How can you make sure your business survives, or even thrives, during a crisis? Your first thought may be to retreat. Lay low. Minimize costs and staff. Alternatively, perhaps this provides the opportunity to look at things from a totally different perspective and change your business strategy.
Since the start of the pandemic, I’ve watched many CEOs take the standard approach of cost cutting. That’s not to say that cost cutting is not an option. It’s just not the only answer.
Consumers haven’t stopped their lives, they’ve changed them. Cutting your staff might help on paper, but to actually make progress, you have to cater to these new needs.
Old business plans weren’t created with a pandemic in mind. Your new one should. How are you positioned to leverage or mitigate the upcoming threats and opportunities? Are you looking outward at opportunity or trying to move numbers on a spreadsheet?
No sacred cows. Change products, processes and business strategy that no longer serve your customers.
Eighty-six percent of consumers changed their consumer habits because of the pandemic. As options changed and governments laid on restrictions, consumer needs shifted. The companies that identified these new needs and shifted to serve them are not just surviving. They’re thriving.
Restaurants shut? Start ordering meal kits. Plane tickets cancelled? Take a trip closer to home.
A great example of this was Airbnb’s repositioning. Having previously focused on finding the ideal international escape for users, they shifted the focus to local trips residents were allowed to make.
Can’t go to the office? Check out this long-term rural stay, said Airbnb. The same audience that had once planned on spending winter on the beach, was now desperate to stop working on their kitchen table.
They even came out with a new ‘feature’, the ‘Enhanced Cleaning’ badge. Although their valuation dropped in March and they were forced to cut staff, a change in strategy put them back in control, and they are now seeing an increase in consumer spending.
Identifying how their customers had changed and what they needed, allowed Airbnb to transition from international breaks, to local destinations that had work-from-home setups.
When you can’t predict the future, plan for the short-term
Airbnb won’t be ignoring international hosts forever though, and meal kits haven’t replaced restaurants. As I’ve said to clients, this isn’t a forever business strategy. Plan for short bursts. What does the next 6 months look like for your business? After that, reevaluate. The 5 year strategy is truly dead!
I was talking to a leading online learning organization, focused on long-haul development. They recognized that no one was currently looking to invest in a long-term course — but customers were willing to take on a short term investment to facilitate growth or a career change.
They decided that the most attractive offering during this time would be short courses, requiring less investment – in time and money. The company didn’t shut down, rebrand, or cut staff. They offered a temporary alternative, giving them a chance to serve new needs — without shutting the door fully on their standard offering.
There’s a reason this is a short-term strategy. In uncharted territory, it’s easy to be the first to the finish line if you’ve got a great idea. But as time goes on, the world has a chance to adapt.
Hand sanitizer seemed to be the product choice of 2020. As regular manufacturers were caught off guard, distilleries stepped in and repurposed their business model. It’s important to note though, that they didn’t become disinfectant companies. It was a temporary shift. The usual players in this industry have caught up, and the need for extra producers has dissipated. Plan for months ahead, not years, to save yourself this disappointment.
Provide solutions to problems. Focus on consumer needs, not business ideals.
In an ideal world, we look in on our business, define our goals, and work towards them. Your first priority now, is to look out at the landscape.
Switch the conventional SWOT analysis around. Most CEOs I work with already have a solid grasp of their organization’s strengths and weaknesses. Making the opportunities and threats the priority is giving them a new stance from which to approach customers.