Today, I would like to share the content of coaching session with you that I conducted on March 24, 2020. We were at the early stages of a possible lock-down, social distancing and what it would mean for us to run a business on the outside while the office was vacated and zoom meetings with our staff and clients the only way to keep connected to the world.
My client is a successful business owner. The business is operating for over 20 years manufacturing and supplying the retail industry in Canada and the US.
Nobody in the world had any experience with a world-wide shut down before; there is no blue print in how to manage those situations.
What can I discuss with my client that has the potential to facilitate the next and most important steps they can do in this situation? What can become the life line for their business!
I created the following three scenarios as outlined below.
The situation is scary. We stop all our activities and wait until the storm is over. If we don't do anything - we avoid making mistakes.
The situation is scary but we keep moving. We keep in touch with our retailers and keep our eyes on what the global markets are doing. We don't know how long this will last but we'll keep our operations going but refrain from any new things. It may be too risky.
The situation is damn freaky but we have to position ourselves so that we don't go under water. We have a very close look at our weaknesses and find a way to make our business recession proof. We have to adapt quickly to the new global circumstances and be creative and innovative. Liquidity is key.
Let me explain the worksheet (btw, this is the original from March).
The left box represents the NOW. The right box is the FUTURE.
I anticipated that the blue t-line (time) between NOW and the FUTURE would be 2 years.
The vertical pink dotted line is the moment the economy reopens for business. I anticipated that this would be the end of QIII of 2020. I gave up on a possible recovery in QII 2020 and assumed that the beginning of QIII 2020 businesses all across the globe need to regain their momentum (supply chains) and consumer will have to heal first before they begin to consume again. Toward the end of QIII 2020 consumer confidence is back at 60%.
Let's have a look at the orange trajectory lines and what it implies to the three scenarios:
Scenario A was driven by FEAR and went into 'business hibernation' not knowing that past performances are no guarantee for future performances. When the economy reopened, the business has failed to adapt (switching from brick and mortar approach to eCommerce) and lost its market share.
Scenario B remained hesitant, conservative and protecting the status quo. They will not leave the playing field but they will also not be the winner in the game when hitting the pink line. Their approach was: This is the best we can do.
Scenario C (Champions attitude) made a risk assessment, looked at deficiencies and asked: What is the most important thing we can do that will have the biggest impact on our business?
Their approach was: This is the best it can be done right now. (Please compare their approach with Scenario B and recognize the difference).
We are still a 3 months away from QIII and a fully reopened global market. However, the 2 months from when we had this strategic meeting, the business kept an eye on their current pillars and focused tirelessly building another pillar to become more resilient in their industry for the future.
Take away: Please audit your business approach. Are you A, B or C?
Unless we have the crystal ball in front of us, we have to become innovative, creative and open to ideas and concepts that will be sustainable in the post-covid time.
Before you execute (blindly) make sure that you have a strategy and a plan that you can follow. You will be lost without a map or a plan when everybody tries to find their way through the jungle. Be prepared for the marathon.
To your success, Dirk Stroda