THE OPPORTUNITY IN CRISIS, AND HOW TO FIND IT

A six-minute read for those interested in positioning their business to dominate in the coming recovery.

A crisis can turn a company upside down. Those with an eye for being around when the dust settles will smartly see the opportunity to take this time and seize the offensive. When confronted by challenges, history has shown us that successful leaders look to evolve and better their businesses, they look to exploit challenge. Andy Grove, a former Intel CEO, once said, “Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them.” This is the goal for your businesses today: emerge stronger.

The global coronavirus pandemic has brought unprecedented management challenges. Rightly, many leaders are focusing on creating an environment of safety for employees first, then preserving and building customer relationships. For most businesses, disaster management protocols are well underway, and firms are looking to the future and recovery. While there are many unknowns, one thing is certain: both B2B and B2C businesses will see lasting change in employee and customer behavior and in competitive dynamics. Things probably won’t settle into a new normal for some time. The Spanish flu pandemic, which started in 1918, played out in three waves before it finally stopped being a deadly threat in 1920. It wasn’t until 1922 that people felt secure in crowded spaces. Accept this, too, will take time.

Finding Opportunity In A Crisis

The primary directive for your management or operating team going forward is to position and prepare your business to benefit from the disruption. See the opportunity. The actions you take now may well make or break your company on the other side of the curve.

Beyond the hope that mankind finds its humanity once again, opportunity is there for businesses that prepare and adjust early. Management must move from disaster management to focus on assessing the overall impact on business. From evaluating and securing supply chains, recharging employee productivity, managing cash, to identifying mitigating strategies to energize the business, there is a lot to think about. Maintaining your brand’s equity and market strength is going to be critical to be in a position to thrive during the recovery. Some companies will flounder and hesitate. Smart businesses will recognize this opportunity to gain competitive advantage. In crisis, there is always opportunity.

Recovery Response Planning

Now is the time to assess the shifts in your business dynamics and assess the impact of the crisis. With a thorough process, you will discover opportunities to gain advantage and restore balance. Your management teams will need to lead and operate with an agile, real-time mentality. Expect changes during recovery to continue for some time, which indicates taking an iterative approach to changes in positioning over time. Rapid assessment and implementation are essential to effect timely change. Now is not the time for long, labored, research-heavy pondering, and analysis. It is a time for immediate strategizing and decisive tactics that can move the needle as the recovery happens, not later. Business will be affected uniquely across different verticals and stages, still, we can make fairly solid assumptions about the current situation and its impact across most businesses:

• There will likely be a recession, prepare for a 12-36 month recovery period.

• It is inconceivable that market dynamics and your business model won’t change in some way.

• There should be a considered focus on the top line and cash flow.

• Businesses that are behind digitally will fall farther behind as online work engagement accelerates for both employees and customers.

• Employee morale, motivation, security, productivity is taking a serious hit.

• Brands/businesses will need to adopt a real-time, agile approach to decision making.

• People will still be afraid, struggling, and overly cautious for some time. They will need reassurance.

• Spending will be tight; the customer funnel will slow down, sales cycles will increase.

• There will be a rise of a post-aspirational mindset and the fall of a 10-year bull market.

• There will be an increased imperative to appeal to local community sensibilities.

• Businesses/brands will need to become more customer-centric, requiring better communication, engagement, and listening.

• The need to be more socially and environmentally conscious and cause-driven with a focus on sustainability will be dramatically heightened.

And importantly, know that…

• Business will recover, so be prepared.

Assess, Implicate, Prioritize, And Respond

To be prepared to move the needle in a meaningful way, holistically assess all aspects of your brand/business positioning against identified shifts. When the situation and then the implications are well defined, strategic and tactical solutions fall in place. Ensure your core constituents — leadership, employees, and the market — are optimally aligned for how the brand/business will move forward. Your brand is the representation of how your business thinks and behaves, how it operates, how it engages, and how it communicates. And your constituents are your advocates and evangelists.

Layer market findings and implications together with your financial assessments to be best prepared for recovery. Changes in market dynamics should be relatively clear; there is no shortage of vertical market data to research. Work towards understanding all aspects of shifted dynamics and distill, simplify, and prioritize the most relevant and meaningful implications and assumptions. What are the mandatories? Sound strategies and tactics are more often than not, grounded in intuition and good common sense. Don’t over-analyze or get caught up in too much data. Simple is always good. The situation is likely to change several times during recovery; you may well go through the process more than once.

Leverage these three steps in your recovery response planning to get started and add specific questions based on your business and vertical. Assessment and implication naturally lead to remedy. The goal is to be able to impact readiness and imminently apply tactics to optimize opportunity. Assessment drives implications, which drives planning, and finally, execution. Start here:

1. Market Situation Assessment
What Are The Shifts In Your Market?

• Market opportunity, scope, focus

• Has your market changed? Your audience?

• New market outlook in 12 months, 24? 36?

• Competitive dynamics

• Customer personas, psychology

• Sales dynamics- a shift in fundamentals?

• Digital engagement and behavior

• Customer needs, demand, preferences

• Sales engine and purchase cycle

• Supply chain

• Customer and market sentiment — psychodynamics

2. Situation Implications
How Do The Shifts Directly Impact Your Brand’s Positioning And Articulation?

• Brand/business differentiation

• Positioning – strength, and relevance of your value proposition

• Positioning shifts on operations

• How is messaging and communications affected?

• Marketing mix?

• How does the product/offering need to shift?

• Is your brand ideally positioned for the new normal?

• Are you offering what customers now want?

• Is your to customer engagement correct

• Are you communicating the right messaging

• Are you contributing and giving back?

• Is your positioning resonating?

• Positioning understanding and alignment — management and employees

3. Strategy, Planning, And Tactics
What Actions Do You Take To Prepare For Recovery And Leverage Opportunity?

There will be a lot to consider, so work to distill your research to the most critical and relevant implications and conclusions. Keep it simple. From these first two paths of analysis, and in conjunction with fiscal assessments, response strategies and tactics and their prioritization, will generally become self-evident, they will show themselves during the process itself. Focus on the initiatives that have the most significant impact, are imminently actionable, and can be reasonably be executed within your company’s capacity. The goal is to align shifts in business with the shifts in your market. Explore remedies with both near-term and long-term perspective; sustainability is important. Of course, determine all strategies and tactics based on your available spend, human resource capacity, and ability to execute. Viewed within those constraints, consensus among leadership should come easily.

Amor Fati

Take advantage of this unique opportunity to assess and pivot or reposition to gain advantage and momentum. Markets coming back to life, and you want to be ideally positioned. If your firm is looking to restructure, you’ll need to go through the same process to reposition the firm coming before coming out of restructuring. Restructuring and rebranding/repositioning go hand in hand.

Be open and transparent and involve all levels of your company. Through it all, communicate regularly with employees, customers, and stakeholders. The process itself can reestablish and reinvigorate employee energy and productivity. Employees are your most important constituent and require the most support and engagement. Take care of them. For folks in private equity, this is likely a hold period for portfolio companies. It’s a better choice for stakeholders than selling at a discount. Operators can leverage this same process to identify any required shifts in positioning for their portfolio companies and accelerate their recovery.

Have empathy and compassion, and understand that the world will forever be a different place. Practice what the ancient Stoics called amor fati, or love of fate, and you will more than survive, you will thrive.

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