The year 2020 is done and in the books and we are off and running in 2021.
A key success factor for business leadership is to reflect back on what happened and use the reflections to plot a course for success. After looking back, look ahead. What is the outlook for the future and how can you adapt your business to achieve success?
There are several lessons learned. Here are a few of my conclusions.
Face reality, even if it hurts: This is a Jack Welch saying, and I have used it to focus my efforts when times are tough. When the pandemic hit, it was time to face reality that things changed and get on board. From wearing masks, to social distancing, to adapting to the new work environment, none of these were wanted, but the reality is that they had to be done. So get on it.
Move fast: Then natural tendency often is to wait and see what happens. But waiting too long can create competitive disadvantage and cost money. Adapt quickly to the new reality.
Pivot the business model: If the business model no longer fits in the new environment, then pivot to what works. For example, restaurants pivoted to pickup and delivery to maintain some business.
Focus on what you can do: Change is difficult and it is easy to opine for the “old days.” However, a focus on what you “can do” versus what you “can’t do” is more positive. You are going to make mistakes, but when you embrace change and get a little better every day, good things happen. In my case, pivoting to online learning was an opportunity to improve my online content delivery rather than focus on classroom content delivery.
Trends accelerate: This can be a positive or a negative. If you are on the right side of the trend, it can be a positive. For example, look at how much the streaming content market advanced in adoption and level of use. In normal times, it probably would have taken three to five years to achieve the market position they achieved in just a few months. On the negative side, some bricks and mortar retailers, such as movie theaters, already were struggling. This trend accelerated.
Fundamentals matter: Just like a struggling sports team, fundamentals matter. Improve the fundamentals and improve the performance. Focusing on the core customer, effective positioning, customer service, value, differentiation all matter even more when times turn difficult. The negative effects of poor fundamentals are exacerbated in difficult times. Simplifying the business to focus more on fundamentals might be an effective strategy to survive difficult times.
These are timeless concepts. The pandemic was a massive environmental disruption of the market and it was out of our control. We can control how we respond.
As 2021 starts to unfold I believe we should look ahead and plan for the rebound from the 2020 issues. The launch of COVID vaccines has created optimism for a slow return to “normal.” My thought is to plan for the return to “normal,” but understand that “normal” will be different from the past. In addition, “normal” might happen sooner or later depending on your specific market environment.
Outlook No. 1: Customers return, but haltingly: There is pent-up demand for certain services that were decimated in 2020. Shows, live entertainment and conferences will return, but at a limited level with limited attendance. Business travel might not return to previous levels. In-person activities will slowly increase. Plan for a slow, but consistent recovery.
Outlook No. 2: Trees don’t grow to the sky (reversion to the mean): Businesses that saw increases in demand should plan on a leveling of that demand, or perhaps a decline as competition for time and money from activities that were decimated by 2020 return. For example, total consumption of streaming services might decline due to increased demand on time from now available options. If your business increased last year, what are your plans to maintain the business in the face of reduced demand and/or increased competition?
Outlook No. 3: Long-term effect on behavior: Was 2020 a temporary setback (or increase) or an actual change in customer behavior? For example, the increase in online purchasing is probably an actual change in behavior vs. increased consumption of products due to a lockdown. If the effect was short term, how can you entice customers to come back? If the effect was long-term, how will you adapt your business to this reality?
Outlook No. 4: What can you do?: Adapt to changes and grow — get better every day. Focus in on the customer and how to create value in the market. Invest in the business as the situation improves. Pursue opportunities. One way to look at pursuing opportunities is the concept of “placing bets.” For example, there might be an interesting opportunity to promote your business on social media. You can “place a bet” on the opportunity and see if it pays off. Try some new communication strategies in an improving business environment.
Finally, fundamentals matter. Focus on the core customer. Effective positioning, customer service, value, differentiation all matter even more when times turn difficult. Effective implementation of fundamentals can pay off for your business as the environment improves in 2021.