A very good business friend once said, “don’t waste a good crisis.”
That might not be the advice leadership at your business is receptive to right now, but they need to be. Instead of feeling paralyzed by the uncertainty of the times, it's time to lead by embracing the chaos.
The beauty of a significant disruption is that it jars us out of our normal habits and patterns. While no emergency should be taken lightly, leaders in a crisis embrace entrepreneurial mindsets. Instead of “we have always done it this way,” now you are faced with “what if” situations. Embrace the creativity of this challenge by exploring actionable ways you can pivot your organization’s operations and lead your organization to stronger positioning for future growth. What follows are actionable strategies for your organization to help reframe your efforts during uncertain times.
Why am I qualified to give you any of this advice?
Let me share a little real-world background about myself. This isn’t my first recession. I am the only daughter of loving parents who gave me every opportunity they possibly could, as every parent should. I am the first person in my family to finish college, not including my advanced degrees. I know what it is like to watch a family struggle — we did as I grew up.
We had one car. I remember walking home for miles from my 6th grade science fair with my Mom in the middle of a snowstorm because we had no other choice. I learned early on that sometimes you have to make the best of what tools you have and the circumstances you cannot change.
I worked three jobs to get through college while taking classes at night. My first real full-time job was at a dot-com start-up while in school. It was a dream job. I was able to travel on chartered jets. I made an insane amount of money. Then the dot-com bomb blew up and so did my job (and my finances). I had never been laid off. By that point in my career, I had never not been employed.
That was my first experience with a life-altering recession. I survived it. Those tech skills I learned then are still invaluable today and helped me move into a new industry.
Years later I found myself in my first true management position in a real estate development and construction firm. It was 2008. I had just finished my MBA and had a loan to pay. During those hard years, I worked as a marketing director in an industry that was facing a meltdown. Companies downsized. People lost their jobs. I found myself facing hard managerial moments, fearing not just for myself but for my coworkers. My efforts were under constant scrutiny. After all, marketing is just advertising, right? It was the hardest period of my pre-founder career.
I survived. I learned how to hone my efforts around results. I learned how to communicate in times of uncertainty. I learned that transparency and honesty are better than moon-shot promises. I learned how to lead as a human.
The market returned. Finding myself running a company within a company, I decided to start my own in 2013.
The moral of the story is that during every challenging period, the perception is that things will never recover. History teaches us that adaptation is a way of life.
Recessions come with the territory. But you can spend your time worrying about what will happen, or channel that energy into what you can do about it.
The Art of the Pivot
"The most damaging phrase in the language is ‘We’ve always done it this way.’”
– Grace Hopper
Jazz is a beautiful language and the perfect visualization of pivoting. Built from chaos, a jazz musician learns how to listen to, respond, and sometimes take the lead in their environment. These steps define the art of pivoting in a business.
Listen to your audience and market
Answers to our deepest questions often lie in plain sight. During turbulent times of change, it is more important to observe your environment than add noise to it. Consider:
- If you are a service or product company that serves a smaller group of customers (not thousands), the best thing at this time is to call and talk to your customers and clients directly.
- Ask them large framing questions about their welfare, changes to their daily routines
- Invest in your customers personally; show empathy beyond your concern for their future intent to do business with you
- Ask how you can help or if there us anything you could do to help them; adjacent ideas can come from the mouths of customers
- For both businesses that serve few and many, consider the following tactics:
- Consider calling a cross section of customers or establishing office hours that allow customers to connect with your company’s leadership
- Utilize email communication that is clear, concise, and not alarmist if current conditions change your business. Use the KISS method: answer these simple questions:
- What it is
- Why things have changed
- Who it affects
- How the changes will be addressed
- Where and when changes will take place
- Add notifications to your website and social channels
- Post updates to your social channels; consider “pinning” the message to the top of the channel where applicable
- Add a banner or pop-over notice to your website with the same clear and short messaging or a link to learn more posted in a blog or on a separate webpage.
- Establish customer-facing technology to continue to provide the best service experience for your customers:
- Use professional conferencing software such as Zoom for client-facing video meetings
- Add additional messaging channels so customers can reach you, such as chatbots
- HubSpot and Drift both provide free chatbot integration for most websites that will allow your customers to chat with your support staff online
- Facebook Messenger is another integration available for you to reach your customers to provide support and answer questions
Keep a close eye on your customer service representatives and other frontline staff during stressful times. These warriors are carrying your company message directly to customers.
Ensure their messages and mental health are monitored. Hours of calls from financially distressed customers are going to take a toll on them, and it will not be long before they are sharing this information amongst other staff and creating an environment of worry within your organization about your own stability.
Step out of your office and on to the lines. Take calls, comfort customers and lead from the front where your team can see you. There is no substitute for clear communication between a customer and a leader who staff sees in the trenches with them.
Invest in the market and your audience
It is statistically proven that companies that spend on marketing and development during downturns, rise in greater positions of strength as the market recovers. Unfortunately, it is hard to drive investment into programs without clear immediate ROIs when cash flow feels a squeeze. Keep in mind other companies are feeling the same pressures. Those that can continue to connect with their audiences will win market share during this time.
You cannot afford to not be on the front lines communicating with your customers, potential customers, and industry audiences. Consider Frankenberger and Graham, two Oregon professors, who studied 2,662 firms over 16,000+ “firm years” (1970–1991) to determine the effect of advertising on a company during a recession. The results? Firms that advertised during a recession increased in value and got more marketing return for their investment … in some cases for up to three years after the recession had ended. (Forbes)
A Recession ROI Timeline
A MarketSense study concluded the best strategy for coping with a recession is balanced long-term branding with promotion for short term sales. The study shows brands like Jif and Kraft Salad Dressing experienced sales growth of 57% and 70% respectively after increasing their advertising during the recession.
McGraw-Hill Research analyzed 600 B2B companies and found that those who maintained or increased advertising grew significantly … both during the recession and the following three years. In fact, by 1985, sales of companies that advertised aggressively had grown 275% over those that didn’t.
An American Business Press study showed that companies who advertise and market aggressively can maintain and increase sales during a recession and in the following years.
Buchen Advertising tracked advertising dollars vs. sales trends for the recessions of 1949, 1954, 1958 and 1961. They found that sales and profits dropped at companies that cut back on advertising and, that after the recession had ended, those same companies lagged behind the ones that maintained their ad budgets.
Advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. He reported in the April 1927 issue of the Harvard Business Review that companies that had continued to advertise during the economic downturn were 20% ahead of where they had been before the recession, while companies that reduced advertising were still in the recession, 7% below their 1920 levels. (source)
“Don't waste a good crisis.”
Look for adjacent opportunities to lead
Adjacent or new top-line revenue opportunities become possibilities during market changes. The closer your company is to understanding the changing needs of its audience, the more opportunities may make themselves known. Consider these historic examples:
- Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during this slow economic period. Notable new revenue products introduced during that time was the new Kindle product line which helped to grow market share. For the first time, on Christmas Day 2009, Amazon customers bought more ebooks than printed books. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower-cost alternative to cash-strapped consumers. (Forbes) This paved the way for more tech-enabled products like the Kindle Fire, Alexa, and others.
- One of the most successful businesses during the last recession came as a response to the dying but once profitable video rental store. In 2009, the peak of the recession, Netflix gained 3 million members. This was due to their new TV/movie streaming plan, which allowed subscribers to stream an unlimited amount of entertainment a month, along with their disc-delivery service. Netflix became notable for what they did, their customer service, and eventually brand recognition. As of today, Netflix continues to grow and we expect that number to continue during this recession. (Business2Community)
- Recently the Federal Government created a stress test deciding how banks would fare under a variety of circumstances including a depression; no bank fared well on the stress test except Citigroup. Citigroup had an 8.9% growth in assets, making it one of the only banks on the list that has grown since the recession. This was attributed in part due to efforts made since the recession, the quality of their services, and the recognition that their “brand” has. (Business2Community)
Identify new methods of delivery, distribution and even innovations to your product or service. This is not about reinventing your entire business, rather, it’s about meeting your customers where they are.