The global economy is engulfed in the aftermath of an epic and truly horrible black swan event that is shutting down entire countries and economic activity across multiple industries and countries. I wrote something a while back about recessions and what firms need to consider in navigating them. My suspicion was that an economic slowdown was inevitable, and it was time to start planning for the pain that would result. This is completely different.
While some of the post’s premises hold, perhaps time to look at how to respond to the current crisis with a different set of urgency. Getting a full measure of what you are facing and how your firm or practice will respond will make the difference between whether you survive. This is not hysteria or hype, I have been through the 2000-2003 tech market crash, the 2008 credit crisis and a number of market and industry specific dislocations that washed out a number of firms. Firms with talented people and decent to superior reputations…
My advice? Before you can get to an action plan there are some stages a firm or personal practitioner needs to get through.
Step One: Wrap your arms around the notion that the economy has suffered a massive body shot and has little support under it and is falling fast. Airlines, railways, automotive, banking, travel, and hospitality, you name it, things are in the toilet. Medical is in high demand but…. communications infrastructure and services, gaming and digital entertainment and logistics are not in free fall either. Unemployment numbers are going scale like you have never seen and despite the efforts of the central banks and government to provide support the longer the shutdown continues the more pain we will collectively experience.
Step Two: Whatever you have said or published up until this started? Yeah, it is mostly useless now. I know that is a hard pill to swallow but the faster you accept that then the more easily you can move forward. Time is the asset for professional service people no matter what the angle. If you have spent six weeks researching and writing a report with forecasts, consider them as something you will need write off.
Step Three: Accept that your clients and markets are in a panic situation and all deals, sales pipelines or projects are pretty much dead on the vine. Consider that you may have to reduce prices, package things or rework what you have published.
Step Four: Know that your revenues are likely going to crater in short order and your business is in trouble either now or down the road depending on how you are structured (annual subscription vs quarterly vs ad hoc vs consulting engagement driven). Firms that are flush with annual renewals that start on January 1st are going to fare better than others. That does not mean renewals are going to be easy next year. They will not.
Step Five: Do not feel bad if this collapse has caught you off guard. A lot of people have downplayed the event or never bothered to consider that the global economy would be hammered as quickly or deeply. But you need to pivot and now.
Step Six: Rally your team and get connected. Talk openly, get all scenarios on the white board (virtual for those social distancing), and acknowledge that this is going to take some significant shifting to get through it. May involve salary reductions, furloughs, or trimming staff. Better to communicate openly. Partners/principals/owners tread carefully here. How you deal with your people will impact your brand going forward. There is a lot of collaboration and rallying together across the industries and communities. Callously tossing people out to bend your cost curve will come back on you at some point. You may not be able to save everyone, and you need not fall on your sword to be noble but before you start cutting, ask what you can do to instead save your team. If they were good enough have it the firm before this, then perhaps worth going further to hold on to them?
Step Seven: Identify what your verticals need and get to work on trying to support them. Note that I did not use the term, customer. While they obviously fit into the picture, I invite you to try and provide thought leadership to the markets that you serve. Those that lead and step are those that will be most remembered.
Step Eight: Do not, under any circumstances view your salespeople as anything less than your partners and among your most precious resources. Sales are going to be impacted, accept this. Pressuring your team is short sighted, fear based and downright stupid. They want to succeed and want to win if they are worth a damn. If they are not of that caliber then shame on you for hiring the wrong people but that is another matter. You should be taking as much feedback as you can and looking to support them in any way possible.
Step Nine: Get your analysts on message. What are they key points that you need to offer your market so you can be seen as a credible thought leader? No, this is not simple and nor should it be. Lots of noise out there in the markets and people need reliable and trusted resources. Parroting conventional wisdom, pushing hopeful optimism because you need to for your own selfish reasons or getting out too quickly without having considered everything will damage your brand in ways you do not want.
Step Ten: Get engaged. Layout your go-to-market plans, refine your messages for your channels, start reaching out to clients and crank up the conversations. Be authentic, understanding and go as far as you can to provide value.
Decent people will remember how people acted throughout all of this. If you are kind and generous to your people, then they will be your ambassadors down the road. If you offered value to your clients, then they will remember that as well. The less than professional, self-serving types or those simply not up for the task at hand will be remembered as well.