Alan Miltz, Founder of Cash Flow Story, Christo Popov, Founder and CEO of Fast Track, Gene Browne, Founder and CEO of The City Bin Co, shared their insights with us on our recent webinar 5 Practical Steps to Turn the Crisis into an Advantage. Here’s the summary of some of the key points they discussed.
The COVID-19 pandemic has crippled businesses due to the lockdown mandates. Whether large or small, most enterprises are scrambling to stay functional and relevant during this crisis. Only a few smart companies have taken advantage of the changes brought by this pandemic by viewing it as a huge opportunity. Thus, the question becomes: Who are these companies and what are their characteristics?
These are the companies that have already begun to modify their status quo. Rather than reacting to the COVID-19 crisis, these innovators have adopted some common proactive strategies to position themselves to emerge stronger than ever. Here are the key strategies implemented by these companies to not only survive but thrive during this crisis.
#1 Simplify the complex cash flows
Alan Miltz recently said, “Revenue is vanity, profit is sanity and cash is king.”
Cash is everything. It is the driving force of every company and is therefore crucial to understand the end-to-end flow of cash to stay abreast of the changes brought to it.
Start by focusing on simplifying & streamlining your company to promote agility. Complex processes can slow down information flows & decision-making, significantly impeding your ability to move dynamically. Evaluate theimportant levers for your company by asking:
- How many changes can you make in your business to improve your profit and cash flow?
- Which products can you change your prices to get volume movements?
- How can you improve your cost of manufacturing or purchasing cost line by line?
- Where can you have an overhead improvement?
Then pick each of these levers, rank it from the most important to the least important. You will have better control over cash flow & finances.
#2 Keep the focus on the consumer
Despite COVID-19 disruptions, consumer behavior (like human nature) has not changed. Human nature has been the same for the last 5,000 years and will remain the same for the next 5,000 years. Some of our habits may change, customers may start ordering more online, but the primary decision-making elements within humans will remain the same.
It is more important than ever to hone in on consumer behavior & prioritize customer satisfaction.
Peter Drucker has said, “The purpose of a business is to create and keep a customer. The driver is still the consumer. And the consumer has some needs that the people in the supply chain are not able to satisfy. If you identify a consumer need that the market is not able to satisfy, go for it, even if it is not your core business at the moment.”
#3 Every company should become a software company
According to the CEO of Microsoft, Satya Nadella, “Every company is a software company. You must start thinking and operating like a digital company. It’s no longer just about procuring one solution and deploying one. It’s not about one simple software solution. It’s really you yourself thinking of your own future as a digital company.”
Post-COVID-19, we expect to see every company become a software company. Prioritizing a data-first approach has been the key differentiator of successful, innovative companies- regardless of industry.
Build up a solid network of data analysts within your company. Data analytics and artificial intelligence represent the future of business intelligence. The pandemic has paved the way for accelerated technology integration – all you need to do is use this opportunity to your advantage.
#4 Reimagine your business
According to the Einstein Sync Speed concept, you only slow down compared to other objects moving at the same time. Applying this to your business, its critical to stop comparing your growth against your past metrics. But rather focus on how you compare against other players in your industry in the present.
With COVID-19, everything is rapidly changing everywhere and at the same time, creating a huge impact on businesses. Imagine an airplane in the air that needs a refill when it is on the move. This is how challenging it used to be when businesses were operating on full throttle. Now imagine circumventing the same issue when the airplane is grounded. Every business should view this setback as a unique opportunity to dismantle the pieces of the plane and fix the crux of the issue in the system that created the fuel leak in the first place. In other words, this is the time to forget about coming up with short term fixes to temporarily clog problems and create a truly resilient business that is future proof by identifying the holes in the business model.
The questions you need to be asking now is – Can I improve any part of my business? Can I simplify it? Can I make it more efficient? In the bid to dismantle and improve, you will end up creating a well-oiled efficient machine.
#5 Upskill your employees
The mandatory lockdown represents a great opportunity to upskill your workforce. While employees are stuck at home, set aside time to train and take advantage of numerous virtual learning opportunities available. During the 2008-9 economic crisis, enterprise companies found great results by investing in & upskilling their existing workforce. This human investment will pay off, leaving your company well-primed for the future.
#6 Streamline communication
Clear and fast communication ought to be a priority on all fronts. Lack of communication will only complicate an already stressful crisis. The fewer unexpected surprises, the more likely people will be cooperative- leaving you in a better position to steer your business.
The speed of communication today is critical. Whether B2B or B2C,foresighted companies are making faster communication their number 1 priority. With remote work being the new normal, teams that can communicate faster are more aligned & more efficient. This leads to faster decisions, faster innovation, and faster evolution.
How do I Implement these measures?
Businesses need to build 3 distinct kinds of teams if they wish to fully embrace these points.
Team 1 – The Fire Brigade
Responsible for cash & survival, this team’s job is to maintain your day-to-day business by delivering what customers want and minimizing expenses.
Team 2 – The Army
This team needs to focus on optimizing the existing business model and improve its efficiency & functionality, while continuing to operate at existing scale.
Team 3 – The Moonwalkers
This team’s primary objective is to kill your existing business model by inventing a better one in pursuit of growth. Although this is a broad goal, this is arguably the most valuable team for longevity & competitiveness.
The key factor to success is to look at the challenges of COVID-19 as opportunities rather than obstacles. The true economic potential of businesses is yet to be fully realized. Innovative companies that embrace digital transformation, prioritize agility, and demonstrate increasing growth will be set apart, giving themselves a head-start once the COVID-19 crisis comes to an end.