A call to rise
Never in recent memory has the market been more uncertain. The virus upended several industries. Affecting customers in both mature and emerging markets. While investors and policymakers figure out how to navigate this recession, it’s time for businesses to create opportunities from the chaos. It’s time for CEOs, CFOs, CTOs, and the whole C-lever suite to rise to the occasion and raise the bar for themselves and the operating procedures.
Here are some second-level contingency procedures that you need to take care of.
- Separation of essential operations and services,
- Focus on high-priority customers and clients
- Implementing operational and financial groundwork consistent with a two-to-three-quarter recession.
If you remember during the last recession, the companies that survived were the ones who created a market for themselves despite the uncertainty. Amazon, Apple, Salesforce, and Cirque du Soleil. The common thread: market competing moves.
What it must take
Of course, business teams are finding it hard to resist the urge to fire-fight at a time like this. But the opportune time to go for the kill is now. We analyze more, organize, more, and execute more on things that count. Spends and budgets need to be strategically planned, partnerships need to be well-researched and sealed. Only then can we lead the way out of recession into calculated wins. If not now, when. If not you, then who?
- Don’t wait for growth to slow to make market creation a priority
Creating growth resilience calls for a healthy, balanced cash flow that builds during downturns and reaps during upturns of the market. It requires market-competing financial strategies backed with hands-on execution. It is both proactive and grounded. This was because the business is not held hostage to swings in the business cycle. Think of how Microsoft re-invented itself under the leadership of Satya Nadella. In the case of startups, only 6% make it from a seed round to Series A, and only about 23% make it from Series A to Series B and only 33% from B to C. Zoom out a bit further, there’s only a 0.5% chance for success. This is very near likely because businesses do not make market creation a priority.
- Make market creation a core function instead of siloed effort
Market-creation cannot be a side-project if you want to compete. It needs to be a business growth priority with allocated funds. And leadership that owns and focuses on resilience strategies that revolve around market creation wins. It sets the tone for the rest of the organization to pick up an unstoppable momentum. This may include getting experts in sales systems and processes while outsourcing operational support. And you may also get seasoned experts with the right networks and secrets of the trade to help you with business growth and development.
There have been far too many instances where the sales team may be targeting a certain audience while marketing and advertising campaigns pursue another audience. This is not going to work for business growth. Preparing in advance could mean using planning mechanisms like scenario planning, the good ole’ SWOT analysis, and Michael Porter’s five forces of competitive positioning to name a few. But you have to make it a core function that integrates marketing, sales, and support efforts.
- Invest in value innovation not just “tech”
Technology in and of itself cannot create markets. It is value innovation that does. During recessionary times, customers become highly aware of what adds the most value at an optimal price. Why do you think Blockbuster didn’t make it the last time around? If your product or service is making your customer’s life simpler, then it’s worth pursuing.
Before you ask ‘what,’ the ‘why’ needs to be established. Innovation is to technology what ‘the why’ is to ‘the what’. Technology is an artifact. If it is to stay relevant for a long time, there needs to be a process of curiosity, exploration, action, idea generation, learning, unlearning, prototyping, experience, experimentation, storytelling, and understanding of its social impact. Before you invest in technology, ask why instead of what.
- Leverage policy adjustments and fiscal stimulus to propel your growth
Favorable policies can act as tailwinds to your business growth. Riding this out will need you to keep one eye on anything that can propel you through an unfavorable market cycle. For example, the government grants a collateral-free loan to MSMEs, and it favors attractive opportunities with domestic players. Anything that aligns with your vision and values can be leveraged for growth.
Governments and statutory bodies are constantly scanning for opportunities that will be supportive of recovery at this time. Recent news shows how Asian governments are coming up with goals that increase government spending that can stimulate business growth. Take advantage of them and do due diligence.
- Use a combination of red and blue ocean strategy
Gone are the days when red and blue ocean strategies were treated as binary concepts. Companies need both. Businesses need to constantly disrupt the old to make room for the new while anchoring down these efforts with corporate strategy and a well-oiled financial management system.
The times are ripe for disruption and evolution. It’s easiest to spot an opportunity next door in a digital age at stressful times. No wonder adjacent and emerging markets are becoming more conspicuous. Digital transformation combined with good leadership can intrinsically create a high-impact solution of dynamic relevance today.
- Create multiple revenue streams
Making sure your cash flow is not dependent on one cyclical project, contract, or event is key to maintaining financial health. That way, even if one fizzles out your partnerships are sustained and your cash balances can be adjusted.
Good market research should show you ideas you don’t already have. Perhaps your primary target audience is not the only customers you should be pursuing. Look for unique insights in the data. You might find new perspectives and other customers you should target. Of course, it will require allocated financing, resources, people, strategy, etc. But it will secure strong systems in place to keep operations going even during crises.
- Stay lean and connected
If you need a better grip on your small business, consult experts in the matter. Remote work and virtual communication have allowed businesses more access to talent across the world. Today you can consult with experts and on a Zoom call and speed up your decisions to enter adjacent or new markets.
Airtel comes to mind for a team that successfully outsourced its IT as it prepared itself for hyper-growth. Many startups and newer firms make more sustainable financial decisions when it comes to hiring talent. You don’t need to pay full-time what you can outsource for a fraction of the cost.
While all these efforts are going to require money, multiple options are going to fight for your attention. Spend. But the key is to spend on the efforts, investments, and partnerships that matter. What you had to have in-house once upon a time can go out the window. Today, in the gig economy, you don’t need all the resources full-time. Smart companies stay lean, build partnerships, and enhance value getting the best bang for the buck.
Turning a cyclical business into a steady growth business is a step in the right direction. Outsource when you can and keep making market competitive moves. Getting help from an expert was a mistake, said no one ever.