The Coronavirus is still at large, and the wave of uncertainty has still not settled. The truth is, no one was prepared for this economic and social earthquake. Small and mediums sized businesses will suffer the most, but large corporations will also face big losses. As unpredictable as the future state of the economy is, inaction is not an option.
The decisions that we make today will impact the future state of our business. Because of fear, anxiety, and indecision, you might be making, or on the verge to make some bad decisions. These are the 5 biggest business mistakes that companies will make during the pandemic, and this is also how you can avoid them and make better moves that will yield better results for you and your company.
1. Jumping the gun
As a CEO it’s hard to simultaneously look through a microscope at every cost, and with a telescope in the future. When the ground starts shaking, many CEOs will immediately wipe out the scalpel and start cutting costs, without first thinking about their strategic plan. By doing so, they are making a strategic decision: one that stacks the odds against their favor. If time shows that they did make the right cuts, it only means they got lucky. Unfortunately, not many will be.
Take a moment to think, consult, and discuss the future with your partners and managers. Where do you think you will be in the next 5 years as a business? What do you think is best to invest in the current moment? And, where do you think you can divest?
You already know your business pretty well, so making a strategic plan won’t take that long.
Once you know where you’re going it will be easy to see what to keep and what to cut. Also, it’s important to keep spending money on the things that make you money.
2. Closing the door
While doing so happens to be doctor’s orders in the current situation, it’s important to find other ways to let people in. One of the worst business mistakes you can make as a leader in times of crisis is to stop communicating with your team. Your emotions are infectious, and organization-wide uncertainty has an impact on productivity, emotional wellbeing, and overall performance.
Furthermore, the last thing you want to do is burn bridges with your partners and other stakeholders. You’d be burning your lifeline too. Just consider the damage you will create if you make this kind of business mistakes.
This is a time to be transparent and inclusive. Talk to your team and your partners. Recognize that within the truth, you still have the opportunity to motivate people and that the more you open up, the more they can help you. You don’t need to carry the whole burden on your own. In fact, you can’t. Our strength is always in numbers.
3. Focus on the iceberg instead of the sea
Where focus goes, energy flows. If you focus on the problems and all the things you can’t do, you will only enhance your weaknesses. Fear is elusive and will most certainly steer you in the wrong direction. There are 3 types of captains. Ones that are so afraid, they let go of the wheel and thus, head straight to the iceberg.
Others will frantically try to steer the ship in the opposite direction, failing to see the best way to avoid disaster in the process. The third kind of captain will immediately look to the horizon for other ships or islands, and notify his crew that they are in for a bumpy ride. Only one of the 3 captains will continue sailing smoothly.
Liquidity is one of the most important factors that will impact your business. And right now, getting a hold of additional finance is not going to be easy, but you have to keep searching for options. Focus on your assets. You might be able to sell off some, and use other assets that will help you generate more revenue.
All industries are changing dramatically, but instead of being paralyzed, seek options. It might be time to invest in a digital transformation of your company or focus all marketing efforts on digital channels.
4. Not letting go soon enough
When it’s all smooth sailing, it’s easy to find excuses for why we need to hold on to things, people, or projects that might not have the potential for return on investment. However, it’s simply not a good time to keep employees that don’t perform well, managers, that are a negative influence on others, and projects which you don’t see potential in anymore.
This is another one of the biggest business mistakes that everyone will make: not letting go of dead weight soon enough. Tough choices will need to be made, but you need to make them sooner rather than later.
Once you have defined your strategic plan and goals, it’s time to see what stays and who goes. Also, you should consider reducing costs by outsourcing some key activities to other agencies that offer more specialized services, and that will help you execute your strategic goals for less.
5. Missing the boat
As interests and habits change globally, it’s clear that there will be a shift in the competitive landscape. The impact of these changes will depend on the industry, geographic location, product portfolio, but also on the company’s ability to respond quickly to the changes.
Accepting the situation is one thing, but keeping a competitive edge is another and not an easy thing to do when the circumstances appear dire. Many managers will, unfortunately, fall short in their pursuit of new opportunities and markets. Unfortunately, their inability to adapt quickly will most likely result in their downfall.
From a historical perspective, the dynamics of change always create many new and interesting opportunities for innovation. Big companies will be able to do mergers and acquisitions, thus driving corporate innovation and increasing their market share. Small companies, on the other hand, will have the advantage of the agility and will be able to respond and adapt more quickly to the new environment.
Innovation will enable all players to remain resilient. But the key factor in every business will be the ability to keep pace with the rest of the world. Being fast and recognizing opportunities early on, is exactly what is going to keep your business alive and prosperous. So don’t lose hope, gather your troops, and keep searching for the way out – because there will most certainly be one.
Conclusion – How to avoid making business mistakes?
In the new normal, it will be important to remember what has changed and what hasn’t. The challenge of leadership is to differentiate what’s real and what is illusionary. The things that will mark tomorrow’s leaders are collaborative problem solving, and understanding that the world is globally-connected and that no company is isolated.
While the future is definitely uncertain, one thing is definite: life goes on. We need to remove the debilitating cloak of fear over our eyes and be realistic, and opportunistic. We need to find a way to fit into the grand picture in order to survive and thrive as a business.
As a last piece of advice, keep your eyes on your customers. See which one of your offers has the biggest chance for success, and invest in the things you must change to remain profitable. It’s a good time to evaluate your sales channels and create new digital opportunities.
If you are stuck on some of these fronts, reach out to our team. We offer free consultations to businesses in need. We’ve helped many businesses overcome the current challenges by helping them create strategies, launch new products, and drive digital transformations. Share your challenges with us and we will help you overcome them!