The shocks to your system might not be what you think they are. You’d better take a closer look.
Hey, you there…the guy or gal with the life you always wanted. How does it feel?
You are working from home. Your computer screen has become your window into the world. And, you have realized that it is, in fact, possible to pack more meetings into a day if you just sit still and do everything by videoconference.
But, how’s your business? I mean, really, how is your BUSINESS?
I don’t mean how many COVID-19 cases do you have. I don’t mean how many furloughs, shutdowns, or capacity reductions do you have. I don’t mean how much stimulus cash you were able (or not able) to borrow. And, I certainly don’t mean how much sales have decreased (or, if you are lucky, increased) over the past couple of months. Those are interesting, good coffee chat items.
But they are the items in the spotlight. And, the spotlight in this case is searing. Everything–and I mean everything–is being cast in terms of the effects of COVID-19. Media coverage grasps at straws for something new after months of exhausting coverage and in doing so pulls ever more anecdotal evidence onto center stage. Statistics that we never knew existed (well, ok, some of us knew what an R0 was, but only kind of) are now part of the national discourse. And, yes, your employee base is focused on these same things.
But what about what’s happening with your business outside of the spotlight? How are you thinking about that? Because that’s really what you need to focus on.
Yes, your business has sustained a shock due to COVID-19. All of ours have. Some have been to the upside (hello to the pizza industry), and most others have been to the downside.
But what’s the long game? What if the current economic and social wreck becomes a massive strategic reckoning for your business in the long game?
For instance: What if, instead of the spotlight worry about a second wave of COVID-19, the second wave is that actually your business is no longer built for the state of the economy? What if you are a business that thrives on in-person service, or that depends on people traveling, meeting, and conversing in person? Well, you’ve probably already seen the shocks. But what if you are a company with a China-centric supply chain? What if you have a salesforce built for in-person engagement and wins? What if you have service operation that has grown too dependent on “just showing up” vs. having targeted appointments. You may not have fully absorbed the notion that your organization is built for another time.
How do you figure out if your business model is a dinosaur…all of the sudden?
Here are a few tips:
First, get out of the spotlight and look at the true shocks.
Take a few moments to avoid the COVID-19 terrors and look at the true shocks in the system. Some that come to mind are cheap energy, restricted travel, fearful consumers, worried workers, and governments turned massively protectionist. Then, look at the second-order effects that accompany them: Less face to face interaction, more small group gatherings and higher use of intermediary technology, lower needs for “real life” office space, more meals at home, and higher desires for sanitation and “certification” of places–things–and even supply chains.
In other words, get out of the spotlight and look at the world as it is, and not as you hope it will be.
How will changes in the world–not just demand at the moment–affect your business model? Uber’s business is massively disrupted by the lowering of volume due to travel bans, but the real question is whether Uber’s business model has been obliterated by the consumer’s newfound knowledge of disease transmission and the desirability of so-called “cleanliness standards.” How does Uber coax people back into random other people’s cars in this environment? Can it be done? Is there a “certified sani-wiped” uber option that is right alongside Uber Comfort? Would you ever not take that option?
To extend the Uber example, what does all of that mean for the sharing economy as a whole? In a world where every un-masked cough and sneeze is now an emotional moment of irrational terror (thanks to attention-starved media and a populace that is not so great at math), how does the consumer think about picking up that random scooter off of the ground in the city and taking a spin? For the more concerned among us, it probably looks about as attractive as picking used chewing gum off a handrail at the moment.
And, yes, Uber may be an easy example, but your company’s widgets or services are likely to need to change. You’ll see fewer service desk visits, so you’d better beef up your call center. You’ll have fewer sales calls completed in person, so you’d better have alternate channels ready to pick up the slack. Perhaps you’ll have more scrutiny on the origin (and country risk) of your product. Hopefully, you’ll have a renewed but balanced view of the cleanliness of your facilities, products, and service people.
The only way to know is to think it through. This isn’t a demand curve shock that just sliding demand back a bit. This is a global-killer asteroid for some business models.
Finally, after you’ve thought it through, form a point of view on risks and opportunities, and shift now.
You are likely resource-constrained. Everybody always is. But if you are leading a dinosaur business model, it will only get worse. The time to change is now. Re-double efforts in newly-advantaged sales channels. Invent or enable advantaged service models. De-risk supply chains. Evaluate product and service mix and ensure proper resourcing. Signal readiness for the new normal by standardizing cleanliness. Respond to new needs. In short, be entrepreneurial in the face of uncertainty.
The question in front of all business leaders at the moment is this: Can you look past the immediate effects of a global wreck and avoid a second-wave reckoning? The shocks to your system may not be what you think they are. You’d better take a closer look.
What do you think?