President of Making Strategy Happen, Michael Canic, PhD, explains how to be proactive and prepare your business for the unpredictable market.
You’ve adapted to our COVID-affected world and made changes to your business. You’ve reconfigured your supply chains, adjusted your go-to-market tactics, and revised your people practices. You’re getting a feel for how the market is responding. You’re getting used to the new reality.
Don’t. Don’t get used to it. This so-called new reality may not last long. Multiple factors are conspiring to make this a difficult fall and winter.
Summer is over which means it’s back-to-school and, this year, unprecedented uncertainty and anxiety. Will modified schooling arrangements be safe, and what happens if they’re not? Cooling weather means more people will be congregating indoors which heightens the risk of infection. Add in the depressing effect of reduced daylight hours and the onset of flu season — Are these flu symptoms or do I have COVID?! — and it’s not hard to envision people experiencing more stress than ever.
The implications could be severe: a surge in infection rates, stress-related mental health issues, and a new wave of business challenges. Don’t get caught by surprise. Start preparing now to refocus your business.
1. Quick-Cycle Strategy
How can you refocus when there’s still so much uncertainty? First, reframe how you think about business strategy. In today’s environment, your 3-year strategic plan may not be of much use. But that doesn’t mean strategy is dead or that you shouldn’t plan. It means this is a time for quick-cycle strategy.
Compress your strategy cycle. Depending on your industry, you may want to plan no more than six months ahead. There might be too much uncertainty beyond that. And you may choose to recalibrate your strategy — taking into account new information, questioning your assumptions, and making adjustments — monthly, instead of what might normally be every six months. Finally, you may want to track progress every two weeks instead of every month to remain agile in light of fast-changing conditions.
2. Scenario Planning
You could compress your strategy cycle yet still face considerable uncertainty. What do you do then? Scenario planning. The premise of scenario planning is to identify and plan for multiple scenarios when confidence in any one scenario is low. Here are the basic steps:
Scenarios – Identify up to three possible scenarios. These might include a best-case scenario, moderate-case scenario, and worst-case scenario. Outline the key features of each scenario and their implications for your business. For example, a worst-case scenario might involve a spike in COVID cases, the lockdown of businesses, and the closure of schools.
Triggers – For each scenario, identify the triggers that would cause you to take action. Would the lockdown of businesses cause you to take action? Would an anticipated lockdown cause you to take action?
Actions – Then, what specific actions would you take given each trigger? And what steps should you take now to prepare? Do you need to ramp up your digital sales and marketing capabilities today in anticipation of in-person sales getting shut down?
Scenario planning provides a structured way to anticipate and prepare for various likely scenarios before they occur.
3. Blank-Sheet Thinking
Back in March, Flying Elephant Productions, an Irish company that builds event stages and props, saw its business all-but-vanish within 48 hours. Canceled contracts, mandated lockdowns … everything suggested it was game over. Then a request came in: “I’ve got to work from home now, but I don’t have a desk. Could you build me one?” Boom! The dots connected. Flying Elephant’s core capability was quickly building things out of wood. They also had an excess supply of lumber. So they built the desk. And then another. One month later they had sold over 2,000 desks with a steady stream of orders flowing in!
Imagine if Flying Elephant Productions hadn’t received that request. It could have been game over! Instead, the request prompted them to apply their capabilities and assets in a new way to meet market needs.
What if you were to do that proactively? Ask yourself three questions: What are our organization’s core capabilities? What assets do we have? How could we apply our capabilities and our assets in new ways to meet market needs? That’s blank-sheet thinking. And it can help you refocus your business unconstrained by past assumptions.
We could be in for a difficult fall and winter. Don’t get complacent. Get ready to refocus your business. Think quick-cycle strategy, plan for multiple scenarios, and apply blank-sheet thinking.
(For more of Michael Canic’s ideas on strategy, culture and execution: www.MakingStrategyHappen.com/Blog)