Five steps for winning beyond the storm
The recovery from our current recession will look different to previous ones, but that’s also been true for just about every recession, in its own way, and there are plenty of lessons we can still learn from those past events.
For instance, in most downturns, the peak rate of business failure actually comes during the recovery, often lagging the deepest part of the recession by as much as a year, as people slowly burn through reserves and debt ceilings, trying to turn things around, racing to catch the rising tide, only to ultimately go under. It’s unlikely that pattern will be any different this time around.
We all have competitors, all of whom will be working hard right now to increase their efficiency, deepen their customer relationships and sharpen up their propositions, aiming to rebuild their margins, recover their business, and more importantly, create the headspace for investment that will secure and grow their market share once the world fully opens back up.
Your challenge is not just to do those things, but to do them better, faster, and more innovatively than any of your peers. Surviving the storm is of little value if, by the time you’re back on deck, the enemy ships already have you surrounded and outgunned.
So, here are the five steps you need to take to prepare for winning after the storm:
1. Renew Customer Understanding
Customer pressures, needs and behaviours have changed profoundly over the last few months and will change further over the coming year. If your understanding, insights and behavioural segments are based on the customers of 2019, they will already be divorced from your customers of today, and quite probably from the front-line experiences of your teams. Now is the time to start actively listening to them again with an entirely fresh set of ears.
2. Rethink Positioning
Most markets will see shifts in both the make-up and positioning of the players within it. Some markets will see a shake-out, others will see new entrants, aggressively trying to cover other losses through new expansion. Changing customer needs and behaviours will change who holds competitive advantage. All of this demands you rethink how you position yourself in this new landscape; what will make you distinctively attractive to a changed customer, with changed priorities, in a new competitive set? As a bare minimum, you have to explore the possibility that it’s not going to be the same as before.
3. Rationalise the Portfolio
Focus is the most critical component of pace, and over the next twelve months, pace and agility will define the winners and losers. But to create focus, to deliver the greatest priorities, everything else must be deprioritised, rationalised or exited. I’ve heard many leaders express anxiety over this: that now is not the time to make big decisions about where to exit. But now is exactly the time. If everything is a priority, nothing is a priority. You can’t sprint with anchors tied to both legs.
4. Refocus Sales and Marketing
The traditional way to ride out recessions is through heavy promotion and discounting, but it’s very different this time around. However, its more likely that, in the scramble to reclaim lost revenue during the recovery, those same traits will re-emerge. The ability to prepare and rapidly adjust marketing messages and sales approaches for what could be a potential promotion and price war, all while managing margins and rebuilding cash, will be one of the most decisive factors in success. And positioning, portfolio and preparation will be absolutely key.
5. Prioritise Innovation
But the single biggest factor in achieving success after this storm, is the topic I’ve written about more than any other these last two months: Innovation. Innovation is the energy source for rebuilding your portfolio around those emerging needs, lighting up your revised positioning, and powering up your marketing and sales machine. And just as for each of the other four steps, pace is the greatest prerequisite. Good things will not come to those who wait. They will go to those who are fastest out of the gate, with new solutions for customers; better, simpler, faster ways of doing business; those whose ideas manifestly demonstrate an intimate and profound understanding of the new world in which our customers will find themselves.
Final note: As you work through this list you will, in effect, be rapidly developing a new strategy for your business. And ultimately, that’s the point. Strategy is the way an organisation intends to succeed in its aims within the real-life environments in which it operates. Those aims may not have changed, but the environment certainly has, just as it will continue to change in the months to come.
If your strategy doesn’t reflect that change very quickly, your future will be very stormy indeed.