We are hearing so much negative news about Covid-19, and it seems to be accelerating (both the negative news as well as the active cases and deaths, unfortunately). And it is very important to take advice delivered by public health professionals and infectious disease specialists very seriously (and maybe ignore some of the chatter from politicians whose expertise is far from relevant to medical crises).
But once you have done that, how do you process the waterfalls of negativity? Covid-19 is spreading like an Australian wildfire; mortality rates in Italy are seemingly trying to compete with those in Wuhan like it’s an Olympic event; stock markets hitting numbers that are only fascinating to historians and probably archeologists by now; and, oil prices are plumbing depths seemingly in sympathy with abandoned Alberta oil wells. Wow.
So how do you cope? Well, there are two options, both assuming you are not personally infected by Covid-19, or you’re not caring for someone who is. In those cases you have your hands full, and are most likely not reading this blog anyway. You are the people many of us are thinking about and praying for.
But if you are not in that serious a situation, one option is to do what Sigfried ordered everyone to do on that old episode of Get Smart: “Okay everybody. Now, PANIC!!!” If you choose that option, you better run out and line up at a grocery store right now and get into a fist fight over the last remaining roll of toilet paper. And then…well, I don’t know. I am not one prone to panicking, so can’t give you much advice here.
You do have another option
You can look at this as a period of opportunity, both on the business area of your life, and the personal one. And my point here is that you absolutely have that choice. That is the one thing you have the freedom to do, even if you lose all the other so called freedoms. I learned that from reading Viktor Frankl’s mind-blowing book, Man’s Search for Meaning. Don’t take my word for it. Read his incredible tale of survival in Auschwitz, and take his.
So, if you’re running a business, how can you look at this as an opportunity? There are couple of ways, provided you don’t have one of those businesses that is very heavily leveraged. If that is your situation, well you’re probably already doing what you need to do, which is likely having frequent conference calls with your creditors. Being a business owner myself and having stared over the abyss myself before, good luck, and my sympathies are with you.
However, let’s assume you are not in that dire of a situation. Then you may be contemplating downsizing. But before you do that, consider this: it is very likely that your competitors, and businesses in markets you have not tapped yet, are also thinking of scaling back.
Now, consider one more thing: visualize yourself as a truly successful investor. That means you are very likely a contrarian. Successful investors invest when everyone else is selling, or exiting, or scaling back. If you took that tack, how would you approach this situation?
Lessons from 20 Years of Experience
Let me fill you in on a truth learned from over 20 years of organizational change management: the worst possible time to invest in implementing and ERP system (or optimizing enterprise-wide processes, or re-organizing to break into new markets), is when you’re growing like crazy. That is when your people are already busy trying to just keep up with their growing workloads.
Plus, additional resources are hard to come by because everyone has a job somewhere else already. Finally, everything you want is expensive. And yet, that is when most companies invest in this kind of business transformation.
Small wonder that so many of these projects are so painful.
I have also been involved in transformations led by really savvy leaders who transformed their business during downturns. I can tell you from first-hand, personal experience, those transformations had the best outcomes. People were not as busy and had time to dedicate to project activities. They applied themselves to tasks as if their jobs depended on it, which often they did. If they needed additional resources, they just had to shake the recruiter trees and they had an abundance of great candidates to choose from. And everything they wanted to buy was at least 20% off, or more.
Doesn’t that sound ideal? Well, we’re in that kind of situation right now! Things may not be quite as cheap in your industry yet, but just give it a bit of time. And while you’re waiting, start planning – there is no time to waste. Because at some point, as that famous adage goes, “this, too, shall pass”. The tide will come back in. And then you better not miss that rising boat.
Here are some thought exercises for this first type of opportunity.
First, take a look at your processes, and ask yourself the question:
“If we suddenly had to double our capacity, could we do it?”
That is not a theoretical question. If your business survives, and some of your competitors don’t, that could very well be your situation. This may be the exact best time to invest in a project team with contract project managers, business process analysts, and change management leads to work with your staff.
Second, take a look at your technology, and ask yourself the question:
“Are our systems well connected to suddenly handle a spike in capacity?”
This, too, is not an idle question. Look at any business who survived a downturn and check out how quickly they had to meet surging demand. You can lose a lot of business if you’re not properly equipped. Again, this could be a perfect time for you to consider a new ERP solution for your business, or an upgrade to your current one. If you want to keep infrastructure expenses low, there are cloud solutions like Oracle’s available.
Besides helping you get ready for the soon-to-be future, think of the many additional benefits these strategic initiatives will bring to your business.
There will be extra work to keep your staff busy as other activities slow down.
Contract experts are a great way to build new capability within your teams. That busy-ness that your staff experiences, together with the new knowledge and ideas, will take their minds from wandering down deep and scary rabbit warrens of existential anxiety and even panic.
And, perhaps most importantly, you are sending a signal to your staff (and your clients!), “We are not going away! We are investing because we are going to be growing in the future. We’ll be here, long after others are gone. You want to stay with us!”
If you are a business leader in your company and are not at least actively considering and talking about this scenario, well, this may be the time for you practice responsible leadership.
Second Type of Opportunity
If you have considered this, you may still reach the conclusion that you are not in a position to make this investment. Maybe you are not excessively leveraged, but you have decided that retrenchment is the right option for you. This is a tough conclusion to reach, but you can still do this in a way to come out ahead better later on, once this thing blows over.
One thing you most likely are considering is downsizing your workforce. That will be tough, but there is a smart way to do this so that you actually build your brand and prepare your company for growth once the economy improves. This is the second way of looking at this as an opportunity.
Here is the thinking you have to go through.
First of all, the worst possible thing you can do is just decide to “get rid of 10% (or more) of your workforce”. That’s like using a meat cleaver for neurosurgery. Your patient just might survive, but they will “never be the same again” if they do. Frederick Reichheld wrote a phenomenal book many years ago called The Loyalty Effect that looked at how companies fared after the disastrous Process Reengineering craze of the late 90’s. He doesn’t paint a pretty picture.
Many that used this meat cleaver approach eventually lost significant market value long term, folded, or were bought out, and for a very good reason: they got rid of their great employees along with the chaff. How can you possibly rebuild a great company without great people? The answer is, you can’t.
Here is the thought process we guide our clients through in these situations. There is a lot more to it, but this will at least get you on the right path.
More Thought Exercises
First, ask yourself the question,
“If I had to scale back to just 20% of my employees that I would absolutely need to rebuild my company from scratch, who would that be?”
Think about that very carefully. We’re talking about getting rid of 80% of your staff. But we’re also planning to rebuild and thrive at some point – this is not cutting out of desperation.
As you begin to contemplate this scenario, one thing should become clear quickly: you will need people from every level of the organization. Your mail room clerk may be more vital to your absolute survival than one or more of your VP’s. Some of your office administrators and middle managers may be more crucial than some of your senior managers. You have to look very deeply into the true value that each individual delivers.
This is no different than if you were on a sinking ship. If it is listing mildly, you may just throw some of the cargo overboard. But if you need to reduce it to bare minimum to avoid an absolute catastrophe, you wouldn’t lose the life boats adrift, nor get rid of the fresh water and cans of food. It’s more likely you would throw some gold bullion overboard first instead!
The good news is that this exercise is not that difficult. Leaders we’ve done this with had a gut feel as to who is critical to rebuild and who is not. They would come up with a handful of individuals, from every level of their organization, right on the spot. Getting to 20% took a bit more work, but not that much.
The next question, and selection process, is more difficult and takes much more digging and work:
“Of the remaining 80% of your staff, who has mission-critical information in their heads that is not written down anywhere?”
This could be anything: understanding how a core process ‘really’ works; how to run a critical application; having that key relationship with someone in your client’s business that influences that organization to buy from you; understanding core elements of your culture that gives you a competitive advantage, and know how to keep it going; etc.
This exercise requires detailed analysis, but our clients have found the results eye-popping.
Scary Case Study 1
There was one situation where several IT people were on the bubble to be restructured out of this particular company. Then, through our work, it was discovered that three of them were the only ones who knew the exact 10 step reboot sequence for a mission-critical app that kept their logistics system functioning.
Considering this was a national distribution company with billions of inventory on the road at any one time, losing these individuals would have eventually been catastrophic. These, now terminated individuals, could have demanded almost any price to reveal the sequence, and the company would have had to pay it.
Scary Case Study 2
In another situation, a company we were trying to work with wanted help with a $7 million ERP implementation. Because they were in rapid growth mode and wanted to conserve cash not essential for expansion, they refused to pay for much of the process and people work we were suggesting they invest in. They considered this project part of baseline operations, so low investment priority. In short, we lost the argument and the deal.
However, two years later, we were asked to come back and bid on a $6 million ERP re-implementation with the same company. There were two major differences this time: one, we were explicitly asked to include “robust” organizational change management in our proposal; and two, we were pitching to “the new management team”. Apparently, you don’t get to lose $6 million and two years of time and get to keep your job!
These are just two of the stories, and we could write a book on near-miss catastrophes in these situations. The main point, however, is to take this exercise seriously. There are people who have information vital to your ongoing functioning whom you need, or whose information you need to document before you can let them go.
Once you go through this exercise, you need to think about a few more important things, but that requires a deeper conversation, more tailored to your specific company and circumstances. However, hopefully these questions will get you started in a better direction and in a better frame of mind.
…and, on a more personal level…
Finally, maintaining a more encouraging outlook requires a more positive mindset privately as well. You cannot walk into the office full of energy, creativity, and a mindset on opportunity, if you’re processing angst in your private moments. You need to reassess how you cope with Covid-19 negativity when you are not thinking about your work or business. And that means looking at opportunities in that arena as well.
For example, is this an opportunity to catch up on sleep? If you are one of those remaining imbalanced individuals still proud of your workaholism, read this book: Why We Sleep by world renowned sleep expert Matthew Walker. I recommend it to every one of my friends, colleagues and clients. It is probably the most important physical and mental health book published in the past 10 years, guaranteed.
Is this an opportunity to spend more time with your kids, if you have them? And this time maybe you can be fully present because you don’t have much else to think about. For example, on a personal level, one of my sons is 16 years old and learning to drive. He’s on extended March Break. Gas prices are at historic lows. So he and I went for a 3 hour road trip where he drove – and we had some of the best times together we’ve had in a while (and yes, he thought so too). And my 19 year old and I can sit and enjoy movies together at times I would usually be on calls or in meetings.
Is this an opportunity to spend some quality time talking and engaging with your significant other? Your evening plans are likely cancelled and you can’t go out because restaurants and venues are closed. So how about dusting off those bachelor culinary skills (yes, talking from a purely male perspective here), having a nice dinner with lots of talking (am I hitting all the high notes here?), then maybe a movie on Netflix, and…well, I’ll leave the rest to your interests and imaginations. No need for me to go there.
Or, perhaps this is an opportunity to feel good and make others feel good too by helping them. There are seniors or single parents in your neighbourhood who are struggling to take care of logistics. Maybe you can get out of the house and go for a nice drive in the fresh air to the local (or further afield) food market (respecting social distancing), pick them up some much needed food items, and leave them at their door.
Maybe you can again use your awesome culinary skills and even prepare them a warm meal. And remember, the biggest advantage of cooking (and that’s why it’s my favorite creative activity) is that you can eat your mistakes! If you make something you’re not too proud of, well, you still have something to eat, but cook that elderly person or that single parent family something better! That’s right, do a ‘lessons learned’ wash the cooking utensils, and try again. Fail better, as Silicon Valley keeps telling everyone.
All the best to you, and remember, we are truly all of us in this together. For the first time in global history, everyone is faced with exactly the same set of circumstances. It’s absolutely easy to have empathy for everyone because all of us are similarly affected. So let’s all hang in there. Take care of each other, stay healthy, stay positive, and this, too, shall pass.
And if you want to think differently about your business in these times, give us a call.
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