- October 14, 2020
- Posted by: David Marshall
- Category: Management, Productivity
I’ve been asked, during the pandemic-induced recession, how companies can and should adapt to change and keep up with everything that’s going on in the world. How can they pivot? How can they evolve? How can they morph into something that can take advantage of this “new normal.”
Believe it or not, there is a (small) part of me that says “Don’t.” Don’t change. Don’t adapt. Don’t change who you are just to keep up with the whims of the world.
It just doesn’t make any sense to try to torque your business around into an unrecognizable state that probably will not work once there’s a vaccine.
I say this because there is ultimately going to be a solution. There’s going to be a vaccine, and we’ll eventually see the disease lose power, and we’ll recover.
However, that’s a very small part, and it’s maybe a little idealistic. I know businesses can’t hold on that long and wait patiently when we don’t know when this will actually end.
The (larger) practical side of me says business owners can’t afford to lose their business to lawsuits or failure. So in the places where there’s no protection out there to keep you from being sued by all and sundry, the only thing you can do is batten down the hatches for as long as you can take it.
For example, I don’t believe remote working is going to last forever. Business is still done people-to-people, face-to-face. Sales are still being people-to-people. I don’t think Zoom meetings are as effective as an in-person meeting can be. We still need contact and in-person time with the people we normally see every day. So while it’s not ideal, you don’t want to gather your back office staff into one big building if you can avoid it. Let everyone work from home and hold your Zoom meetings for as long as you can function that way.
But wherever you can create protections, you need to do so. If your operation is open for business, you can require social distancing and other important measures. And, no matter how people may feel about them, you can require your employees to wear masks. It doesn’t matter how much they hate them or think they’re a personal infringement on their rights, you can require them to wear masks.
After all, you’re their employer! You can require your production associates to wear safety glasses and steel-toed boots. You can require everyone to show up on time. You can require that they meet certain performance objectives. So you can certainly require that they wear a face mask at all times.
Because the moment someone catches COVID from one of their coworkers, do you know who they’re going to blame in their lawsuit? The coworker who makes as much money as they do? No, they’ll blame the company that’s making a lot of money and carries business insurance.
You can protect your company from these lawsuits by requiring that they follow safety precautions. And the ones who fail to follow proper safety procedures are free to pursue other opportunities outside the company. Because if you’re providing safety protocols and requiring people to follow them, then they’re the ones who are responsible for getting sick or injured when they fail to follow those protocols.
How do you adapt when you have to?
We’ve seen a lot of companies that pivoted when the pandemic started. The automakers started making ventilators. 3D printing companies started making face shields. Retailers began offering curbside pickups, and grocery stores went dark and only opened to food delivery drivers.
If your company has the ability to provide a service or product to the fight against COVID, by all means, do it. Some companies have managed to keep their doors open by pivoting, and others have made a fortune by adapting.
If you have the engineering and the production wherewithal, you can change your product offerings overnight, particularly with necessary items. If you can make “have to” products, that’s where you’ll make money. If you make “want to” stuff, that’s where you have to break into new markets or fight to keep going. So switch from the “want to” to the “have to.”
This is what the automakers did. They knew we want to have a new car, we have to have a new ventilator, and they’ve managed to stay successful.
Adapting because of governmental actions
What if your industry has been hit hard by other external forces, like increased tariffs?
The solution to something like that is very simple: raise your prices.
Back in the mid-80s, I took over a small lighting business in Canada. At that point, the Canadian dollar was at par with the US dollar — $1 = $1 — and I negotiated all my purchases in US dollars.
Then on February 4, 1986, the value of the dollar dropped literally overnight. It plunged to $.69 and my costs went up 31 percent! Americans could buy Canadian things for 69% less, and it cost Canadians 131% more to buy American goods.
There was only one solution and that was to raise my price. We couldn’t lower our costs and our suppliers wouldn’t lower their prices to accommodate us, so we raised our prices.
That’s not actually a complex problem: You raise your prices or you’ll ultimately put yourself out of business.
The next step is to increase your marketing.
That’s because everyone squeals at a price increase, which means you’d better redouble your marketing efforts in order to keep your name and brand out there. This way, even when people knew that our prices increased, they also knew why our products were still worth it.
In the end, our company not only survived, it thrived. We knew we had a product people had to have, so we increased our prices to keep up with the drop in the dollar’s value, and we doubled our marketing so people knew we were worth it.
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business, including pivoting within their industry. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.
Photo credit: PXFuel.com (Creative Commons 0)