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COVID-19 – Reinventing Ourselves to Last!

October 8th 2020

Reinventing Ourselves to Last

The current global pandemic is disrupting our social, economic, and personal environment. I am proposing to you today a reflection that aims to support your managerial approach in this imposed step back.

First, the diversity of economic activities and the intrinsic nature of each industry results in variations in the goals that each company can set for itself during this turbulent period. Far be it from me to think the vision I share with you is a panacea for everyone’s challenges.

We first find two business situations quite polarized in the current economic context:

• Those whose priority is to guarantee the viability and sustainability of the company
• Those who are to take maximum advantage of the opportunities that emerge in their sector

Two diametrically opposed positions; a “Survival” situation and a “Growth” situation.

I will not dwell on the so-called “growth” management contexts as it is clear that their commercial offer, their methods and ways of doing things respond favourably to the constraints and specificities of the current economic context in their sector of activity. We need only think of companies such as Amazon and Netflix that already had all the ingredients to take advantage of the current situation, or even of Shopify, which was just waiting for the spark to explode.

Let us focus instead on all the companies that find themselves in a management vacuum, in the unknown and ambiguity, that force them to reinvent themselves in the face of a new business environment.

The term “forced” takes on all its significance in the fact that “whether or not they like it”, these companies struggle with complex reflections on significant adjustments to their way of working, adjustments intended for some of them to guarantee their viability for the coming months or years.

If your business is in this situation, let’s try to see how to optimize a strong comeback, how to develop the best possible strategies and action plans based on a few work streams.

 

Inhale…Exhale…

My first intervention is to raise a flag on the trap of short-term decision-making hyperactivity. Although some business situations currently require quick and possibly drastic actions, I suggest controlled breathing—at least good and deep breathing before making any short-term decisions.

If needed, create management space by temporarily reducing your operating costs to give yourself leeway, the time required, for a quality reflection.

A successful entrepreneur is often the one who quickly knows how to take advantage of opportunities. He has a personality and an “opportunistic” profile by default. Let’s say that the reflex of “let’s act, and we’ll cross that bridge when we come to it” is not uncommon for the entrepreneur who loves action and who is passionate about their business.

A profile that is definitely a “plus” for starting and developing your business, but which can be a “minus” when the decision-making context becomes more ambiguous and complex, as the current situation may become.

If the pandemic sufficiently shakes up the parameters of your business environment to the point of introducing or even imposing a so-called paradigm change, your company’s sustainability and growth may no longer depend on your strategies, processes, and historical operational structures.

And if so, it is unlikely that a 15-minute action plan on the napkin of a restaurant will be optimal and that it contains all the key ingredients of a 180-degree turn necessary for your future success. I have not found the source of this management expression, which has always been of great relevance to me:

“If you don’t know why everything works well when everything is going well, you cannot understand what goes wrong when everything is wrong. The motto “Know thyself” immortalized by Socrates is a premise of success that also applies to business management.

If your business historical evolution has never forced you to deepen and master the key dynamics in your organization, the current episode is an excellent time to take stock and to start afresh on new steadier management foundations.

 

Paradigm Shift, Business Model Change

The “Business paradigm” or “Business model” expressions always work very well in a conference or a managerial conversation, but what are we talking about? Philosophy has studied the thing (Thomas Kuhn), but in simple business terms, we can talk about the representation of a context, of a coherent model of operation that we can associate with certain rules or technical logics intrinsic to the product and the behaviour of a target consumer.

We can then propose the notion of “business model” as composed of two aspects:

  • The commercial choices (technical characteristics and target sectors) that gave life to your offering of products and services.
  • A set of behavioural characteristics of your target buyer

The two aspects are strongly linked, of course, by a simple sacred principle of the business world, which is your aim as a business manager to constantly maximize the match between your commercial “Offering” and the “Demand” of your target customers. When people bore us to death with the notions of “paradigm shift”, “business model change”, etc., what is actually happening and what are the impacts for your business:

  1. First, probably a major change in the needs and/or purchasing behaviours of your potential buyer.
  2. Your obligation to adapt the characteristics of your offer to meet these additional needs and behaviours of your potential buyer.
  3. Your obligation to then bring down, deliver and implement, the conclusions of 1. and 2. in your ways of doing things for all the organizational poles of your company (marketing, sales, production, administration, customer services, R&D, HR, etc.) in an integrated and fluid manner.

As a specialist in your field and company, I have no doubts about your abilities and your expertise for the analysis and the conclusions required in point 2. Concerning point 3, at most, I redirect you to one of my previous posts, “Managing Resistance to Change“, which is still relevant today. Because if you are struggling with a shift to make in your business model, it is a safe bet that change management will be at the center of your concerns.

I would therefore like to draw your attention to point 1; “a possible change, even radical, in the needs and purchasing behaviours of your consumer”.

Why would you tell me how obvious it is that if my potential client’s needs change, my offer must change as well? It may be obvious for many managers, but it may also be very complex to apply.

The causal link is indeed simple and straightforward, but the issue is not to understand this semantic evidence. It is rather whether you can quickly detect a paradigm shift unfolding before your eyes to develop rapidly the action plan required next.

In times of social and economic reassessment, market upheavals can not only alter your customer’s purchasing decisions in terms of the types of products they buy (technical features) but also how they want to buy them (customer experience). It is in these two aspects that major and insidious upheavals can occur.

In the climate of uncertainty and instability of a pandemic, a competitor, new or old, takes advantage of a very fertile ground, psychologically speaking, to convince your usual target customer to change the way they meet their needs, and convince them they have found the recipe for guaranteed satisfaction.

My point here is that if your management analyzes are carried out within a usual historical framework, you may miss out on new competition on your radar. We cannot see and identify something where we are not looking, and we cannot quickly recognize and identify something that we have never seen. A new competitor may have developed a new product or a new way of doing things based on disruptive technology (“disruptive innovation”). A technology that fundamentally changes the ways of functioning, manufacturing, and delivering to consumers. It is a simple definition of disruptive technology.

The history of industrialization reminds us of this. Disruptive technologies are those that constantly change social behaviour and helps to create or dissolve sectors of economic activity. For example, the arrival of a clear first intention of a steam-powered motor vehicle around 1770 radically altered the horse-breeding and carriage-making industries.

Disruptive technologies are, therefore, historically the basis of major changes in business models and paradigms. Artificial intelligence (AI), already in our discussions since a few years, is certainly fertile ground for the emergence of the next disruptive technologies that will further profoundly change our current habits and ways of doing things.

When a competitor finds a new way to address a need in an existing market or creates a new need that replaces another, if he or she is operating in your industry, he or she may likely appear at the last minute in your rearview mirror at 200 km/h. If your business finds itself in this situation, your action plan must be quick, and the investments possibly massive.

Consequently, in the current context, your reflections must be done in a 360-degree vision of your business universe to validate all the blind spots of your current management vision to avoid unpleasant surprises.

 

How to Reinvent Ourselves and Evolve

My first two suggestions, therefore, can be summarized as follows:

  • Take the time to think carefully, do not rush your decisions, do not act in panic.
  • Do a 360-degree reflection on all aspects of your organization (strengths/weaknesses) and your target markets. Analyze all your possible blind spots.

What remains for me to suggest are a few working avenues to move from “what” to “how”. Here are some work streams:

  1. The marketing angle: vision and major trend

    Push the marketing envelope on the evolution of the market, by asking you a question such as “If I wanted to increase the comfort (product delivered/purchasing experience) of my target customer, under the assumption that I do not have technical or financial constraint, what would I deliver as a product and how would I deliver it to my customer?” Browse the web and do what is commonly called a onetime marketing intelligence.

    Make sure you focus on the need of your target customer and not a product. Example: You can provide lighting and power with electricity, gas, fuel oil, candle light, etc. To validate your blind spots and the possible arrival of new business models, you have to analyze the need to “light up” here, not the specific candle market.

  2. The productivity angle: ways of doing things and lean management

    Identify each critical process in your business and analyze each step of these processes to validate opportunities for improvement with new technologies available. Try to reduce the number of steps, the flexibility of each step, and the time and quality of each step.

    At a minimum, this exercise will allow you to identify the major bottlenecks in your organization and identify what is slowing you down or reducing your flexibility to adapt. What you are looking for through this analysis process is to identify improvements that can increase the “mechanical” agility of your business relative to your competition. Perhaps new disruptive technologies can completely transform your manufacturing process. For example, with the constant influx of new manageable and resilient materials, 3D printers will continue to disrupt the manufacturing processes of many manufacturing companies.

    This exercise will also allow you to identify opportunities to optimize your cost structure, which automatically makes your business more competitive by making it more profitable.

  3. The strategic angle: knowing what we want and what can be

    The previous two steps may have placed you in front of a somewhat harsh, even sometimes discouraging, picture. But rest assured, no organization is perfect, and it all comes down to the ability to implement a continuous improvement process in your business.

    That said, the key remains in defining an action plan that prioritizes actions with the greater lever for improvement (what we want), but which also aligns with actions that the company can put in place and successfully completed (what can be), its ability to move from theory to practice.

    Any project, internal improvement or other types, has its starting point A and its ending point B. Between the two is a set of resources (time, dollars, tools, methods, itinerary, etc.) placed in an integrated and well-thought-out logistic to move from A to B.

    An important trap to avoid here is to know where the most common mistake in business is.

    Regarding point A! A majority of companies design game plans based on a wrong starting point that does not correspond to the reality of their company in terms of its ability, both in expertise and time, to achieve their action plan.

    To make you grasp the indirectly apparent trap here, let’s take a caricature: you are being asked to go to Boston. Nothing complicated for you. You go by car to make two or three intermediate stops, you plan your route, you plan the money needed, you pack your bags, etc., everything is beautiful.

    Do you realize that all your preparations (your action plan) could be very wrong without a precise and fixed starting point? Driving from Montreal to Boston is one thing, but if you’re planning a trip to Vancouver before your trip to Boston, the game plan has changed!

    In short, the simplistic analogy must be seen in all the importance of fully grasping and understanding where one is starting from when tackling an organizational change project.

    Humans love to dream and plan for the future, and that’s delighting. But since it is often difficult, not instinctive, to properly evaluate ourselves, think of the adage “We don’t know what we don’t know”, it is very easy to overestimate our ability to achieve a project by underestimating our starting point.

    Sometimes, the organizational gap between the “Will” and the “Can” of a project can be large enough that its realization is almost impossible, if not unless you have colossal financial means to compensate for the gaps present.

    In short, to make a business shift, make sure you select projects that meet the organizational capabilities of your business by carefully assessing your starting point.

    As it is always a pleasure to share and discuss management with all of you, please send me your comments or suggestions for subjects that you would like me to discuss in the future.

Good management!

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