his plan of treatment. Then there is a follow up to assess if the treatment has worked. Which may include more assessments and fine tuning of treatments as necessary.
If your business is going through the emotions that I have described above. Now is the time to consider a triage before you make any quick decisions.
Helping corporations and business owners work through difficult times is what I specialise in. I deliver practical solutions, operational efficiency, and profitable growth. And can provide you with the objective sound board you need to start putting your plans into action.