My previous post explained that we are not in a recession. We are in a reconfiguration. There will be no return to “normal.” You will come out of this crisis either in a much better position, or a much worse one. So what do you do?
You Are A Startup Again
First of all, recognise that you are a startup again. The defining feature of the startup is that nobody knows what will make it successful. The only thing the founders know is that they need to try lots of things and that success, when it comes, will look very different from what is in the plan.
You need to get into, or back into, that mentality. But there is an extra twist. Startups need to handle the troubling thought that “nobody knows anything”, but they have an advantage. It is the advantage of no baggage. You, as an established business, have baggage. It’s all the accumulated knowledge, systems, practices, assumptions, and KPIs that have made you successful up to this point.
Beware Of What You Already Know
Secondly, beware of what you already know. I have spent a lot of time helping businesses in sticky situations, and have always found that finding the new is much easier than letting go of the old. There are things you can’t see because you are too close to them; as one of my associates put it brilliantly, “you can’t read the label from inside the bottle.” This means that, strangely, you need help from someone who knows less about your business and your industry than you do.
To illustrate; on my bookshelf I have the CIA’s operating manual for intelligence analysts. It tells the story of the reunification of Germany. At the end of the 1980s the Soviet Union was collapsing and had announced it would no longer intervene in the affairs of its satellite countries. Unrest was increasing, and the Berlin Wall was about to come down.
It was becoming clearer and clearer that the two Germanies would reunite. Clearer and clearer, that is, to everyone except the German specialists in the foreign ministries and intelligence services. Some of them “had to be prodded by their more generalist supervisors to accept the significance of the dramatic changes…”
So beware of specialists at this time. They are specialists in the way things used to be. They have been too close to it for too long.
Also beware of anything that might be described as “industry best practice.” In dealing with recession, the playbook is quite standard, and can produce dramatic improvements. The biggest project of that type I did was a global software business. I had to work quite hard early on to persuade the auditors it was worth £30m, but within two years it had been sold for £200m.
What I did was absolutely standard; control costs, manage cash better, and wait for the market to recover. That won’t work, though, when the requirement is transformation. Then there is no playbook. I recently completed an engagement with a social media agency that found itself in an over-commoditized business and transformed itself into a high-value marketing consultancy. In that case, the ideas came from fields as diverse as behavioural economics, 1970s military strategy, and a story about Somali pirates.
So that’s the way it is. The task is not retrenchment but rethinking and reconfiguring. The risks and difficulties are obvious, but just beyond your sight are some huge opportunities. Start looking for them, and you even find yourself enjoying this bizarre period.
Alastair Dryburgh will be speaking at our Business Breakfast TV series on December 2nd. You can.