We are entering a time of change and global uncertainty, dare I say a 2020 recession, where management needs to be overtaken by leadership. In an era of serial entrepreneurs this should be easy; born searching for change. The opportunity has come to respond to and exploit it.
Dear start-up CEO: Your time has come
Every day, the global death count is ticking a little higher with health authorities rationing COVID-19 tests. Spain’s 47 million residents started staying at home even before lockdown was officially announced.
As a leader, it’s more important than ever you have a plan. With a plan, you can display much of what we need. You will instil courage and solidarity in your anxious team, inspire clients through our company’s collective strength, care and unbending stubborn joy. Emerging on the other side unscathed.
Dear CEO, there are several ways you can respond to this crisis. Either you dismiss the fear disseminated throughout your company or turn this into an opportunity for growth and redirection, action and communication. A well thought out plan will not only sooth our anxious hearts but charge us with energy and devotion.
1. Act fast; The key to effective decision making
Don’t be afraid, you are not alone. As Peter Drucker once put it:
Whenever you see a successful business, someone once made a courageous decision.
Our 2020 forecast was based on an optimistic worldview, there was no “global pandemic” section to our 2020 financial planning sheet. The coronavirus spread has called for new plans. Clear out the entire document and start on a blank page. China, then Europe and now, slowly the US is moving towards global uncertainty. There’s no need for a new polished document, just a roadmap we can adjust with smaller course corrections and manoeuvres.
How about a daily war meeting for us to gather information? We need to be able to quickly realign our forecast. By pulling us all in, you make us agile when faced with making quick decisions regarding the coronavirus’ impact on our business.
Our first meeting really needs to address business operations and supply chain impact. With lower capacity, do we know how the distribution of our products and suppliers will be affected?
Let’s learn from the past. The coronavirus has taken China, Iran and the EU. Very much the same path the Black Death took: the old Silk Road and the new Chinese belt. Many people are getting sick globally- with and without public healthcare. The next step as it spreads will probably be through much of the US. Ideally were overreacting but it’s time to ensure we are not. May I suggest we work remote.
No matter how this shakes out, when we’re done with the coronavirus spread, when ‘how to handle a pandemic’ is no longer the huge threat to humanity, our community is likely to be more wary of economically integrating with others and more likely to undergo a digital transformation. This is a very striking observation.
We need to establish a remote work option with reduced meetings and travel. It is important we send employees home to work remotely. Many countries are implementing social-distancing and self-isolating policies, so remote work seems like the safest and most reasonable thing to do. Realistically, most employees are probably sat in the office scared of becoming infected, anyway, so productivity has already dropped. Let’s help, implement a work-from-home policy before anyone starts calling in sick or become scared to show up at all.
This policy will give employees flexibility. Schools, offices, stores and commerce across the country in general are closing. This slow movement towards a recession and gradual lockdown means that we need to be flexible. Some team members may find that their child’s day-care closes. Others may have elder students at home worrying about how they are going to pass their trimester and get into Uni. We need to show our investors that our company is as understanding as possible when something comes up and that we have a contingency plan in the event the coronavirus spreads and we suddenly become short-staffed.
The most important thing in communication is to hear what isn’t being said.Peter Drucker
With all the daily challenges, it is only natural this one might slip your mind, but don’t forget to communicate. We need you to be our eyes and ears. Communicate with us, with our customers and our investors, in fact, overcommunicate so we can follow your lead.
This ongoing crisis, where we will be subject to remote work and self-isolation will only become a cause for concern if we forget to communicate, a lot. These turbulent times will call for different levels of communication to those we have been using in the past.
This is why a daily war meeting will be important in navigating our way out of the coronavirus impact on our business. It’s important we take the time to address individual team members directly and as needed as well as address all insecurities. Don’t worry about repeating yourself, you will have to.
Customers empathize with brands facing a crisis, let’s work with this. As long as we communicate with them properly, as long as we take the time to communicate thoroughly and explain how we will handle our services and restrictions, our customers will stand by us. Everyone is facing this crisis together, it’s important we stay transparent about what we are going through.
5. Enthusiasm & Motivation
“We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn.”Peter Drucker
Global uncertainty calls for innovation, teamwork and finding ways to collectively move forward. Psychology specifically depicts the need for human interaction and positive reinforcement as being prime factors in motivation. This reinforcement provides not only connectedness but the illusion of being in control, resulting in better results.
A 2019 Buffer survey demonstrated the importance of enthusiasm among employees. Two of the top three struggles cited by remote employees are loneliness and communication/collaboration issues, followed closely by motivation. Provide us with the tools to stay connected. Teach us how to stay connected, motivated and productive.
6. Set Clear Goals
The purpose of a business is to create a customer. The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.Peter Drucker
It’s time to shift our sales strategy online
While it might seem callous to say so, crises offer the opportunity for growth. Chinese companies have provided us with a blueprint for weathering this storm. Savvy business owners shifted their sales strategy to avoid heavy losses and this is what we too must do.
The Wuhan cosmetics company Lin Qingxuan closed 40% of its high street stores due to the coronavirus spread but the brand achieved 200% growth thanks to shifting its sales strategy online sales. Its +100 beauty advisors engaged customers virtually through digital platforms like WeChat and social media.
We need to avoid customer acquisition costs soaring through the roof over the next days and weeks. It is also important that we keep an eye on customer churn to avoid lower customer lifetime values. Let’s watch both metrics meticulously in our war room meetings. In the light of events we need to adjust our spending according to this new reality, I feel that increasing marketing budgets and generating more revenues might work out rather that saving what we have only to extend the pain.
Do we have any funds waiting to be unlocked? Let’s use time to our advantage and free up what we can.
7. Get Organised
“Efficiency is doing better what is already being done.”Peter Drucker
This year we presented three scenarios to our investors: 1) best case; 2) average case; and 3) worst case. Let’s face it, “best case” means growing revenues and is the 2020 plan we just dumped. In the face of a 2020 recession, today’s “best case” perhaps means steady revenues and our “worst case” would be some degree of revenue declines.
Dear CEO, at this point, you might be having an “oh shit” moment. Welcome to the part that sucks most about your job. We don’t need you to figure out the best option anymore. We now need you to avoid the worst option.
The 2008/2009 financial crisis introduced a 50% fall in venture capital investments. It took over two years before funding returned. We need a realistic picture of whether our investors can and will invest or not. History and statistics show us that most of them effectively won’t.
8. Confident vs Optimistic
“Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.”Peter Drucker
But let’s face it, we are at the forefront of a global recession if we don’t move fast. Petrol prices have plummeted and with-it airline stock at a time they should be rejoicing over heightened fuel prices. Instead, the coronavirus is rippling through our global markets plunging us into lockdown and states of emergency.
The psychological burden of global uncertainty, quarantine lockdowns and coronavirus spread will undoubtedly impact consumer behaviour.
Focus on the most common action steps to preserve and pull in liquidity in times of crisis. It won’t be easy: A lot of other companies are in the same situation as we are, so acting quickly and decisively is paramount.
In the coming months, as we head towards a possible recession, our start-up is going to be more reliant than ever on a digital strategy. We are as fragile as a dream. Prepare, act calmly but decisively and respect us at all moments. I don’t want to sound alarming but, this may indeed be the deciding factor in whether we make it through these tough times ahead, or not. And of course, our shifting to a digital strategy will also make us more resilient for the future.
There is no silver bullet, no ‘how to handle a pandemic’ manual, what we have are a lot of unanswered questions. Strong brands will recover quicker than weak ones.
Dear CEO, the key to resilience is to ensure that we develop an ongoing contingency that will protect against loss. Suspend your own viewpoint and put our customers’ needs first. How might they expect our brand to respond? What can our brand do to improve its relevance in a time of need?
Your loyal employee
“The best way to predict the future is create it.”Peter Drucker