I don’t have to tell you what the current effects of the Covid-19 health crisis are on our lives and livelihoods today. It’s global, it’s everywhere and we are all going through it at the same time. Turn on the news or browse through your favourite digital platforms and you will be confronted with the reality of things. That, and the fact that most of us are on lockdown at home. Life as we know it, has been disrupted in so many ways.
And while some of the changes in our daily routines are going to be temporary, I believe (and many experts with me) that there will be quite a number of things in our professional and personal environments that are going to change significantly – and for good.
One of the things that we can all agree on, and have witnessed across the globe is how important digital solutions and the internet has become in our society and in our economies. And while access to the internet and these digital solutions is still not readily available to about 4 billion (!) people, many of these tools have enable companies to leverage the power of the internet to reach and impact the lives of people that don’t have.
With people losing jobs, access to resources, limited access to non-covid-19 related healthcare. People losing loved ones – there is a lot going on that we have limited control over right now. This, with the uncertainty of time: how long is the peak of this pandemic going to last?
The truth is, nobody knows exactly how we will come out of this. We can theorise, we can calculate and speculate based on historical data and look at past global crises similar to this. And we still won’t know for sure.
So then really, what does this mean for our businesses? Good question.
One thing we can be sure of; once we do come out of this crisis, it will be to a whole new world, with a different order, and different needs to facilitate an (ever changing) new way of life. And if we have learnt one thing about the past two global crises, it’s those who took action, those who prepared in the midst of it were not only able to make it to the ‘other side’, they came out winning.
And with all the losses that we have had to endure over the past few months, I believe a lot of us are ready to start working towards a win.
I have broken down some points on what I believe the disruption that is currently happening will mean for the future of business, and how you can prepare to come out of it – stronger.
Time to re-strategize
An HBR article published a few years ago found that during the recessions of 1980, 1990, and 2000, 17% of the 4,700 public companies they studied fared particularly badly: They went bankrupt, went private, or were acquired. But just as striking, 9% of the companies didn’t simply recover in the three years after a recession—they flourished, outperforming competitors by at least 10% in sales and profits growth. A more recent analysis by Bain using data from the Great Recession reinforced that finding. The top 10% of companies in Bain’s analysis saw their earnings climb steadily throughout the period and continue to rise afterward. A third study, by McKinsey, found similar results.
Going in to the more recent global financial crisis in 2007 – 2009, not only did a surprising percentage of companies come out of it with steady growth numbers, quite a number of them actually flourished and experienced exponential growth in the years that followed.
The difference maker was preparation.
Among the companies that stagnated in the aftermath of the Great Recession, “few made contingency plans or thought through alternative scenarios,” according to the Bain report. “When the downturn hit, they switched to survival mode, making deep cuts and reacting defensively.” Many of the companies that merely limp through a recession are slower to recover and never really catch up. – Source
We are currently seeing a similar divide among businesses. There are those that are now focused on keeping the business running as much as possible, and as close to the way it was before as they possibly can. Then there are those, including some of my ScaleUp clients, who are looking at the developments within their market, the response and behaviour of their clients and are deciding to go back to the drawing board to re-evaluate their position and strategy.
So here are the first key steps you can take for your business
While some companies should definitely keep doing what they are doing (Zoom, Microsoft, Netflix, takeaway.com) a lot of others will need to re-strategize, re-invent themselves; pivot.
Look for new opportunities and innovate: first, look for new opportunities wherever you can. If the recession is located in one specific geographic area for your particular business, consider expanding to new territory. If your target audience is suffering, change your offerring or attract a new audience. If there’s something lacking in your business model, don’t be afraid to reinvent yourself.
A great example of this is that of a local corporate lunch delivery service here in Amsterdam, that went from serving a few hundred clients a week to zero in a matter of days because offices were shutting down as they all started working from home. So the company decided to change their offering. They offered to deliver the lunches to the homes of all the clients employees and thereby retaining their clients. And they started offering their services to families who were now on lock down at home with their kids – attracting a whole new set of clients.
Digitize your offering: if you weren’t sure if digital was the way to go for your business before now, it’s time to look at your options again. For many businesses there lies a huge opportunity to retain and attract customers by moving your offline services to a digital offering. Think about the high value products and services that you have that you can sell online through your own online store or other platforms, and events that you can host virtually using virtual summit tools, or moving your consultations to digital meeting rooms and increase interaction using collaboration tools. And guess what? It’s been proven likely that you will be able to cut significantly on costs, increase productivity and efficiency to name a few advantages.
Help those in need: both consumers and businesses struggle in an economic recession, so find a way to serve those sufferers specifically, with different pricing structure or new opportunities they can leverage to make it through. This is not the time to commercialise on the back of the crisis – be genuine in your outreach.
Present an alternative: In a recession, people will make hard choices about what to cut out of their lives. If you can give them a more cost-efficient alternative to what they’re cutting out, you’ll stand to win big
Pro branding tip: empower your employees to become brand ambassadors: You will be surprised by the number of employees you have working in your company that could be amazing brand ambassadors for your business (really, they all should be) and help drive more of your core clients your way. Question is, do they have your support – or better yet are you cheering them on to do so?
Case study Lin Qingxuan responds to lockdown Corona crisis
For example, cosmetics company Lin Qingxuan was forced to close 40% of its stores during the crisis, including all of its locations in Wuhan. However, the company redeployed its 100+ beauty advisors from those stores to become online influencers who leveraged digital tools, such as WeChat, to engage customers virtually and drive online sales. As a result, its sales in Wuhan achieved 200% growth compared to the prior year’s sales.
The harsh reality is that some businesses may simply not survive if this pandemic takes much longer (do try to apply for government aid if you can). But that doesn’t mean we can’t put in the effort to make the absolute best of it. And who knows, perhaps the shutting down of one business will be your open door to a new business that is relevant and uniquely positioned for the new business climate that awaits us.