What do courageous leaders do in times of jaw-dropping uncertainty? They set a vision, make strategic decisions, align teams, and communicate. Our responsibilities didn’t change when the global pandemic hit — when we began to realize just how unpredictable the world is.
Decision Making with Conviction
Despite all the tantalizing forces pushing toward states of paralysis and denial, an increasing number of leaders are settling into this time by embracing a new reality. They recognize that the present and the short, medium, and long-term futures are highly uncertain. They are making decisions with conviction – and finding the areas where bold action is warranted.
Now that employees are working from home, cash runways are managed as much as possible, and businesses are tuned to this fits-and-starts moment, where are the most advanced leaders focused? On no-regrets moves – actions that make sense in any future – as well as on bigger bets that are tied to clear signals from the world they don’t control.
Here is a set of no-regrets moves we see companies take across industries. While you are likely to have some that are highly specific to your situation, these eight moves tend to be applicable across the board. Of course, all of these moves have a cost associated with them. The question for leaders is, will they provide a disproportionate advantage for your business?
1. Go direct to customers
With the retail shutdown, businesses gained permission to connect with their customers more directly. PepsiCo’s new site, Snacks.com, is an example of a large company circumnavigating traditional supermarket channels to sell their product directly to consumers. Over the long-term, this reduces costs and allows Pepsi significantly more customer data and intimacy, a goal that was in place long before coronavirus. How might you get closer to your customers during this time?
2. Focus marketing on stability, care, and resilience
The tenor of marketing has changed, and it’s essential to stay attuned. Companies that remain tone-deaf by continuing to deliver messaging that is too self-serving will drive customers away. A movie studio promoting darker themes re-calibrated its marketing at the outset of the pandemic to bring hope and inspiration to American movie audiences. A B2B software company that focused its messaging on growth and technology innovation during the bull market has re-tooled its selling points around stability, resiliency, and cost savings. Is your positioning well aligned with the needs and sentiment of today’s marketplace and robust enough to evolve as times change?
3. Invest in landing new customers
While some businesses are targeting incremental revenue from existing customers as they reduce customer acquisition spend, several enterprise software companies are taking the opposite stance. By offering solutions to problems consumers are facing – in the form of extended payment terms, price reductions, and other arrangements – these companies are taking business from less-resourced competitors. They will ultimately emerge from this crisis in a stronger market position. This strategy’s second punch will be an M&A spree of those companies who retrenched. How can you best ensure that you are seeding the future growth of your business and positioning your organization to end up on the right side of the buying spree that will emerge?
4. Accelerate business model transformation
Where there’s an impending need, organizations that have been contemplating a business model shift are using this moment to accelerate the change, and frequently leveraging technology and the cloud to help them. One example is Southern New Hampshire University (SNHU). As pressure has mounted on private universities over the past decade due to increased tuition costs, inequitable access, and a wholesale questioning of the value of four-year degrees, SNHU announced it would no longer accept students to its traditional campus programs. They are offering 100% tuition scholarship for online degrees, thus making themselves more affordable than many public four year colleges. This bold move accelerates a migration plan they had in place by several years. In a poignant note, SNHU President Paul LeBlanc called this a “burn the boats” moment. We see similar shifts in the technology sector, where these companies are taking this moment to accelerate their shift to the cloud, moving from selling products to services, and benefiting from the recurring revenue models to go with that shift. Are there opportunities to advance your technological journey to support future growth while meeting the cost containment demands of today?
5. Follow the money
For the most part, sales teams are targeting industries expected to emerge from the crisis as winners, such as technology, pharma, and government and moving away from (or betting on the most prominent consolidators/premium players in) travel, education, and real estate. They’re focusing more on big, stable, and resourced companies and less on small and medium-sized businesses. And, they’re shifting geographically too, to diversify their risks as the pandemic continues its varied path of impact around the globe. Are you able to effectively capture the growing white space in the SMB segment or positioned to win with the largest companies who matter most?
6. Build supply chains that are resilient to disruption
Efficiency often comes at the cost of resiliency. In a volatile environment, with a significant risk of delays, tariffs, and potential trade wars, businesses are building more redundancy and flexibility into their supply chains. A food importer who sells branded products in supermarkets is shoring up supplies from multiple countries, ramping production, and building inventory to keep their products moving. Sales are up 300%. Other large organizations are turning to automation to address the risks of having humans onsite and the potential supply chain shutdowns that can incur if teams get sick or are locked down again. How effectively can your company deliver if the pandemic sustains well into 2021?
7. Decentralize spans of control
As Mayors have usurped political capital, there’s a similar shift toward localization in corporate decision making. One global retailer is empowering its store managers to work directly with local governments, shopping malls, and nearby communities to meet needs and develop creative solutions for re-engaging in commerce. This move will undoubtedly lead to new products, services, and opportunities for this progressive retailer. How will you leverage decentralization to improve your agility and optimize your business to local conditions given the pandemic?
8. Optimize your virtualized business
Just as companies are getting accustomed to collaborating remotely, sales teams are figuring out new virtual sales motions, educators are creating long-term learning modalities, and restaurateurs are developing new safe-haven concepts. A global commercial real estate company is launching a new hybrid e-commerce/virtual shopping experience that was in the works long before coronavirus. The winners in the virtual world are rethinking “how” they do what they do. Moving traditional business approaches into video calls is a short term bandaid. How are you rethinking the virtual world to your advantage versus being held back by its constraints?
Companies that emerge more strongly will have thoughtfully approached scenario planning. Indeed, in these most uncertain days, the only thing that can be counted on is that nothing is guaranteed. But employing a scenario planning strategy will help companies prepare for any number of possible futures.
An Enterprise Software Company’s Approach
Puppet, an industry-leading software automation company, used scenario planning to develop a robust coronavirus response strategy, including a set of customized no-regrets moves. As soon as the pandemic hit, Puppet’s CEO Yvonne Wassenaar challenged her executive team:
“We need to understand what this means for our customers – what will technology leaders such as VPs of Infrastructure and Automation, CTOs, engineering leaders, and CIOs need to enable their companies to survive these uncertain times and be positioned as leaders in their industries regardless of what emerges from this crisis?”
After defining four potential future scenarios and what they would mean for Puppet’s customers and their operations, the leadership team designed a bold strategy. According to Wassenaar, they immediately refined their product roadmap to support their large enterprise customers’ most advanced security and remote network needs.
They shifted their marketing investments and tailored their messages to best resonate with relevant current day customer challenges. Puppet shifted its go-to-market model and prepared its workforce for a long-term virtual reality, including accelerating the build-out of remote services and investing in employee home offices. In recognition that some of their strategic choices are dependent on which future they’ll face, Wassenaar created a set of external triggers that will evoke strategies as they evolve. For example, if the economy grows by a certain percent, they anticipate an uptick in business digitalization and the mass adoption of DevOps, which will trigger an increased investment in their cloud-native efforts.
Wassenaar and her team found so much value in the scenario planning process they now provide a technology-centric version of the open-source toolkit for their customers. They’re helping Puppet customers identify no-regret moves that enable action today and set the foundation for future success as any number of potential futures emerge.
Many of these no-regrets moves and strategies were imagined well before the pandemic and are universally good ones to consider. Their boldness comes from a conviction to act – to respond proactively to the market, business models, and related pressures that may have already been there. As humanity, we may lack clarity for what is on the horizon, but as business leaders, we can – and must – make plans with confidence that we have considered a broad range of possible futures. Perhaps leaders are merely following the sage advice of Winston Churchill, “Never let a good crisis go to waste.”