We are obviously traversing unknown territory, but some businesses are finding new lanes of revenue that are different than the past. They are discovering what works, making investments as they gain traction, and continuing to enhance those new revenue streams. A simple example—and one of the hardest-hit sectors of our economy—is restaurants. While most eateries had to shut down on-site meal service, they were allowed to offer takeout and delivery. Others transitioned to selling groceries. While the new operations required adjustment and maybe a learning curve, some of these shape-shifting restaurants have been able to generate at least a good portion of their previous revenue.
Although most strategic plans have fallen by the wayside this year because of the uncertainty, it is still important to have a plan. Strategy matters, especially in times of economic tumult. And therein lies the opportunity. For instance, some farmers have linked up with Shopify, the e-commerce platform, to sell their goods. Shopify has seen a dramatic increase in sales where buyers and sellers are less than 15 miles apart, due to the pandemic and supermarket shortages. Forbes reported earlier this past year that over 30 fashion brands had pivoted away from making clothes and handbags and toward the production of face masks. Finding those lanes of cash requires recognizing opportunities as they present and investing in them, knowing full well that you may have to change course three or six months down the road—or perhaps even tomorrow.
The Human Equation
In times like these, the critical role of confidence cannot be underestimated. Confidence is contagious. The stress of school and business closures, the uncertain economy, the threat of contracting a deadly virus, the isolation that social distancing has brought—all impact the morale of your employees. Exuding confidence that brighter days are indeed ahead will go a long way in fostering a collective resolve to survive and thrive in the current environment. CEOs are the galvanizing force employees need to instill the drive to navigate a changing or invisible roadmap.
No matter the environment, there are some best practices that are critical to business success in any economy. These include:
- Finding great talent: It is incumbent upon every CEO to find the skill sets needed for his or her particular business. An uncertain economy can actually be a great time to recruit the talent necessary to capitalize on new opportunities.
- Having a good understanding of financials: Every CEO needs a realistic budget and the acumen to pinpoint the levers that can yield better results.
- Making investments in stair steps: The J-curve business cycle measures the time and funding it takes for an investment to move from a cost center to a profit center. In a difficult economy, CEOs may be better served making smaller investments of time and money rather than larger and riskier ventures.
- Finding areas where you can get less resistance and more velocity: These are where the opportunities lie, and being among the first to road test a new idea or improve on an old one is a great way to gain traction.
No one can predict what 2021 will ultimately bring in terms of our economic recovery and our social and political divisiveness. In times like these, CEOs must forge their own path and be ready to change lanes when the roadblocks mount. Leadership without a road map may feel counterintuitive, but the most successful CEOs who find new paths become those who leave the others in the rearview mirror.
Brad Mishlove is the founder and CEO of Catapult Groups. He also serves as executive coach, mentor and senior advisor to entrepreneurs. Clients typically hire Mishlove to bring strategy, systems and accountability to growing enterprises.