This article was originally published on The Business Journals.
The pandemic has delivered both crises and opportunities, depending on your business. If you run your own operation or are guiding a larger organization, you are always wondering: How should we adapt? Can we even survive?
Wayne Gretzky, the hockey player, famously said: "Skate to where the puck is going, not where it has been." The message is to act, not react. It's not new; it's been around for years. Comcast has its own updated slogan, "You don't bounce back, you bounce forward."
You wonder why Sears, a pioneer in the mail-order business, didn't attempt to buy Amazon in the early days or even set up its own operation to compete. The advent of online selling was a major industry shift for brick and mortar retailers.
Here's another story. We all remember the fax machine. The technology was largely phased out when computers, e-mails, and attachments did the job better. Wasn't that in the 1980s or 90s?
Now, ask yourself the question, when was the fax machine invented? The technology was developed in 1843. It's been said the primary use of the technology could be getting newspapers to remote parts of the country. It didn't catch on, yet it became very popular in the 1980s. The lesson here is many things operate in cycles. Things are in favor, fall out, and return again.
How do you know if your business model can adapt? Tom Watson of IBM famously once said, "I think there is a world market for maybe five computers." Fortunately, he and his team at IBM were able to revise their thinking and assume a leadership role in their industry.
Will my business model be able to survive?
This is the point when a business should be bringing in a management consulting firm. Although it sounds scary and expensive, hopefully your local accounting firm also provides business advisory services. One of the greatest advantages is they are taking a third-party view. You've heard the expression "Can't see the forest for the trees." They see the forest.
Start with some pre-work. You should have a business plan. Your bank likely wanted to see it before they lent you money. Pull it out and review it.
You also want to give thought to your business model. Why should my firm, and others in the industry, be successful? What's the rationale? If you were telling the next generation: "This is a great business to be in because…" what would you say?
Management consulting often usually includes a SWOT analysis. They look at strengths, weaknesses, opportunities, and threats. This isn't merely senior managers meeting in a conference room, it's gathering input from many stakeholders in your business.
You should be surveying current clients and former clients. Your employees should be asked their opinions. Current suppliers and former suppliers should weigh in, too. If possible, you should gather data from non-clients. These are members of the public who might (or might not) choose to become prospects.
This part of the analysis feels good.
- What is your company good at doing?
- Why has it been successful over time? How has it weathered previous market cycles?
- Has the firm encountered similar situations before? How did it cope?
- Why do new customers come to us? Why do they stay?
We all have them. Sometimes it's complacency or focusing on the short term.
- What aren't we doing well?
- How do current customers think we could improve?
- Why have previous clients left us?
- How are we performing relative to our competitors?
You've heard the saying, "Out of crisis comes opportunity." You've also heard, "You've got to spend money to make money."
- Can we reduce our overhead expenses without compromising product quality or customer service?
- Are we fully utilizing all channels used by customers? Are we engaging with them on their terms?
- Are we in a position to buy out competitors as a strategy to increase market share?
- Can we expand our product offerings to gain a better share of wallet?
What is happening that might put us out of business or marginalize us?
- Are our firm, products, and services current with technology? Are we obsolete?
- Are we delivering a reliable product people associate with quality?
- Are we behind the curve relative to industry trends?
- Are we caught in a "race to the bottom" price war?
These are a few of the questions an outside consulting firm would be asking. The exercise opens new directions in thinking. Gaining input from current and potential future clients allows you to better align with what the market wants. Although there are stories about companies that lost their dominant position because they were slow to react, there are many success stories about how firms adapted to the changing environment.
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