I have been so excited to write this article, and now that the time has finally come, I’m almost a little nervous.
Why am I so excited? Because since March 17th, my attention has been on the opportunity that exists in times of crisis. It may sound callous (and to a degree it is), but in the middle of all the economic hardship and social upheaval we are experiencing right now, there is an opportunity for some businesses to grow faster than ever.
One quote that has been reverberating in my head is rather mercenary but strategically quite right, and it is this, “the time to buy is when there’s blood in the streets.” The quote is credited to Baron Rothschild an 18th-century British nobleman who made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. Before you think I’m an excellent study of 18th-century investment philosophy, know that I heard about the quote from Jodie Foster in the movie Inside Man.
My movie-watching history aside, this isn’t hollow optimism or gross hyperbole. There is a tremendous opportunity out there. What makes it so hard to see is the very large, very uncertain gap between doing the work to position yourself for the opportunity and the enjoyment of all that hard work.
The opportunity is only for some businesses
For many businesses, there is zero opportunity right now.
This isn’t because of external circumstances. Sure some industries and areas have been hit harder than others. But that is true for everyone in those industries and those areas, and some will succeed, and others will fail.
While there are a lot of factors that matter, no one factor is more determinant of the business’s overall success than their current lifecycle stage and their choices based on that stage. Opportunities exist for businesses in almost any stage.
However, the majority of those who will grow the most from this challenging time (and some who are already growing hand over fist) will be those in Predictable Success when the crisis hit.
Recession-proofing in Predictable Success
While there is no way to entirely recession-proof a business (ask the airline industry right now), the best way to give it a fighting chance in any business environment is to get your business into Predictable Success before the crisis hits. Getting into Predictable Success and keeping your business, there is hard work.
When the crisis hits, and there will always be another crisis, those companies who are in Predictable Success will have not only the greatest ability to survive but also the best opportunity to thrive despite the difficult challenges of an economic downturn.
Being in Predictable Success is not enough
Being strong doesn’t win you the gold medal. Sure, you need the strength, but you have to put that strength into action. There are risks and pain involved, and there’s an incredible reward as well.
Here’s a strategy that I’ve been using for companies in Predictable Success. With this strategy, they can create years of growth right now and come out of the crisis, not only surviving but thriving and better off because of it.
The strategy includes three consecutive phases. Many businesses will likely have been through phase 1 by now. The majority are likely in phase 2, and some will soon be transitioning into phase 3. The overall success of the strategy won’t vary in the long run. However, each phase’s length depends on the business, the industry, the location, and the leadership of the business.
Because of the variety of readers, I’m going to dig into all three phases. If you’ve been through one already, feel free to scan it or skip it altogether.
Phase 1: Prune back quickly
For some industries, this means cutting back a lot. However, for most Predictable Success organizations, all you need to do is prune. You may need to scrap a couple of new test projects, delay the launch of a new product or service, hold off on a new HR initiative, or lay off some of your lowest performers.
No matter the depth of cuts needed, it has to be quick. The longer you wait, the deeper you are going to have to cut. The deeper you cut, the more likely it is to push the business out of Predictable Success. Cutting in stages is problematic as well as it acts as an anchor to your progress in recovery. The best approach is to quickly make the initial cuts you think you need and then get all hands on deck as you work toward the future together.
If you have not yet made the cuts you know you need to make, time is running out. While your business is unlikely to disappear, you are likely depleting cash reserves that could be better used elsewhere.
That’s not to say it’s easy. That’s not to say I enjoy seeing good people lose their jobs by any stretch of the imagination. In fact, I’ve seen several companies have to lay off more employees purely because they waited too long to decide to prune, and I don’t want to see that happen to you.
Phase 2: Go scrappy
Predictable Success is the last stage where scrappy still works and mixed with the business’s internal capabilities; scrappy is powerful right now. Once you’ve pruned back as needed, it’s time to turn up the innovation. You need to shift your mentality from playing chess to tennis. The time to decision is fast, feedback loops need to be short, and you need to be communicating a lot.
Make decisions quickly
This isn’t a license to be rash, but it is a call to move fast. You’re going to get it wrong a few times. You’re going to have to figure some things out as you go. But the pain of either of these pales compared to what you will experience over the next two years if you’ve played it too safe. You’ll watch others move forward, and you simply won’t be able to catch up.
Think in terms of trying and not committing
It’s easier to make a 30-day decision than a 3-year decision. To the degree that you can (and maybe a degree or two more), decide to try new ideas and concepts. Where before you would typically have 1 or 2 big initiatives, now you should have 5-10 medium or small initiatives. In his book, Great by Choice, Jim Collins dubs these principle Fire Bullets then Cannonballs. If you’ve not read his book in a while, I’d strongly recommend you take it on your next trip to the beach.
Get out front
We need strong leaders moving forward and doing it visibly. Both for your sake and for the sake of those you influence, we need leaders in Predictable Success organization to lead us all forward.We need strong leaders moving forward and doing it visibly. Both for your sake and for the sake of those you influence, we need leaders in Predictable Success organization to lead us all forward. Click To Tweet
You need to be getting out in front of your market (maybe to sell, but definitely to speak and to listen). Give away content, encouragement, and strategy publicly. Support the heroes in your industry. It may be front-line workers, the folks who are working night and day to keep things moving forward for the rest of us, moms who are bearing an enormous burden at home, anyone. The key here is that you provide value to people who are at least proximate to your market.
Now is a unique time to build a strong brand and generate goodwill. In January, nobody would have paid attention at all. While the business world is certainly noisier than it was in March and April, there is still an opportunity for your voice to be heard.
Phase 3: Get strategic
This is where it gets good.
Of all the stages, Predictable Success gives its businesses the greatest capacity to operate strategically in challenging times. Great margins, substantial cash reserves, high momentum, and a cohesive leadership team (all hallmarks of Predictable Success) allow you to start playing the long game before anybody else.
While you needed to shift from chess to tennis quickly, phase 3, where the real, lasting gains will be made, is all about shifting from tennis to chess. Predictable Success companies are best able to do this by lifting the most senior team’s to 1-2 years (and further when possible) out while the next level of managers re-takes responsibility for the tactical.
The hard work of letting go
The reason this will create such a distinct advantage is that it is tough to do. Those urgent tactical issues are screaming for attention, and now, after working in the tactical space for a few months, you probably like it. You can tell if what you’re doing is working. Things move fast. It’s exciting. The results are visible and meaningful.
You have to do the hard work of letting go of this urgent work long before it feels like you should so that you focus your time and attention on your important work.
The hard work of seeing clearly
Russ Fletcher, CEO of Xyngular jokingly said in a recent podcast interview, “My crystal ball is a little muddy right now.” None of us can see the future with 100% percent clarity. Here are a few recommendations for getting clear:
- Turn off the news. This is just sound advice, especially right now. We have a tendency to consume news media that confirms our bias. This does nothing to add clarity, but it sure does add to the noise.
- Dial back social media. You can use it to stress-test your clarity, but don’t use social media opinions to create clarity. It won’t work.
- Lean into what your gut is telling you, get that information out in the real world, and track the responses in your shortened feedback loops.
- Look to history. This isn’t the first recession. This isn’t the first pandemic. As unprecedented as these times are, in the words of wise Solomon, “There is nothing new under the sun.” Much of what is to come has already been. It’s for us to understand and interpret these patterns and principles.
- Look outside of your industry. Some of the most critical insights for your business will come out of other industries. Look at mature industries that are dying. Contrast those with new industries that are rising. And then consider how those same principles will play out in your industry.
- Seek counsel. Sometimes an objective, outside perspective is exactly what you need to get clear.
The hard work of standing in the gap
As I mentioned in the introduction, there is likely a huge, very uncertain gap between doing the work and seeing the results. Most businesses can’t tolerate it. It’s risky. It could fail. It’s not normal.
Those who do stand in the gap are indeed playing the long game. They stand to gain much more over the coming years than they’ve lost in these past months. Focus on doing the important, day-after-day. Do it tirelessly, especially when you don’t see the fruit of your work. If you play the long-game when it’s not easy, you and your company will win. I can’t wait to see you do just that!
I’ll leave you with an ancient Chinese proverb that says all of this in just 17 words.
“The best time to plant a tree was 20 years ago. The second best time is now.”
If you’d like help crafting the right COVID exit strategy to reinforce your position of dominance in your market and put your business on the growth track for years to come, give our office a call and ask about our consulting and executive coaching services.