A Nice, Big Glass of Cold Water
A realist’s advice on pivoting your business operations, financial goals, and management strategies to overcome the next 18 months.
Written by Alex Jimenez
After what has seemed like an eternity, many of us are getting back to business, albeit under what we now call “the new normal.” It is exciting, unnerving, and unclear what this new reality is going to look like for many businesses, but I am supremely confident in the innovative nature of our country and the business leaders who will blaze our paths forward.
Over the past few months, I have seen an endless stream of free content—from webinars and blog posts to thought leadership roundtables and marketing pieces—all discussing the future of business and what it will look like. While much of this content has been valuable, an overwhelming amount if it has brought to light a trend that has existed in the consulting worlds for years. The 50,000-foot-view PowerPoint presentation that touts the simple solution to make your business successful in the new reality or—my personal favorite—the three-step-process to taking your business virtual. Boy, howdy! I wish it were that easy, but it is not. Attainable? Yes. But simple? Not a chance.
In fairness to the organizations that have put time and thought into these presentations, there are valuable nuggets that audiences can take away and implement in their re-engineering processes. That said, there is a long road ahead for many of us. Oversimplifying with “silver bullet” promises is simply not going to cut it.
There is no magic potion that will solve the challenges we have faced and will undoubtedly encounter in the near future. There is no one-size-fits-all tactical plan that will end in rainbows and lollipops for our clients, vendors, or partners. There is a significant amount of hard work to be done, frustrations to be overcome, and mistakes to be made before we successfully come out on the other side of this.
Now, this is not meant to be negative or pessimistic. As I always tell our staff, I am not a pessimist; I am a realist. Accepting your reality is the only way to overcome it. If you are overly optimistic, you will rely on hope and not see the pitfalls before they happen. Overly pessimistic approaches accomplish nothing. Our objective is to come with a healthy glass of cold water that will open people’s eyes to what they need to do, so that they are 110% conscious of the heavy lift that will be required to accomplish their goals. Anything less than that is not fair and simply promises the impossible. So, let’s get started.
Retreat is easy when you have the option.
If you are one of the many organizations that has begun the process of pivoting, good for you. However, before you continue, you’ll need to make sure you and your team are all in. This means, in many ways, you need to throw out the old playbook or—at a minimum—lock it in a drawer and put a do not disturb sign on it. Pivoting your business will only be successful in the long run if everybody understands that the new plan is not a band-aid or a temporary fix. Staff will not do what it takes to evolve if they know in the back of their minds that six months from now, you plan on reverting back to the old ways of doing business. At the first sign of pain, people will start clamoring for the old ways of doing things because that is what they know best. Does this mean you cannot leverage the old operations model in the new one you are building? Of course not. It would be wasteful to not leverage best practices where possible. It just means that the organization needs to be focused on the future, not the past. It will be incredibly hard for organizations to pivot successfully if they treat the pivot like a temporary fix or band-aid.
New Reality = New Budget
I have sat on a few calls recently where the process of re-working annual budgets came up. In principle, this makes sense. If you are pivoting your overall business model, then you just became a startup overnight. You need to create a new budget based on your startup reality, not a cut-and-paste of the prior one.
One of the major gaps in simply trying to re-work a prior budget is that many leaders will not be truthful with themselves about the potential for their new operating model or try and create a model where they make up the gaps to achieve the same goals they had before. If your organization drove $1,000,000.00 from one service line like an annual event, then there is literally no possible way you are going to make that up in one swing of the bat. In a digital reality, quality and volume are key. You need to develop a budget that reflects this because if you do not, then you will not be successful at answering the harder questions that come later.
Breaking even should be the short-term goal.
Ouch! Breaking even is not exactly a standard business principle, right? It is not what anyone would classify as a scalable approach to growing a business. However, I believe for the remainder of 2020 and likely the 1st half of 2021, this is the approach that will need to be taken. Here is why:
Imagine that you have been in business for over twenty years. It took you twenty years to achieve whatever level of success you had prior to 2020. That is twenty years of process, twenty years of lessons learned, and twenty years of intellectual property developed around your prior operating model. Can you honestly pivot and attain or exceed that same level of success in six months? If yes, congratulations. Stop reading right now. If not, it is ok. Remember, you are a startup now.
Surviving along with testing new iterations is the primary objective, now. Whatever your pivot is or will be, it will take time to address challenges, process gaps, and revenue models. Though weekly and monthly evolution will be the new topics of conversation, overburdening your organization with unrealistic goals will not foster an environment of success within your new startup. This is easier said than done, but I strongly recommend this approach as you re-think your new business model. This will allow you to be nimbler as you proceed down the path and make decisions faster and with less perceived repercussions than if you overshoot out of the gate.
It is important to remember that the above is simply a starting point. If you were just starting your business these would be the first steps in going to market. The difference between a sole employee company and your organization is that your strategies and action plans will need to be implemented by people who are not you. Over the next few weeks, we will be sharing our thoughts on the implementation of your pivot and how to address change management across your organization.