During challenging times, the innovators position themselves for long term success.
Business owners are often in a lonely place and when companies are facing challenging conditions such as economic uncertainty or recession they are not sure what to do. Everything is put on hold and a survival waiting game is played, until the market comes back around. The uncertainty we refer to at present is of course Coronavirus
In reality, uncertainty is an enormous opportunity for those with vision, agility and the ability to follow their instincts. We often see more innovation during times of uncertainty. Rather than focussing on working in the business these are the leaders who break the mould and follow their passion to evolve they companies.
This article introduces 5 growth concepts that a business can explore upon during periods of uncertainty.
1. Product Innovation
Leaders that can focus on and visualise product innovation during tough market conditions will generally do well during the next boom. It may feel counter-intuative but the easiest time to reposition a business is actually during a slump, conversely the toughest time is at the height of a boom.
Innovating products is cheaper than creating new ones, and allows us to tweak offerings to evolving markets.
In general terms we focus on product extensions during good times and product innovation during tougher trading conditions.
2. Channels to market (distribution)
If business revenue drops too much during tougher trading times, we might explore our channels to market to understand this. We raise the question of whether they were:
- Not well enough established
- The wrong ones to move through this part of the business cycle
If we feel this is the case then we look to innovate channel strategy; if we fail to do this before the market comes back up we will miss our share of the uplift.
Therefore, during good times the strategic focus is on channel extension and in bad times, concentrated on channel development strategy.
3. Functionality and Structure
Ok, we are aware of the need to evolve our products and distribution channels. But what so often stops the business owner acting on this knowledge?
Our structure or functionality….
The truth is we enjoy getting involved in day to day activities, the problem is it takes up too much time. We are working in the business and are unable to make the time to be strategic and work on it.
What would happen is we could create a a functional structure that allows us to step back and admire what we have?
Many businesses fail to do this and simply react to tough times by cost cutting and reducing headcount.
Therefore, during prosperity we focus on creating a streamlined efficient business (micro), and during uncertainty look at the wider market (macro) to create a stronger position as trading improves.
4. Capability
If we are able to adapt we come out of uncertain times with an innovated product range being sold into new distribution channels. We have also established the need for and implemented a different infrastructure to support us. At this stage the business requires different skills to capitalise on the rising market.
The innovative businesses coming out of uncertainty, put a focus on building the capability of their teams. I.E. the right people, with the right skills, doing the right jobs.
5. Succession Planning
Through uncertainty many companies put succession plans on hold and forget about staff planning. In recessions especially there is an assumption that staff won’t leave because of their fear they won’t get another job.
Can you imagine the problem this creates?
When we move into the next growth phase, these employees feel unloved and leave for new opportunities. This stalls our business and rather than enjoying the upturn, we are spending time and resources on recruitment.
Through investing in our staff development and culture we create a more desireable place to work. This combined with creating unique extras for the team that do not cost much, creates loyalty.
This loyalty allows the business to flourish when good times come back around.
