March 2, 2021 8 min read
Opinions expressed by Entrepreneur contributors are their own.
By Florencia Colunga Gascón , Consulting Operations Manager at Wadhwani Foundation Latam
In more than one article referring to The Crisis we have read about how we should adapt to a new normal, as if it were a stage that begins when the crisis ends. While it is true that there are stages in the development of crises (resolve, resist, return, reimagine and reform, according to McKinsey ), it is also true that today, even with the current crisis, things are very different from just a year ago and we must adapt to a world in which, for now at least, the only constant is change.
It is time to let go of the past and actively address circumstances, aware that this will require continuously transforming our companies to adapt them to new market conditions.
To help you do this, focus on the following five key actions:
1. Reassess the needs of your customers
Image: Cytonn Photography via Unsplash
What used to be important to your customers may no longer be. Just like you, your customers are constantly adapting to the changing environment and, consequently, they redefine their scale of priorities quickly and constantly, including the consumption of products or services.
Regardless of whether your business is B2B or B2C, it is important that you evaluate and identify if your current offer corresponds to the new priorities of your customers and see if you can satisfy that demand with the lowest transformation cost in your operation, if you should go to a new market segment, or if it is necessary to bet on a deep transformation of your business model.
Start by redefining the situation of your current customers and move towards defining the desired customer segment, that customer who under these conditions not only wants your product or service, but can also pay for it .
From here you could conclude targeting different segments or creating a light business line, for those who want to buy from you, but cannot afford it.
2. Identify what still adds value to your business model and don’t be afraid to update what no longer adds value
Part of the success of a business model is its structured compliance for a prolonged period, however, recognizing what as a business model has lost its validity and updating it without pain is just as important. The sooner you identify which part of your business does correspond to the new priorities of your market and which ones have become obsolete, the faster you can adjust to current market demand and align the operation.
Use the largest amount of predictive data on market behavior that allows you to make informed decisions, minimizing risks or creating contingency plans that cushion falls.
The objective will be to envision the future of your company with scenarios built with information focused on what is going to happen; Use only scenarios with information from the past corresponding to the internal behavior of your company to establish how it has responded to previous challenges and define what you will need to solve the gaps that the new business model will entail.
3. Prepare your staff for change
Image: Chris Lawton via Unsplash
During crises, periods of change or conjunctural convergences, transparency in communication is essential.
Not all personalities are prepared to assume the vacuum of uncertainty (and that hence some prefer to be entrepreneurs and others collaborators) however, in the face of crises, solidarity is usually a common trait in work teams. Gather your staff and share the perspective of future good and not so good events, granting the confidence of the expected results and the certainty of possible scenarios built with timely and accurate information. In the end, what your team will consider is that you are in control of the situation and that there is a plan to execute.
Get your teams to contribute the most relevant ideas
To contribute to the transformation of the organization in favor of the new established objectives. You will be surprised to see very successful suggestions in the process.
4. Analyze your financial maturity and don’t be afraid to ask for help (always with a plan)
Image: Micheile Henderson via Unsplash
It is not a common practice among small entrepreneurs to have a contingency fund that they can draw on in a crisis, especially when they are constantly reinvesting their own profits to grow. So it is perfectly normal that the crisis and the economic contraction of the sectors has taken the majority by surprise. If you are not a businessman or businesswoman highly motivated by finances, it is time to get fully involved because you will have to make strong, precise and forceful decisions to stop financial leaks, finance business model transformations and make essential adjustments in the operation. Start by stopping the “luxuries” that do not compromise the quality of your product or service and check if from the updates of the previous points you will need additional financing.
Now that some international suppliers have contracted, it is a great time to look at local and national suppliers that are emerging and positioning themselves in the market with a lower cost (plus it is a great way to reactivate the local economy).
You can rely on financial experts to consolidate good strategies that work in stages, with clear actions that allow you to continue operating austerely and still achieve your goals.
Take the opportunity to define if you are willing to include new partners or investment capital in your company. Even so, this does not relieve you of the responsibility of dominating the finances of your organization, remember that there is no money that reaches in a broken purse.
5. Monitor your results
Image: You X Ventures via Unsplash
What can be measured can be improved . And better yet, keeping constant measurements will help you realize in time if you need to apply extraordinary actions, or if your Plan A is not working as well as you thought and it is time to move on to Plan B (or even Plan C).
Ideally, define two to three key indicators for each next block: finance, sales and operations, workforce, value chain .
There are recommended indicators, however, we invite you to select those that are most relevant to your business model; this way you can have a clear and quick view of what is happening in real time in your operation. A great way to ensure that you are not overwhelming yourself with indicators is that your report should fit on a single page.
Once you have established which indicators you will measure and how often you will measure them, set the parameter that will help you understand “how well you are doing”. For those indicators in which you are not doing so well, it will be necessary to define concrete actions to correct the situation; remember to define what will be done to correct it, how it will be done, who will be responsible, when it will be executed and if additional resources are needed.
Remember to apply these actionable on a regular basis to better adjust your organization’s response to change.
