In a previous post, over a month ago, I discussed the need for our federal government to forge a National Coronavirus Strategy. Here, I want to focus on how to adjust your strategy as a business leader given COVID-19.
In my upcoming book, Strategy First, chapter 5 is titled “Adapt to the Tides.” Sometimes, what separates competitors is how quickly they adapt to the tides—that is, how a company understands what’s going on in the outside world and decides how those “tides” will impact their strategy.
Unfortunately, the COVID-19 pandemic is more than just a tide. These are no small waves. COVID-19 is a tsunami, that will destroy countless businesses outright.
When it comes to the COVID Tsunami, many businesses will find adapting to be extraordinarily difficult, while others will find it outright impossible. Still, we must forge on, and for those who have a chance to adapt, this post will provide pertinent strategy recommendations.
I will break this post into two parts. Part I is about now and the short term. Part II will cover longer-term strategy.
As I discuss in my book, luck impacts strategy success. For a fortunate set of companies, such as Domino’s, Pizza Hut, Amazon, DocuSign, Netflix, DoorDash, Peleton, Zoom and others, the pandemic actually helps their business. Products like Microsoft Teams, or baking flour, or webcams are selling like hotcakes. But these are the fortunate few. For most, COVID-19 is simply very unlucky, bringing a catastrophic crushing of revenue and profits. As everyone knows, restaurants, brick and mortar retail, entertainment, sports, travel, and countless other businesses are scrambling with few, if any, options.
And even if your business has some options to keep going, life is complicated by stay at home orders, supply chain disruptions, the high costs of keeping employees hired and healthy, other high overhead costs, and poor national leadership.
But I do have some recommendations that will help some businesses in the short term.
The first question to ask during the pandemic is the most obvious one. What can your business do in the short term to still provide customer value relative to the competition? My gym is now offering workout classes on-line. Companies of all sizes are moving their business to the web, adjusting business models, focusing on different products, offering new services and so on to adjust to the changing needs of their customers. If you are one of the major sporting leagues, you are exploring alternatives like games with no fans or limited fans, adjusting schedules and more, so at least you can play games soon and earn TV revenue.
Another tactic is to try and shift or add new customers to bolster market potential. For example, you may be a local bookstore, but you can sell books anywhere online and have probably strengthened your online selling capabilities because of the pandemic. You can think about a mailing list to acquire, advertising to run, or a marketing plan to broaden your target customers. My wife and I live extremely close to Seattle. While we loved to go into the city, we almost never went into Seattle for take-out because of heavy traffic. Now, with traffic reduced, we can pop in the city in just over 10 minutes. We are a new set of customers for Seattle restaurants offering take out. During the last month or so, I have been pitched by many new businesses and nonprofits via video conferences as they reach out to new potential customers or donors.
The short-term response is about being scrappy and creative to keep business going. It’s also about being ready to restart as soon as the economy starts to open up. Clearly this is another reason why you see businesses reducing costs and investing in digital where they can. If you achieve that, then you have a chance to stay afloat in the COVID Tsunami. But to be ready as the economy opens up also means knowing where you want to go. Read part II for recommendations for longer term strategy during the COVID Tsunami.