COVID-19: The (utterly surprising) research-based actions you must take now to emerge from the meltdown
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Let’s not mince words.
We’re not just ‘living in unusual times’. And we’re not just facing an ‘economic downturn’.
Let’s call it as it is: We’re staring down the barrel of an all-hell’s-breaking-loose world-wide meltdown of epic proportions.
Businesses across Australia – and the globe – are either shedding staff or closing their doors. And the ramifications are far-reaching – personally and financially.
Is there anything you can do to emerge from the madness unscathed? Can anything be done to emerge better, stronger, more resilient, more profitable?
According to battle-tested wisdom and Harvard University research, there is. But you’ll need to take some key actions… fast.
Panic, Paralysis or…?
We all know that when faced with a threatening situation – like a tiger chasing you across the plains of an African desert – most normal humans will experience one of two instinctive reactions.
Fight or flight.
In this current ‘all-hell’s-breaking-loose world-wide meltdown of epic proportions’, I’d like to rename that dynamic: Panic or Paralysis.
Now, you might be forgiven for taking the ‘panic’ approach: wrestling toilet paper away from unarmed civilians in the supermarket isle, while stockpiling and hoarding essential provisions (like pasta and rice).
You might also be excused for taking the ‘paralysis’ approach: burying your head in the sand and pretending this isn’t actually happening, or that it will all go away once we re-emerge from a short, sharp two-week isolation period.
But the reality is that neither approach will help you emerge from this crisis unscathed, let alone better, stronger, more resilient and more profitable.
So what will?
Cultivate a mindful mindset
First of all, you’ll need a fundamentally different mindset. Instead of reactively fighting or flighting, operate mindfully. As I mention in my book, The Mindful Entrepreneur, that doesn’t mean engaging in mindfulness meditation (though that might be worthwhile too).
Acting mindfully means being deliberate and strategic about how you run your business and how you live your life.
It requires thinking deeply about your goals, systematically planning how you’re going to achieve them and then deliberately executing on that plan. And while there are no guarantees in this new world order, a mindful approach is infinitely more likely to lead to success.
Yes, this is a meltdown. But just like one melts down gold, silver and other precious metals to fashion something far more beautiful and valuable, so too can you use this meltdown as an opportunity to re-fashion your business (and your life) for greater success.
Get external help
I know, it’s easy to say ‘be mindful’. True, for some, that’s all they need: a prompt to refocus from reaction to deliberate action – and off they go.
But for many of us, crises can spark challenging emotions, anxiety, depression and other serious mental health concerns – issues that can’t just be ‘switched on and off’ like a light. That’s nothing to be ashamed of – it means you’re human. But neither should it be something you ignore. To get through this unscathed, you’ll need to be operating at your full mental and emotional potential.
You see, the state of your business and your state of mind are more deeply intertwined than you might think.
What should you do?
If you’re like me, you’ve probably already been hit with a barrage of messages telling you to be calm, relax, go for a walk (if you’re not in total lockdown), meditate, do exercise and appreciate all the good in your life.
All nice messages – and, for some, very helpful strategies.
But, for others, having someone tell you to ‘meditate and appreciate the good’ when waves of extreme stress are crashing over you is like someone telling you to ‘calm down’ when you’re at the height of an angry outburst. It just doesn’t work – and can be downright frustrating.
That’s why if your emotions are affecting your ability to function, speak to your Doctor about a referral to a qualified Psychologist. Many Psychologists are now offering online therapy and there’s even a Medicare number for it on its way.
Research reveals that CEOs and business owners are far more likely to experience mental health issues than other mere mortals. Which means that running a business is often stressful at the best of times.
So, the bottom line is: If you need it, step up to the plate and seek professional help now – your mindset is too crucial to ignore.
Take deliberate action
In addition to having the right mindset, you’ll need to take deliberate action.
But where should you start?
Again, you’ve probably been bombarded by a million suggestions. Communicate with your customers regularly. If you’re still operating, inform them of your health and safety procedures (you do have them, right?). Over-deliver on your product or service. And so on.
All very helpful suggestions. But, on their own, they’re not enough.
So let’s turn to some practical, research-backed strategies for surviving (and perhaps even thriving) in a global meltdown.
In a fascinating 2010 study reported in the Harvard Business Review, researchers reviewed the performance of 4,700 companies prior to, during and after three global recessions: The 1980 crisis, the 1990 slowdown and the 2000 bust.
Now get this: 17% of the companies didn’t survive. Of the survivors, 80% hadn’t regained their pre-recession sales and profit rates – even three years later! Only 9% flourished, doing better on key financial metrics than before the recession.
Just who are these 9%? What strategies did they employ? And what can we learn from them?
Balancing offence and defence
The researchers classified companies and their approaches into four types:
- Prevention-focused companies. These companies make defensive moves to avoid losses and minimise risks. Think: cutting costs by improving operational efficiency, reducing discretionary expenditure, rationalising business portfolios, lowering head count and preserving cash by postponing new investments in innovation, developing new businesses or buying assets.
- Promotion-focused companies. In the face of adversity, these businesses make offensive moves, like making strategic investments for long-term gain, and acquiring talent, assets or businesses.
- Pragmatic companies. These companies combine defensive and offensive moves. They cut back in staff and improve operational efficiency, while at the same time investing in growth, assets and innovation.
- Progressive companies. Like pragmatic companies, they also combine defensive and offensive moves. But they employ a very specific combination of moves. Progressive companies only focused on one defensive move: they cut costs by improving operational efficiency, not by reducing staff numbers. They also focused on all kinds of offensive moves: they develop new business opportunities by investing in innovation and marketing, and they invest in assets such as plants and machinery.
Interestingly, progressive companies emerged the clear winners. They comprised the elusive 9%.
How exactly did they do it?
Improving Operational efficiency
Let’s be clear: you’ll need to implement aggressive cost-cutting strategies to survive a meltdown.
But research shows that cutting costs through improving your operational efficiency is more effective than simply slashing employee numbers. Don’t get me wrong: even Progressive companies lay off employees; they just rely on that approach much less than others.
In practice, improving operational efficiency means scrutinising every aspect of your business model – from how you’ve set up your supply chain to how your business is organised and structured, enabling you to reduce operating costs on a permanent basis. When demand returns, costs can stay low, allowing your profits to grow faster.
There are numerous operational efficiency strategies that you could adopt. Here are a few to get you started:
- Look for opportunities to automate your processes. For example, rather than manually entering your expense receipts into your accounting system, automate it with software like hubdocs or receipt bank. It can save hours of time.
- Create documented systems and processes for all tasks. When you create step-by-step systems for all tasks, you not only maximise the chances of your people doing things right the first time (and avoiding costly and time-consuming mistakes), but being able to ‘see’ the documented system enables you to examine it and optimise or streamline it to reduce cost, reduce waste and inefficiencies, and improve quality.
- Measure efficiency and results. You’ve probably heard the phase, “If you measure it, it moves!” Well, if you want to enshrine best-practice operational systems into the fabric of your business and culture, you’ll need to measure their performance. Create goals or targets for every role in your organisational structure and for each system within each role. Then you’ll be able to measure your progress, create more accountability, and inspire improved efficiency and overall performance.
Invest in growth
Cutting costs through operational efficiency is fundamental, but the best 9% went further: they invested in growth.
In particular, these companies invested in 2 key areas:
- they took advantage of lower prices to buy property, plants, and equipment; and
- they increased spending on innovation and marketing.
Counter-intuitive?
While it might sound that way at first glance, they’re actually wise moves. Investing in assets helps businesses during the recession and afterward, enabling them to respond faster to increased demand. And while marketing may only produce modest benefits during the recession, developing and cultivating new markets substantially increased profits afterward (when you can capitalise on all the relationships and goodwill created while every other business was hibernating).
How on earth they could afford this, you might ask? They used resources made available by improving their operational efficiency.
One example: Digital marketing strategy
There are multiple options for investment in growth. But let’s look at one example that’s likely to pay big dividends: putting in place a rock-solid digital marketing strategy.
Here are 3 digital marketing strategies you can implement right now:
- Revamp your website or landing pages. If you’ve been sitting on the fence about revamping your haggard, old website, perhaps now’s the time to do it… well, now might just be the right time. That way, when things go back to normal, you can hit the ground running.
- Create conversion-optimised landing pages. Even if you don’t need to revamp your whole site, work on improving (or creating) ‘landing pages’ – stand-alone conversion-optimised pages dedicated to each of your core products or services. At a minimum, ensure your landing pages have:
- a large (clickable) phone number at the top;
- a large clear headline that conveys who you are and why you’re different;
- multiple buttons (in a colour that stands out) to book a meeting or get a free quote;
- customer testimonials (at least in writing; videos are even better);
- trust elements (like logos of industry associations, qualifications or anything else that builds trust);
- sections describing your specific service; and
- a section introducing your business and your key differentiators.
- Generate & nurture leads. Even if you can’t convert leads into sales at the moment, now’s the time to build awareness of your brand, capture leads and nurture the relationship. You’re creating a tribe of potential customers who know, like and trust you – making your future marketing infinitely more effective. To make that happen, try these strategies:
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- create a great piece of content (like an ebook, guide, template) that creates lots of value for your target market;
- offer it for free across multiple channels, including social media (yes, even and especially paid social media like paid Facebook or Linked In ads);
- ensure prospects enter their name and email (at a minimum) to get their free content, so you can be in touch over time.
- implement an automated email sequence that delivers the content, introduces your business and nurtures them over time with additional content; and
- add them to your blog (and if you don’t have one yet, create one) so they receive regular, helpful and interesting content from you each week, fortnight or month to keep you top of mind and build the ongoing relationship.
Where to next?
There’s no doubt about it: we’re being scorched by the fires of a global meltdown. But your next steps from here should be clear. Get your mindset right – that’s number one. Then you’re ready to take deliberate, strategic action, combining the right mix of offensive and defensive moves.
And if you stay strong and use this time wisely, this meltdown might be just what you need to transform the raw metal of your business into something more beautiful and valuable than you ever imagined.
