The pandemic triggered a financial crisis as spending, the economy and business slowed. People stopped traveling, resulting in an almost $500 billion decline in travel spending compared to 2019. The food services industry ended 2020 with 2.5 million fewer jobs than before the pandemic.
A September 2020 analysis of businesses listed on Yelp showed nearly 100,000 are permanently closed in the U.S. – gone forever. Many others are now saddled with debt. A NFIB Research Center survey released in December 2020 showed 1 in 4 of the 20,000 small business owners who responded say they will close their doors within the next six months in the absence of better economic conditions.
This crisis has created a once-in-a-lifetime offseason for business. Company leaders should use this time to assess their business structures, strategies and talent to succeed in the new world.
Strategize – Don’t Just React
Most businesses are not buying and selling at the same rates they did before the pandemic. That’s what I mean when I refer to the current business climate as the offseason.
What do sports teams do during the offseason?
They train and develop new plays. They prepare for a different competitive landscape because everyone makes player trades. Players work to get into peak condition.
That’s what we’ve been doing at Unisys. We trained. We got a new playbook. We changed our structure so we can be faster and take advantage of opportunities.
Rather than rushing and being reactive all the time, we paused. We took a moment to allow ourselves to think about the business and be open-minded.
Use the offseason to train and analyze your own strategy.
Study the Field
The first thing you want to do if you’re in the offseason is run tapes of your competitors.
Football teams run tapes. They look at and study their competitors’ plays and scores. They try to determine how best to beat the competition and win games.
Business leaders should do the same thing during this economic offseason.
Write A New Playbook
Have you been reacting to the business slowdown by cutting costs?
That’s a very old playbook that many organizations follow when business softens. But it’s not just your company that had a bad quarter – the world had a bad quarter. Every industry had a bad quarter, so you weren’t criticized by the markets because you were off.
Everything was slow, stopped or off.
Use this offseason to think about what does and does not work in our new remote world.
Simplify For Speed And Scale
What wasn’t working for me was doing 50 Zoom calls a day to keep everything moving. I had to do this because so many different people were required to make a decision at my company.
The offseason taught us that we were just too slow. We simplified by canceling functions that added complexity. We also became open to new markets. This hedged the company to offset services that are suffering or that we had already addressed now that everybody is remote.
Our new model allowed us to develop a new product in six weeks for less than $100,000. In the past, we would have easily spent eight months and millions of dollars to do this prototype.
It’s like college football. The Big 12 is all about power. The SEC is all about speed and throwing. Usually, speed wins over power. That's often why the SEC dominates. You can be the biggest and largest, but if you can't join a competition, you can't win. You can't win if you can't score.
Now we are like an SEC team – we're lighter and faster, and we have better plays. This was possible because we took the time to ask ourselves – and address – the following questions:
- What’s driving up our costs?
- Are we making decisions fast enough?
- Are we missing opportunities?
Ask yourself these same questions about your organization.
Be sure that you have the right talent.
We're in a very different situation with the pandemic and its downward revenue trend. It put a heightened emphasis on our inefficiencies, cost structure and our inability to make decisions to move fast. We had to deal with our structure, make sure our strategy was right and consider skills. The strategy drove the structure, which drove the skills.
We needed business leaders who know how to scale a business – not just a region. We also added people who can innovate – not just fix things. This requires creative, curious people.
Understand that building a culture of curiosity and innovation starts at the top. If you have a leadership team that is focused on command and control, nobody will make suggestions or introduce new ideas because everything happens at the top. But if you hire people who are curious, they'll always be asking questions about how and why you’re doing things.
Are you asking questions? What questions do you ask? Are you challenging people to be different? Are you willing to ask dumb questions? Often people are afraid to ask dumb questions. But the seemingly dumb questions have often brought the smartest ideas.
Realize That There’s No Going Back
If you haven’t analyzed your structure, strategy and talent, carve out some time now to figure out if they are really working. If you didn't like your results in 2020 because of the pandemic’s impact, is 2021 really going to be any better if you do nothing different? The answer is no.
Don’t just hope that the pandemic will go away and everything will return to 2019 conditions. That isn't going to happen. If you didn't change in 2020, avoid falling further behind the competition by finding change in 2021.