Where are you?

Where are you?

Last week I discussed how business trends had accelerated 5 – 10 years as a result of COVID, thus whatever the critical trends in your business were in March, take them forward 5 – 10 years, and that is where you are now. This acceleration applies to all companies, but the ones we see most easily are move to online retailing and the death of malls.

If that is where your business is, then as I have also said before you need to:

  • Revisit your BHAG. Hopefully, you have one, and make sure it is still relevant. Your Big Hairy Audacious Goal is more than just “goals,” a true BHAG is clear and compelling and serves as a unifying focal point of effort– often creating immense team spirit.  It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines. However, if your BHAG aimed at ten years out, and we have moved 5 – 10 years in the last few months, we may have passed, or it may no longer be relevant.

  • Review your corporate mission and vision statements, again to ensure they are correct given where everything has moved;

  • Look at your “Why.” Is it relevant in a COVID/post COVID world, or does it need changing? Is it a “Why” that has relevance with your future workforce. If you are not sure about your “Why,” here is a link to Simon Sinek’s “Start with your Why” as a refresher. Millennials are here, and regardless of what you think about them, you need them. The good ones will want to work of organizations where they believe in its “Why.” Now is the time to fix it.

  • Take a hard look at your Corporate Culture, is what you live, or are they just pretty words? I have come across many examples over the last twelve weeks were organizations are flouting their cultural beliefs and not even realizing it. Look at your behaviors during this period and have you lived your culture. If not, you need to change one or the other.

  • Develop a new strategy – urgently! As I have said before, not only have we moved forward 5 – 10 years, but the game has changed. There are new rules and players. Thus you need a new strategy.

  • Revisit your capital investment plans. With a new strategy and market, your prior capital priorities are not necessarily correct. You need to revisit your investment plans and ensure that you are focused on investing in technology and processes to keep ahead of your competition.

  • Revisit “How You Make Money.” How You Make Money is a fundamental understanding of every employee in an organization. It must be something simple that everyone understands but drives the appropriate decisions making and behavior. Herb Keller at Southwest Airlines put it best with “Wheels Up.” So how do you make money, and has it changed in this new environment?

  • Revisit your capital allocation. Right now, interest rates are at an all-time low and should remain here for some time. With lower interest rates you need to revisit your capital structure, assets and operations to determine the most efficient capital allocation from a cost of capital and tax perspective and

  • Revisit your operations. Taxes are at an all-time low, but I don’t expect them to remain so as the significant increase in government debt will need financing at some point. So look at your operations and some assets, should you sell them now and reinvest the proceeds more efficiently, given where we are. One of my clients is about to sell his office building and is looking to do a 1031 exchange into a new investment property. While that is the standard consideration; however, if you expect taxes to rise and value of investment property to rise more slowly as the world adjusts to the post COVID landscape, would it be better to pay the taxes now. That is a question each person needs to determine, but one I would ask.

  • Revisit your decisions making process. As we move through a time of significant change and confusion, you need to move the decision making down from the top to where the information is. As I have said before, this is a time for effectively A/B testing outside of just the software world. Having everything flow up and down through the organization slows the decision-making process down too much for such times. To have effective decision making at the front lines, your employees need to know the Mission, VIsion, your Why, How You Make Money, and the Company’s Culture. If they genuinely understand those, they will make the right decisions for the organization.

The most beautiful thing about the current environment is you can change all of these things without too much of an issue. Because of COVID and the adjustments required, Scared Cows can get slaughtered. Prior commitments and beliefs that could not be touched are fair game.

Now is the time to implement John Boyd’s OODA Loop – observe–orient–decide–act.

While developed for military strategy, this is an ideal OODA loop environment. An organization that can process this cycle quickly, observing and reacting to unfolding events more rapidly than the competition, can “get inside” the opponent’s decision cycle and gain the advantage. Raw information or observations of the evolving situation are processed or filtered to drive all decisions regarding the problem.

While everyone is still figuring out what is happening, take advantage of the confusion and move quickly. Those organizations that emerge ahead for this crisis will have market leadership for the next decade.

 

Copyright (c) 2020, Marc A. Borrelli

Recent Posts

Profit and Revenue are Lousy Core Values

Profit and Revenue are Lousy Core Values

As I mentioned last week, I am down with COVID and tired, so spending more time reading rather than working. I read Bill Browder's Freezing Order this weekend, and I highly recommend it. However, at the end of the book, Browder says that oligarchs, autocrats, and...

Core Values are Critical

Core Values are Critical

I am currently sick with COVID, so, killing time yesterday, I watched Downfall: The Case Against Boeing about Boeing's issues with the 737 Max and how the focus and financial results versus anything else led to the problems with the plane. The company focused on...

Resolutions, Here We Go Again.

Resolutions, Here We Go Again.

2021 Resolutions, A Scorecard Last year I shared how I came up with resolutions to meet my business and personal needs in my blog post, New Year's Resolutions, Once More Unto the Breach. I broke my 2021 resolutions for 2021 into three areas and scored them as follows:...

You Have to be Famous For Something

You Have to be Famous For Something

In a meeting last week, one of my Vistage members discussed his expansion into a new business area and how to price his services. The way he described the new market was comprehensive. As usual in Vistage, this lead to a great discussion challenging his assumptions...

How do you price your products and services?

How do you price your products and services?

Many businesses do not take full advantage of the value they offer to price effectively. Many struggle to price at a point that makes them a great margin. Here is a way to look at it see where you can price to improve your business.

Do you know your Profit per X to drive dramatic growth?

Do you know your Profit per X to drive dramatic growth?

I recently facilitated a workshop with several CEOs where we worked on the dramatic business growth model components. One of the questions that I had asked them beforehand was, "What is Your Profit/X?" The results showed that there this concept is not clear to many....

Five Ways to Attract Prospective Employees

Five Ways to Attract Prospective Employees

There is a war for talent. How do you attract talent to your company and have them apply for jobs there? You have to show why they should consider you, who you want, what you offer, and how your current employees feel.