In general we humans aren’t great at dealing with change, even though we claim to like new things in our lives. Not really. We like the certainty of the same things in the same place, every day. New stuff is maybe for the two weeks we go on vacation, right?
So the global situation we now find ourselves in is profoundly upsetting for the vast majority of people. Businesses are being rocked to their foundations, because businesses are about people, and rely on people. In a matter of weeks, free movement of people around the world has almost ceased, and the knock-on effects of that grow worse day on day. But I guess you don’t need me to tell you this, because we are all living through it.
In a survey I have just run, asking businesses to comment on the challenges and changes they are going through as a result of the pandemic, the number one fear was around the business going broke, game over.
The number two fear was around liquidity, and having enough cash just to keep going. When car manufacturers are shutting down, and airlines are grounding their fleets, it’s understandable that smaller businesses feel that they too are facing existential threats. They’re right to feel that, if they bow down to the change which is being forced on them.
My job is to show you that change can be controlled, and that there are even benefits to be extracted from our current situation. I can’t do that in one short article of course, but I can give a few pointers. It’s not as simple as ‘going with the flow’ because that would be too easy! In fact everything I’m currently suggesting to clients is very much about not just accepting the situation, but flexing, changing, and adapting.
I can give you the example of my own experience after the financial crisis of 2007-8, when large multi-national suddenly found that their marketing and comms budgets were cut to the bone. I was in the right place, at the right time, with the right low cost digital offerings, and suddenly my agency was doing really well, while bigger more expensive outfits went to the wall. There’s always someone who will leverage difficulties and turn them into opportunities. That’s the most important work that company leaders must address right now. Don’t wait for ‘things to get better’. By then whatever liquidity your company had will likely have dribbled away. Plus we’re talking about profound changes that will affect us for the next decade, so waiting for everything to return to normal isn’t going to cut it. Even after the crisis reduces, things will not be ‘normal’, so don’t expect your own market to bounce back any time soon.
This means that in order to confront change, your business must change. If your biggest worry is about your business going bust, then extremely clear thinking is needed. Question 1: Are the changes I am facing temporary or permanent? Even refining the problem to that binary state will help clarify where you stand, and reduce the constant whirring of your brain about the survival of the company. If the answer is ‘temporary’, then you need to work on the short-term fixes, such as laying off staff (preferably on a voluntary, unpaid holiday basis), reducing or simplifying inventory, and re-negotiating contracts with suppliers. None of this is fun, or easy. All of this goes very much better if you are clear about your own goals, and spend the time communicating properly with your various stakeholders. So, if you define the problems as temporary, take the temporary measures which will help you ride out the storm. And do them soon.
If the problems are permanent, then you really are in a fight to change, and change fast enough to survive. Take for example the airline industry, with the drop-down travel and hospitality industries. What will an airline do if only a fraction of passengers return to it after the crisis? Or a hotel, or travel company? My observation and advice: Don’t wait for the hammer to fall, get thinking, very creatively! There will be solutions. Not for every business, but the inventive ones which embrace change will make it through.
The second great worry in my survey of companies was liquidity, or lack of it. Very few companies are sitting on a cash mountain to see them through tough times. Startups and new businesses often live from week to week. So preserving some liquidity is essential, and most companies do this by the sort of measures I’ve already mentioned, like cutting staff, or asking people to work from home.
However there are examples of companies working to increase their liquidity through income, even in these troubled times. One example is of a business I know which relies on Spring seasonal sales to make most of its profit for the year. However this season the business is closed to the public by the coronavirus outbreak. The management did some agile thinking however and came up with the creative idea of selling discounted vouchers now, for their products next Spring. They have therefore created some liquidity, and at the same time done some great dialoging with their customers. Talking to all your stakeholders is a key feature of managing change.
I also like the fact that Amazon and other online retailers have seen a large rise in ordering because so many people are quarantined or self-isolated at home. The problem was that there weren’t enough delivery drivers to fulfil the orders. That is until someone realized that there are many Lyft and Uber drivers who now lack passengers, but are very happy to run packages. Win-win.
For my own part in all this macro change, I’ve put aside all other projects for the time being, and my team and I are concentrating our firepower on coming up with answers about Learning To Change. So far we have some comprehensive and exciting solutions, both in the form of a guide, and as a Webinar (we’ll be presenting the latter very soon).
Click here to download The #1 Rule for Inevitable Success Learn to Change.
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