By Greg Backlund, Executive Consultant, Operations Improvement
An interesting way to consider business issues is to compare the economy to living ecosystems. Millions of years of survival testing provides a lot of success and failure examples!
The current Covid disruption is likely to be a major ’extinction event’ for many businesses – unfortunately, probably, many businesses will go bankrupt or have to drastically restructure. In the previous major Earth extinctions, dramatically different new players came forth to succeed and even dominate their world.
A fascinating recent Wall Street Journal article by Drs. Stephanie A. Ferhaber and Alyssa Y. Stark is “To Survive the Pandemic, Entrepreneurs Might Try Learning from Nature.”1
Some wildly creative, free-thinking, or maybe even desperate ideas may enable unexpectedly powerful survival and success options:
- Find new growth opportunities that now open up – move outside regular niches, try new / related offerings, connection methods. If some previously formidable competitors have been killed or weakened, your products or delivery channels could be expanded to capture some of the now available “sunlight.”
- Even if the business has been ‘chopped off at the trunk,’ then recognize and build on your remaining ‘root system:’ skills, facilities, loyal employees, contacts, trademarks, patents, and other key assets.
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- Strategists often challenge organizations to clarify and promote their “core competencies” – their root system that could support rapid regrowth, if channeled creatively. Regrow in new directions, try out new branches, build on the wisdom gained from previous gains and setbacks.
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- A core organizational culture element is the set of fundamental beliefs about life, business, human beings, etc. that the organization and its leaders hold. Often organizations have developed some strategic beliefs about themselves, like: “We can’t succeed in market X;” but maybe that belief was formed from a previous failure. Maybe that initiative just wasn’t executed well, or the timing wasn’t right. It might be time to retest that belief in the new environment, perhaps with new leaders, new techniques.
- When things are all stirred up, look for new chances to be the predator, or be a newly-willing prey - acquire or be acquired, and build forward. Bigger or better capitalized organizations can snap up organizations, assets, people from the wreckage. Smaller/weaker entities may want to swallow their pride, clarify and polish up their remaining assets, find buyers, and move on to a new life chapter.
- Scavenge – find the scraps available in the wreckage and build from those resources in new ways - newly available workers, facilities, equipment, ideas. Scavengers can do very well! Downsize to a smaller facility the owner is desperate to rent out. Buy up dead domain names. Find sharp techies who lost their gig. Even eagles do well on belly-up treats!
- Start off in a whole new direction. That last thing is toast – got a new idea?
Whew, OK, now on to operationalize the new directions:
- Realistically reset sales forecasts, with ranges of expected / optimistic / pessimistic sales scenarios, set per various potential phases and timing of post-Covid recoveries. Various businesses may have very different trajectories: many at very low sales volumes; some at high growth. We know of some businesses that are showing amazingly high growth in their traditional lines; some that have transitioned, at least for now, to serving immediate demands like masks, gowns, tests; others that are heading off in major new directions.
- Project the new workloads, staffing, capacity needs, develop implementation plans and execute them. Flexibly reassign staff to get it done.
- Rightsizing reviews – realistically assess needs for major consolidations, cost reductions, overhead resets. Be kind, be wise, but get it done and move on.
Big challenges, big opportunities – here we go! Platinum Group can help you with the ideas and resources you need to get there.
1 https://www.wsj.com/articles/to-survive-the-pandemic-entrepreneurs-might-try-learning-from-nature-11588986419
(Requires paywall access.)