If you haven’t read Part 1, click here.
Believe it or not, there is one blessing out of the disaster that is COVID-19. It provides business leaders with the opportunity to take a moment, step back, look at the long term viability of our business, and take stock of its strengths and weaknesses. It allows us all an opportunity to evaluate what is and what is not working. So, today we are talking about thinking through the hard questions about the future of our businesses and focusing on ensuring their survival now and when things return to “normal”.
To get started, I would like for you to read through the following questions and then answer in the most brutally honest way possible. Remember there are no sacred cows here. Everything is on the table.
Because I have been there myself, I will provide my own answers to some of these questions. As a result of asking ourselves the hard questions, I realized that the business was in imminent danger of losing its long-term viability. As a result, we made the decision to strategically pivot the company – so much so that we joke that we’re a three-year-old startup that’s been around for 13 years. In the process of this introspection and pivot, we had to let go of several long-held beliefs – no, more than that – absolute fight-to-the-bloody-death truths about our business. Right now, everything about your business should be on the table for re-evaluation, even though it’s scary.
1. How much value does your business generate and where does it come from?
What activities contribute to your top line (i.e. sales) and what contributes to your bottom line (i.e. operational and cost efficiencies)?
You can start by thinking about a Value Wheel. Sasha Dichter writes, “The Value Wheel is the collection of things you do that create value for your customers.” He further goes on to explain that “Your job, when selling your wares, is to know which of these value wheel elements to present when and to whom, and to be facile enough in representing and rejiggering them to communicate just the right offering to each different (potential) customer.” If you would like more detail on the Value Wheel and defining your value to clients, read Sasha’s recent excellent blog post called Adjusting Your Value Wheel.
Here are some drill-down questions to consider: Is your business providing more value now than it was a year or 5 years ago? If not, why is that? With your current services, will it provide as much (if not more value) in 5 years? If not, what needs to change? Now here is a good place to consider the current disaster. The entire world has changed, and never again will it be the way it was before. Will your model continue to be successful during the “new normal” as the economy rebounds?
The businesses that survive are the ones that reality check their Value Wheel with brutal honesty.
2. Are you meeting your buyers where they are or where you want them to be?
With mandated social distancing, restaurants suddenly have empty dining rooms. Those that were well-positioned to absorb the sudden stop in foot traffic were those that had already embraced food delivery services like Grubhub and Door Dash. This gave them additional revenue pipelines and expanded their reach. Those that resisted and refused to recognize the cultural shift started by these services – the “Amazonification” of the restaurant business if you will – were behind the power curve with days or weeks of lost revenue and hemorrhaging cash. In other words, they weren’t meeting a whole swath of potential customers where they were. Yes, I love a night out at a fancy steakhouse, but some nights I just want the fancy steakhouse to come to me.
Now ask yourself: Are you behind the power curve? What industry trend (either before or during this disaster) have you not considered or dismissed? Are you diversified across several markets to avoid exposure to a single industry? Were these items not considered because you wanted the buyer to meet you where you want them to be instead of you meeting them where they are?
DL’s True Story: For years, I shot down implementing managed services for cybersecurity and insisted on not partnering with any software publishers. I thought that it meant more to the client to not have a cybersecurity company aligned with any brands in the name of being an “honest broker”. However, I now see that this was my belief and not reality. I finally woke up and realized that clients wanted us to bring them “the solution” and not 3, 5, 10 different possibilities. We are the experts, so we should know what’s best. In other words, they wanted us to just fix the damn problem. So now we partner with software companies, but on our own terms (see our three immovable criteria here https://www.assurainc.com/technology-partners/). What this shift did was give our business revenue diversity and options to engage with a wider variety of customers where they are, not where we thought they should be.
3. Do you really need all of that real estate?
Offices and retail space are expensive. If this disaster has taught us anything, it is that we used to assume that a lot of businesses could not operate from home or with an online model and we were flat out wrong. Are you better off reducing floor space and investing that money in revenue growth? Does that open your business to find talent outside of your geographical area?
DL’s True Story: Being business continuity professionals, we have always had technical and business solutions that allow us to work from anywhere, so that wasn’t a problem when the disaster hit. However, I have always loved having an office for people to come to each day. Before COVID-19 hit, I was negotiating an expansion of space with my landlord to handle the increase of staff as a result of our growing business. This was based upon my belief that if people have an office to come to, then the community that they create results in a better culture. You can also learn a lot about a person by seeing them in the office every day. How do they act during a casual conversation? Do they play nice in the sandbox with others? And my personal favorite: do they decorate their desk? You may ask what that has to do with the cost of bourbon in Kentucky, but in my experience, when people decorate their desk they tend to be invested in the company for the long term.
As a result of this disaster, I have reevaluated this belief and have since significantly scaled-down my plans to expand our office space. I am now thinking up creative ways to make better use of the space that we have so that my people may have the best of both worlds: a desk to come to some days and the ability to work from home on other days. In short, my belief was about to lead me to make a business decision that would have resulted in unnecessary expense.
4. Does your culture support working from home?
There are some businesses that can accommodate working from home and others, like an auto mechanic or print shop, that obviously cannot. I am speaking of those businesses that have an office environment and can support it.
Do you feel as though you and your team have to micromanage your employees because otherwise nothing will get done or it will get done wrong? Is that based on fact or perception? What does micromanaging do to the morale of you and your employees? Do you have high turnover? Are you not empowering your people enough to handle their responsibilities? Are you clearly communicating expectations and objectives and then holding them accountable for outcomes? Are you tolerant of mistakes if people learn from them? Did you cheap out on investing in technology that supports secure teleworking because “everyone needs to be in the office anyway”? This current disaster is an acid test of company culture. Cultures of trust/accountability were in a much better position quickly adapt to the “new normal” of working from home.
DL True Story: My management philosophy is simple. I am too tired and too old to micromanage people and refuse to have my managers do it since I pay them as professionals to do their jobs. You cannot coach a person not to be lazy or to give a sh*t about the work or the clients. So, I am very much about lots of training, documented business processes with repeatable outcomes, and letting people decide their own destiny. If I communicate my expectations and give them the tools and support that they need to do their jobs effectively, then they are in control of whether they succeed or fail. That said, my problem was that I didn’t realize my underlying belief that culture was fostered from an office location. I thought that if everyone saw each other each day, it built and maintained the culture. I was wrong. Over these past few months, the culture of my company is even stronger. People are more engaged and looking out for each other more than ever. The challenge now is how do we expand that culture to folks that will work for us from other parts of the United States and beyond?
5. Does your pride dictate your business strategies?
Did you quickly answer yes to each of the other questions? If so, I would ask you to think about pride. It is an emotion that can hurt us in the long run. Is it protecting you or keeping you from really looking at your baby? What does your gut tell you? If it tightens up while thinking about the future or if you have done everything you can do to keep your baby pretty, then you have some work to do.
Business ownership during the best of times is not for the faint of heart. Leading that business during a worldwide crisis requires even more internal analysis and willingness to “go there” and ask the hard questions. You can do this, and you will be better for it. Trust in yourself when asking the hard questions because no one knows your business as you do. Even if the worst happens, you can say that you did your best and faced it head-on while asking yourself the difficult questions. You will never have to worry that the world “happened” to your business and if you could have done more.
Stay agile. Stay safe. Stay sane.
– The Disaster Lady (Karen)