Robert Steele has 40 years of Insurance, Employee Benefits, Healthcare, and Technology experience as a sales and marketing executive. Robert’s biggest asset is his ability to take companies in transition and turn them around when sales, marketing, or product development was causing financial or operational bottlenecks.
He has taken four companies that were all facing growth problems with a different underlying problem at each company and created new opportunities for growth, financing, or product development and enhancement. Robert loves challenges. Adapt to dealing with C-Suite executives where a trusted advisor relationship becomes the difference between making a sale and losing a sale is a key to his success. His innate ability to ask key questions, at the right time, to get executives engaged in the process has led Robert to close six, seven, and eight-figure deals.
Robert’s passion is helping teams re-invent themselves to a level of excellence in their sales activity and exceeding objectives. He has mentored peers, colleagues, and even competitors to think differently about themselves and their approach to problems that have been plaguing their sales challenges.
Maintaining advertising in a recession has been proven over time to increase market share and boost revenues over time.
In these uncertain times amidst the COVID-19 pandemic, there are likely two distinct pathways for businesses to follow — adapt or perish. Because none of you reading this would ever consider laying down your arms and not fighting for survival, I thought I’d share a couple of quotes from noteworthy types who chose the latter mindset, choosing to both adapt, and thrive, rather than survive.
“To improve is to change. To be perfect is to change often.” –Winston Churchill
“Skate to where the puck is going to be, not where it is.” – Wayne Gretsky
Of course, your survival instinct is just a starting point. What will it take to truly gird your organization for the post-pandemic economic recovery?
In this blog and the one to follow, I’d like to lay out some steps that might be worth taking. First, we’ll discuss why your advertising budget should be spared the ax. We’ll then discuss strategies to employ to prepare for an economic rebound.
Onward, ho!
Playing to Win the Ad Game
History is full of examples where businesses that maintained or increased advertising budgets during a recession were rewarded with more market share and higher sales and profits.
During the Great Depression, Post cereals reduced its advertising budget while Kellogg doubled its ad spend. The result? A catchy slogan — “Snap, Crackle and Pop” – for its new Rice Krispies cereal, and a 30 percent increase in post-depression profits. Oh, and they’ve been the market leader ever since.
During the 17-month recession in 1973 -75, Toyota maintained its ad spend and became the No. 1 import in 1976, surpassing Volkswagen.
In the 1990-91 recession, Taco Bell and Pizza Hut took advantage of McDonald’s decision to reduce its advertising spend. Pizza Hut sales increased 61 percent and Taco Bell,s jumped by 40 percent, while McDonald’s decreased 28%.
More than 40 studies over 93 years for Advertising in a Recession
In 2009, Gerard J. Tellis and Kethan Tellis compiled and synthesized 40 historical empirical and non-empirical studies on the topic of advertising in a recession. What they found was a healthy dose of evidence that advertising during a recession is a good thing. Several studies found clear evidence the reduced recessional ad spending led to lower post-recession sales; still, other studies found that the inverse – higher spend led to higher sales – was true. And, some studies actually found that market share can actually increase more for some companies during a recession than in stable times. The likely reason is a combination of lost share by competitors and the entry of new, more nimble firms into the post-depression marketplace.
Advertising Drives Word of Mouth
In another example, researchers looked at the lessons learned from the automotive and financial industries during the 2008-2009 depression. Brad Fey and David Shiffman concluded that:
Advertising plays a substantial role in driving positive word of mouth (WOM) for major brands.
Even during a major crisis, ad-driven WOM continues to be nearly as positive as during normal times.
Cutting back ad spend during a crisis diminished the impact of a valuable tool for offsetting negative news (though customer service, public relations, and social media also play a role).
From personal experience, I lived in the 2008-2010 recession. While a member of the executive team at Firehouse Subs, we used the downturn to reposition the brand and double our ad spend – actions that led to increased market share and exponential growth from 2010 to 2016, at a 20 percent year-over-year clip.
“The optimum response to the recession is to maintain, and ideally increase your advertising investment.
Unfortunately, to pull this off you require three things. You need to have some money available to spend on advertising. Then you need an executive team smart enough to know marketing is an investment or trusting enough to listen to your presentation that explains all of this to them. And, finally, you need to not be shit.”
How Does This Relate to Today?
Of course, we know that cash flow is critical, and maintaining ad spend during this crisis is easier said than done for many brands. But, if you have the ability to communicate with your customers through email/SMS text and other owned channels like social media, do it. As Fey and Shiffman learned from their work, the message is important, and this is the time to do all you can to maintain positive Word of Mouth with your customers.
If you are fortunate to have cash reserves and can maintain ad spend, especially by shifting to digital channels where “shelter in place” directives have increased usage, do it too.
Messaging Counts Too
Now, the message you convey during the COVID-19 crisis will vary slightly by industry. In some industries like restaurants and retail that are considered essential services, the advertising message could be similar to pre-COVID-19 messaging, since customers seem to be sympathetic to the struggles being experienced by their local merchants.
But striking the right balance is critical. If you are seen as putting profits before people, you may squander trust in a way that it cannot be recovered. A recent study by Edelman on brand trust confirmed this fact but also found that most brands are using their advertising powers for good rather that evil. Consumers in the survey responded as follows:
90 percent want brands to do everything they can to protect the well-being and financial security of their employees and suppliers, even if it means substantial financial losses until the pandemic ends.
89 percent believe brands should offer free or lower-priced products to health workers, people at high risk, and those whose jobs have been affected.
83 percent are seeking a compassionate connection, including brand messaging that communicates empathy and support with the struggles they face.
84 percent are turning to brand social channels to find a sense of community and offer support to those in need.
65 percent like hearing from brands they use about what they are doing in response to the pandemic because it is comforting and reassuring to them.
The takeaway?
Though it may be ok to advertise product or brand, as usual, it is advisable to change messaging, especially in owned channels like email, SMS/text, and social to a more humanistic tone and values.
“There is no doubt that the COVID-19 crisis is more than a recession. It is much worse and physical distancing is a demand killer. However, we at Edleman believe there will be much pent-up demand after the tide turns. American consumers like to be mobile, to eat out and spend money shopping. Don’t under-estimate the power of “Cabin Fever” and the “stir-craziness” for all Americans due to physical distancing.”
In our next blog, we’ll look at the importance of strategic go-to-market planning in being ready for the rebound.
Doug Reifschneider
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
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I thought it was time to look into the crystal ball. After scouring news articles for 60 days, several themes arose from the ashes of the pandemic to reveal the top-10 changes for restaurants after the crisis ends.
Chains will rule – 7 of 10 restaurants are owned by individual operators according to the National Restaurant Association, most of whom are independent. Unfortunately, those independents have been the majority of closures and if 10-15% of all restaurants permanently close during the pandemic, then only healthy chains will be left.
2) Growth will rebound – Chains will increase unit growth to fill the void left by closed restaurant locations. New independents will arise out of the ashes. The new wave of restauranteurs will have learned from the recent crisis and will focus on sustainability of operations by leaning hard into delivery, take-home, contactless payment, and other enabling technology.
3) Ghost kitchens – new and existing concepts will cooperate together to develop ghost kitchens where multiple cuisines live in harmony to satisfy the appetite of urban dweller and the virtual food court will become a thing.
4) Cleanliness is next to Godliness – Serve-Safe and other entities who train restaurant employees to prepare and handle food will proliferate and the constant disinfecting of communal surfaces such as counters, door handles, tables, chairs, and condiments will become the expected norm. The reopening guide by the NRA will be followed by all and probably expanded by many. https://go.restaurant.org/covid19-reopening-guide
5) Off-premise will continue to grow – Now that consumers are getting used to ordering food digitally and internal and external delivery is expected, the trend may slow after the pandemic ends but the trend for facilitating delivery, take-out, meal kits and the like will proliferate.
6) Digital Rules – Every restaurant, whether they be independent, or part of a chain will provide as many e-commerce channels for guests to order food as possible. Wing Stop, Domino’s, and Chipotle are doing well during the pandemic because they were positioned to survive in a crisis. All restaurateurs who don’t learn that they need to embrace digital orders and provide ways for customers to get the food where they want it and when they want it will fail. Perhaps this should be #1 on the list for the top-10 changes we will see in the restaurant industry.
7) Shrinking dining rooms – Because of the shift to off-premise dining, new restaurants in all categories will reduce the square feet of their dining areas. Existing locations will remove tables and chairs to always be prepared for social distancing.
8) Marketing mix shift – Whereas TV was a big part of the advertising mix for national chains and larger regional chains, the shift to off-premise will force restaurant brands to lean much more heavily into digital advertising channels. The shift will occur because restaurants will more easily track conversions from online visibility to online orders as a key metric. The brands that do continue to use to TV will determine how to make Outcome-Based TV buying work.
9) Marketing Messaging – All restaurants will need to understand their consumer and know the new customer journey better than ever before. Every brand will also need to nail their brand proposition because if they don’t, all ads after the pandemic ends will be about digital ordering and delivery. Digital channels may be a convenient benefit, but if every restaurant offers the standard digital channels, those digital channels will not be unique to anyone.
10) Counter Culture – There will also be creative and innovative individuals and organizations that will buck the status quo. Whether they embrace video dining, reinvent food halls, or return to a cash-only payment model, we will see successful attempts to do everything they can to not be trapped by the previous 9 changes.
In conclusion, the top-10 changes for restaurants may be different from this list but you can bet many of the themes will occur because they are happening now.
Doug Reifschneider
https://www.itbpartners.com/doug-reifschneider/
Thank you for visiting our blog.
Jim Weber – Managing Partner, ITB Partners
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According to a recent study by Chief Outsiders, a national marketing strategy consulting firm, 88% of Chief Marketing Officers (CMOs) see the difficulty in staying ahead of Marketing Technology.
Why?
According to Forrester, technology has not just impacted business, it has disrupted it. So much so that CNBC reported that the average life span of an S&P 500 company is about 20 years. It was 60 years in the 1950s according to Credit Suisse. 1
The way technology is evolving, imagine what that figure might be in 20 years.
All you have to do is look at Moore’s law to understand why technology is moving so fast.
What is Moore’s Law & How Does It Impact Marketing Technology?
In 1965, Gordon E. Moore, the co-founder of Intel, made this observation that became Moore’s Law.
Moore’s Law refers to Moore’s perception that the number of transistors on a microchip doubles every two years, though the cost of computers is halved. In addition, Moore’s Law states that we can expect the speed and capability of our computers to increase every couple of years. Plus, we will pay less for them too. Another tenet of Moore’s Law asserts that this growth is exponential.2
Moore’s Law tenet is that the number of computer chips on a single board grows exponentially.
Source: Moore’s Law graph3
It is hard for a human to keep up with exponential growth. And marketers are human. This is why marketers are having trouble keeping up with marketing technology.
Why specifically do CMOs think it will be hard to stay ahead of technology?
Because many CMOs haven’t kept up with marketing technology to-date. And the exponential growth that is expected to continue will be mind-boggling.
The Marketing Menu Changed!
For example, as recently as the 1990s, marketers had a finite list of advertising and promotional tactics at their disposal. The tactics to increase sales, improve brand awareness, and grow market share were low tech too.
Out of Home (Billboards, transit benches, and shelters, taxi’s, etc.)
Promotion (sports teams, schools, etc.)
Yellow pages if a local or multi-location business
Today, with the addition of OTT (Over the Top) TV, banner ads, advertising on social media, and other digital options, the choices on where to place advertising dollars are staggering.
MARTech = Marketing Technology
The modern CMO is faced with options in Martech and Adtech. Yes, those are real terms used within the marketing world. In 2011, we had about 150 MarTech choices. By 2019, there were over 7,000 choices.
In 2011, there were about 150+ Martech vendors. By 2019, there were over 7000!
To put in perspective, RedHat published the following tech stack that is aligned with the customer journey. One brand using this technique would interact with over 30 Martech vendors.
Who can keep up with that, let alone stay ahead of it?
Illustrates 30 MarTech companies have to work with to manage the customer journey.
Source: 4
Technology has disrupted business in many ways. According to Forrester, the primary reason technology has disrupted business is based on three issues:
Empowered consumers
Blurred lines between digital and physical
Disruptive business models powered by data and tech
In their reports titled “Winning In The Age Of The Customer,” and “The Customer-Obsessed Enterprise” Forrester suggests that companies that are not just customer-focused, but customer-obsessed, achieve higher revenue growth, customer satisfaction, and employee satisfaction.
Enter the COVID-19 pandemic
To put into perspective how important technology to business is, consider how different brands in food service were impacted by the pandemic.
Chipotle sales decreased 16% in the last two weeks of March compared to -25% at McDonald’s & Pizza Hut, -30% at Taco Bell and -35% at KFC
According to Black Box Intelligence, sales reported by all restaurants in their database for the week ending April 19 were -47.6%
As reported in QSR magazine for Domino’s “What’s happened in the first four weeks of Q2 (March 23 to April 19) has been more enlightening. Domino’s witnessed U.S. company comps jump 10.6 percent. Franchises are up 6.9 percent. Blended, it’s a 7.1 percent year-over-year same-store number.”
The first 3 examples are from brands that were already focusing on their digital capabilities. Wing Stop was one of the first restaurant brands to offer chatbot ordering on social media platforms. And Domino’s has become the de facto leader in the pizza segment when it comes to technology.
The key takeaway for restaurants is that the pandemic created a new set of consumer desires and demands and the brands (often chain with marketing teams) already knowledgeable and leading in technology won. This plays out in retail too. If you’re a retailer and you didn’t have an eCommerce platform prior to March 13, you’re probably hurting bad, or closed.
The pandemic forced many brands to accelerate their use and adoption of technology to meet the new consumer needs.
Conclusion
The bottom line when it comes to brick & mortar businesses is that marketing technology is part of the customer experience and great technology can create a great frictionless user experience. Bad technology can do the opposite. The pandemic forced business owners to embrace eCommerce, digital ordering, and contactless payments and transactions faster than ever before. Consequently, brick & mortar brands must:
Own all the consumer touchpoints
Own customer data
Connect offline to online for a true omnidirectional view of your customers
It’s not easy to keep up with technology. The effects of social distancing and working from home simply made every business pivot or adapt to less touch and more connection via technology.
If Forrester is right, the technology we marketers use to reach intended customers needs to pivot and more companies need to become customer-obsessed to succeed.
Staying ahead of that trend will be very difficult, very difficult indeed.
Doug Reifschneider
Doug Reifschneider is a 30+ year marketing veteran in the foodservice industry. He currently works with Chief Outsiders as a fractional CMO.
Our Guest Speaker is Wendy Elin who will lead a discussion on Workplace Productivity:
Wendy Ellin
Wendy Ellin is a Workplace Productivity Consultant, International Speaker, &
Author of Enough Is Enough, Get Control of Your Stuff. Her insights into living an organized life are shared in her presentations with irreverence, humor, and a level of passion that motivates her audience to TAKE IMMEDIATE ACTION!
Wendy talks about real-life challenges that we all experience such as email
overload, being on time (or not), reasonable expectations for getting things
done, and much more. It is from Wendy’s 20 plus years in the corporate arena
that she drew from her own successes by working smart, not hard—that inspired her to develop the tools and techniques for increasing workplace productivity and ultimately a renewed sense of peace of mind.
Growing up on a small farm in South Georgia, I learned at an early age there were laws that governed the growth of crops and animals. Now as an adult I hear everyone talking about growing a business, growing a family, growing a political party, growing a church – it seems like everybody is trying to grow something!! It has occurred to me that the Laws of Growth I learned on the farm about growing an organism might also apply to grow an organization.
The First Law of Growth is that Growth is the NATURAL RESULT of a healthy organism. We did not go out every morning and wake the cows up and encourage them to grow! We kept them fed and watered and they just grew! For those of you who have children, you never had to go in the baby’s room and tell Junior it was time to start stretching so he would grow! You just had to keep him fed and watered and he grew!
May I be so bold as to suggest that if we have a healthy organization, it too will naturally grow? If we build an organization where people want to work and contribute, they will not want to leave and will become a brand ambassador for other people looking for a healthy work environment. And our clients and customers will benefit from their loyalty and will want to purchase as many of our products and services as they can use, and they too will become brand ambassadors for others needing what you provide!
So how do you go about creating that healthy organization?
The Second Law of Growth is you must Plant the Seeds to Reap a Harvest. You can’t just lay the seeds on top of the ground and expect to reap anything on the farm, and you can’t just talk about what you’re going to do, you must actually DO something!
You have to break up the fallow ground, plow it up, loosen the soil, allow it to breathe and accept rainwater! When is the last time you took a long, hard look at how you do what it is that you do? How long have you been doing the same old thing the same old way? Are there parts of your organization that needs the refreshing of a good plowing?
Now, this is not the “just change something to be changing” mantra, but would any of your key people benefit from some additional training or a motivational seminar? Are there processes that could be changed to produce better outcomes? Would it help to have a consultant or outside advisor come in and give your organization a complete evaluation top to bottom? What would happen in your organization if you pulled your salespeople into work in operations and sent your operations people out to make sales calls – even for a short period of time?
It has been said that a RUT is just a grave with the ends knocked out and ruts can be deadly in an organization if not plowed up!
The Third Law is you REAP what you SOW! This could be a book in itself! You will reap the ATTITUDE you sow! You will reap the employees you hire! You will reap the character you develop! You will reap the policies you implement!
On the farm, it didn’t cost much more to purchase the BEST seeds, and, in the long run, they always gave the best yield. Might I propose that hiring the best people will, in the long run, be your best bargain? Hiring less than the best is a false economy – you will always get what you pay for!
The Fourth Law is that your Harvest is directly proportional to the care you provide your crops. You have to make sure your plants are receiving adequate water and fertilizer, and your employees must be receiving adequate compensation and training! Your clients and customers must be receiving high-touch relationships and quality products and services! Start being stingy and your organization will react.
The Fifth Law is you must PULL the WEEDS! If there is someone in your organization that is not contributing, either motivate them, train them or fire them. If there is anyone sowing discord, fire them immediately. Crops cannot compete with weeds for water and fertilizer and your employees are not going to thrive with negativity in their world. And dare I say sometimes a client or customer can become a weed. Don’t be afraid to fire one of them if they are creating more problems than they are worth.
The Sixth Law is you will always reap MORE than you sow! For every seed of corn you plant, you will reap 2 to 4 EARS of corn come the harvest! There should be a positive ROI on every employee and every customer, and that ROI is going to be influenced by how well the leader leads. Unfortunately, this law also works in the negative – reaping more grief than was sown.
The Seventh Law is you reap LATER than you sow! There is no magic wand to instantly create a healthy organization. It takes time for the efforts you put in to produce the results you are wanting, but don’t let that discourage you from starting the process. Consider it motivation to start NOW! Get a sense of urgency about creating a great organization.
So, in closing, I recall the words of Kevin Costner in The Field of Dreams, you build a healthy organization and they will come! Employees will come! Clients and customers will come! Profits will come!
Ralph Watson
Ralph Watson has a varied and extensive career spanning 45 years of increasingly responsible positions in both sales and operations in a very diverse mix of industry specialties, including food processing, textile and apparel, financial services, and professional management consulting.
Ralph served as a Senior Executive Analyst with a number of international consulting companies focused on the family-owned, privately held market where he distinguished himself as one of the top analysts in a highly competitive field. In early 2014, he personally coached 10 businesses in Europe.
Ralph C. Watson, Jr. 404-520-1030
Thank you for visiting our blog.
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
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Jim Weber is inviting you to a scheduled Zoom meeting. Kevin Garrett is our Main Speaker, Doug Reifschneider is the Spotlight Speaker
Kevin Garrett is a nationally recognized LPL Financial Advisor, and Partner in one of the largest financial planning consortiums in the country.
Kevin Garrett – Integrated Financial Group
Kevin and his team focus his extensive planning strategies around pursuing his clients’ goals and dreams for themselves and their families before and during retirement. He specializes in assisting women who are dealing with challenges in their lives, as well as the unique needs of sports and entertainment professionals.
Kevin is involved in the local community, most recently as a member of the International Rotary’s Dunwoody Chapter, Committee Chairman with the North Fulton County March of Dimes, as well as being on Advisory Boards for the St. Jude Golf for the Kids Invitational and the Fulton County school system. Kevin is a member of the Atlanta Athletic Club where he has been active on the club’s committees. He also coaches his son’s league basketball team. He lives in the Atlanta area with his life and business partner, Lesley, and their 2 sons and daughter.
The current COVID-19 crisis is already changing the economy in extraordinary and unexpected ways. But there are steps private equity firms can help their portfolio companies make to help weather the storm, and recover when the clouds lift, according to Doug Reifschneider, a CMO with Chief Outsiders.
The world’s best epidemiologists only have models to predict the full depth and breadth of the COVID-19 pandemic, but companies are already feeling the weight of the economic fallout. They’re scrambling to find the best way to respond, and in many cases, survive, all the while being rightly concerned for the health of their families and communities. It’s not easy, and this is no time to pretend otherwise.
Some enterprises might be dusting off contingency plans for downturns or large-scale threats, but this moment requires more than that. It demands a resiliency program, one that’s clear-eyed and proactive. If the outlook is too bleak or too rosy, the result can be the same dangerous inertia. But Doug Reifschneider, a CMO with Chief Outsiders, has a series of initiatives that can counter that.
Building off his extensive experience in the retail and restaurant industries, Reifschneider has devised what he calls the “7 Rs of Resiliency Programs.” It’s a checklist that can help frame and direct the efforts to respond to COVID-19. “It’s based on a mental framework from the US Marines that is centered on three steps in coping with a crisis: improvise, adapt and overcome,” says Reifschneider. “Plenty of people are improvising at this point, but it’s time to look at more constructive ways to adapt and plan for recovery.”
Private equity firms would do well to look within each company of their portfolio and help guide them in executing each one of these steps.
Review costs. “Most people are already doing this, as they’d have to be asleep at the wheel if they weren’t,” says Reifschneider. Still, beyond canceling recurring services that are simply irrelevant, like window washing, it can involve hard calls about labor and supplies. A lot of restaurants, retail brick & mortar and even brand HQ’s are furloughing employees and the current stimulus will help alleviate that pain, but those cuts need to be executed without crippling the resiliency program.
Reassign tasks. Sometimes the best thing a company can do is focus on what it can give back. In the short term, that can be repurposing the business for strictly philanthropic purposes. He cites one restaurant that used its parking lot for a Red Cross Blood Drive. “It doesn’t address the bottom line, but it establishes the business as a partner in the community,” says Reifschneider.
Rethink offerings. For restaurants that never considered takeout or delivery options, this is the time to launch those. For retailers, this can involve more online ordering and curbside pick-up. But creativity is key here. Brazilian steakhouse chain Fogo de Chao was centered around its all-you-can-eat in-house dining experience. “So they became a butcher shop, offering their unique cuts of meat so folks could cook them at home,” says Reifschneider. “It’s a savvy way to redeploy inventory and keep sales from cratering completely.”
Another example is the company Wow Bao, that created a special licensing deal to allow other restaurants to produce and sell its dumplings by selling the ingredients and a few pieces of equipment to do so.
Reconsider sacred cows. As businesses rethink their offerings, they can run smack into certain “sacred cows” that seem to be integral to their identity. That high-end eatery may balk at delivery options since that fish dish might be ruined in the thirty or forty-five minutes it takes to deliver it. “This is no time for those kinds of pretensions,” warns Reifschneider. “Find a way to make a meal pack, which are popular now, or focus on offerings that can be delivered successfully.” Several restaurants have created pop-up drive-throughs, with no more than a tent and a landlord’s blessing. And the likes of Home Depot have shifted to curbside pick-ups even as it prided itself on counseling customers in the store.
Reschedule Initiatives. Retailers and restaurants that had planned remodeling projects could move those up, but only if they have the resources to do so. “It would take only the best-capitalized businesses to embark on such remodeling projects, but if they can, it’s worth doing,” says Reifschneider. “Instead of closing for that week in August to remodel, do that now.” Of course, such initiatives can still be hindered by government directives that limit non-essential work.
Reconnect. Communication matters more than ever. “We may be keeping our distance physically, but we’ve never been more social,” says Reifschneider. “We have regular Zoom happy hours and contact clients regularly.” B2B companies will have closer relationships since they sell directly to their clients, but B2C companies shouldn’t go quiet either. They need to reach out every few days, so long as they are mindful of tone and content.
Reifschneider cites a recent study by Edelman that surveyed over 12,000 people across 12 countries on brand trust in the wake of COVID-19, which finds that 71% of respondents would lose trust in a company forever if that company is seen as putting profits before people right now.
“Every enterprise should take that 71% seriously, and make sure their communications are exclusively about how they’re helping their communities, their customers and their employees cope with the situation,” says Reifschneider. “Striking a tone of generosity and support is crucial.”
Ready the relaunch. There is no reliable guidance for when any company will return to normalcy. However, Reifschneider notes this shouldn’t prevent companies from planning the steps for a reopening. Employees will need to be retrained with new procedures for interacting with customers, and in the restaurant business, there are likely to be new protocols for food prep and increased sanitation. Dining rooms and showroom floors will get dusty during the shutdown, so time needs to be allocated for a deep clean. “This also might be a great time to retrain employees in customer service, stocking shelves, or getting CPUs in line,” says Reifschneider.
However, no one should take any of these steps in a vacuum. Each needs to be tailored to the market reality facing a given enterprise. “At Chief Outsiders, we vet all assumptions, with hands-on research initiatives that capture how customers and peers are thinking and acting,” says Reifschneider. “And we do this even when the market is stable and growing, let alone during a crisis that can change everything overnight.”
So perhaps the first step in any resiliency plan is for a business to get its bearings, and understand exactly where it stands at the moment. It might be all the more important to listen before speaking, to ask, and use that feedback to gauge what to do next. The best private equity firms will already have open channels with their portfolio companies and that level of candor and sense of collaboration should be extended to all stakeholders.
In times like this, humility might be a secret weapon, provided it doesn’t stop a company from acting. Fortune may still favor the bold in times like these, but only if the bold is informed and willing to help.
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A prudent man foreseeth the evil, and hideth himself (or ‘seeks refuge’): but the simple pass on, and are punished. Proverbs 22:3
Ralph Watson
Regardless of where Covid-19 originated, it is an actual virus and it is among us.
Mass hysteria has gripped our country emptying our grocery stores and gun shops and tanking our economy. I’m not making a political statement nor placing blame. I am simply acknowledging the current reality of our world and the tragic effect it is having on our businesses, large and small.
Let me invite you to step away from the madness for a few minutes for a dispassionate chat about our current situation.
At this point, there is precious little we can do with the country on lockdown. Our customers are not circulating in the marketplace, but are rather cocooned in their homes possibly shopping online. That doesn’t mean we can’t do ANYthing!
In his seminal book, The 7 Habits of Highly Effective People, Stephen Covey presented his Time Management Matrix exposing the relationship between Urgent tasks and Important tasks.
Quadrant I was the “Urgent & Important” containing all the fires that business owners face all day long: operational breakdowns, customer complaints, employee disagreements, accounts receivables, job bidding, and the list goes on ad infinitum! This is the quadrant in which we spend most of our waking business hours.
Quadrant II was the “Important but NOT Urgent” containing – honestly – all the most important issues of life: date night with the spouse, children’s ball game or dance recital, thinking & planning, reading important literature, praying or meditating, taking care of our health and on it goes.
The paradox of these two quadrants is that the ONLY way to get Quadrant I under control is to camp out in Quadrant II and DO the Important work of strategic business planning and management self-improvement! As you are able to become proactive and look down the road to see potential dangers, you are able to make those provisions to avoid the fires and reduce the size and tyranny of Quadrant I.
Although this may be the first time our current living generation has seen what is happening, it is not the first time for our country. Let me acknowledge that during the Great Depression, there were bakeries that went out of business – but there were bakeries that survived. There were clothing stores that went out of business, but there were clothing stores that made it.
The point is that no business segment vanished. Some businesses in every category made it in spite of so many of their competitors folding for good. So while we are all currently forced out of Quadrant I, now is a great time to take full advantage of the situation to get seriously deep into Quadrant II and not squander this unique opportunity to Be Greater Faster!
Read a management book. Call friends who own businesses to talk about common issues. Engage with a professional consultant – a generalist if you need overall help, or a specialist if you feel you need specific help like marketing. Reconnect with distant family. Get spiritually recentered.
Now maybe a good time to do a deep clean on your business. If you own a restaurant, pull all your equipment from the wall and clean behind that greasy frier and refrigerator. If you have inventory, get it straightened up, pull inactive SKUs and sell them off online if you can. Take a close look at your shop floor to see if there is a better way to improve the flow of production.
Now is NOT a time for deer-in-the-headlights paralysis!
If you need inspiration, reach out to someone you can trust!
Ralph C. Watson, Jr. 404.520.1030
Ralph.Watson@BeGreaterFaster.com
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You need to address the urgent needs of keeping your family safe and healthy. You need to address the critical issues around employees, payroll, managing your cash and other realities of the current crisis. Period! Absolutely! If you haven’t spoken to your bank about the financial relief bills that congress is about to pass, call them now!
You also need to get back to business to the greatest extent possible as you address these – hopefully – short-term issues, even if you are doing it from your home kitchen table in your pajamas. During the last recession, I saw too many business owners slow down when they should have been redoubling their efforts.
You need to get back to basics and plan out how your business may change (opportunities!) and how you are going to ramp up as quickly as possible. You need to get back on The Value Track and back to exit planning – creating your future: your exit / succession / transaction. Make sure that you are integrating your short-term crisis management decisions into your planning. They will impact your business and its value just like any other decision.
How can you keep to your timeline for the sale of your business or get back to family business succession planning for the transfer/sale to your children or other family members? It may be delayed but don’t assume it will and don’t slow down working toward it.
What can you learn from what other companies are doing? What is likely to change as we come through this period that you can adapt your product or services to address. (Hand sanitizer in happy meals? McD’s, I want royalties!) I am very serious about this. My clients have been hit hard like everyone else, in a variety of ways. They are all getting creative in the short-term and I know that these decisions and detours are going to make them stronger and more valuable companies.
You need to have a clear, but flexible plan that considers the “what-ifs”. Whether here in the Spring of 2020 or in every year since you started your business. You won’t always know what those “what-ifs” are, but they WILL occur. Hurricanes, recessions, competitors, regulations, your own illnesses, tariffs, hacking, lawsuits…
Here are 4 brief blogs I have written over the last 10 years on the topic of business risk. These business management and leadership issues did not start today. Take a few quick minutes: Thoughts to Consider on Risks to Your Business
In the meantime, I am reiterating my offer of a one-hour conversation with you, your clients or other business owners who could use a sounding board at this time – whether for input on urgent problems, thinking through strategy in order to come out of the crisis or to focus on building/rebuilding value if working toward a sale.
This year of challenges marks my 20th year in practice as a consultant, coach and exit strategist; helping clients grow, solve problems, build value and work on exit strategy. I would be happy to explore how my 20 years of experiences with other clients – and how they are addressing this situation – might provide insights and help your business survive & thrive!
Stay Healthy & Safe!
David Shavzin
David Shavzin, CMC Exit Strategist – Value Growth, Exit Planning, Succession Planning
