Sure for some businesses, the crisis has been a windfall. But many others are contracting in response to the changes in their markets. Most executive teams are in lock down mode right now. Their focus has been on trying to keep their business continuing despite the market impacts of the pandemic. They are shedding people and cutting costs to stay afloat. They are getting leaner and trying to do less. The World Bank is predicting the worst recession since the Second World War. In Global Economic Prospects a 5%+ contraction in global GDP and a 10%+ reduction in global trade has been forecast. The graph below shows the expectations.
World bank data on global GDP growth to 2019 with forecasts for 2020 and 2021
What stands out about this graph is the forecast for 2021. Growth is going to rebound. In fact in China and some parts of the US economy have already recovered. According to HBR:
…a dominant early expectation was for a V-shaped — i.e. return to pre-crisis trends — recovery... In fact, V-shapes have emerged at both national level (notably China) and also within the U.S., where, for example, retail sales and housing (new home sales) have bounced back and exceeded pre-crisis levels.
Broaden your focus
In some markets, the recovery is already here! We believe there is an option to scaling back and cutting down. Your team will only be able to take advantage of the coming recovery with a more resourceful mindset. One way to think about this is to consider how your team responds to pressure. Most teams right now have increased their focus under pressure and narrowed their options under pressure. That’s natural. But success requires a counter-intuitive approach in the current environment. This is an inflection point. The world is in flux. This is where taking a contrarian mindset succeeds. If you have cash right now you should be considering how to invest it in the stock market because great companies are under valued across the board. It is a COAL mindset.
COAL stands for Creativity, Opportunity, Authenticity and Learning. Under pressure COAL creates diamonds. Each of these elements is outlined below.
Creativity. In some earlier rapid revenue recovery articles I shared how to evolve your company’s value proposition with four R’s:
Basics Right
Fulfilment Reorganisation
Asset Redeployment
Value Replacement
Creatively cash in on Covid-19
Reorganisation, redeployment and replacement direct your attention to new possibilities beyond the basics. All creativity tools work to prompt you to think this way. The change is how you look at a situation. Gestalt psychology describes what we know and believe as being split between the ‘foreground’ and the ‘field’. Creativity tools bring things from the field into focus in the foreground.
You can redirect your attention to consider different parts of the context. This may help you to identify resources you previously overlooked because it wasn’t obvious they were resources at first. You can redirect your attention to redefine the problem you are trying to solve. This can lead to a completely new approach to finding solutions. In the current market you don’t need to be the best if you are the only one who can supply. You can redirect your attention to prompt new ideas. That really what reorganisation, redeployment and replacement are all about. But the tools don’t really matter as long as you can change your starting point. The quickest way to redirect your attention is to find someone who thinks differently to you about what is going on. Then try and adapt their activity to work for you in your situation. This will give you opportunities you were not aware of before.
Opportunity. If you choose to change your perspective you can change your beliefs. There has never been a better opportunity than to grow your business right now. Sounds weird right? Here are some reasons why you could choose to believe that:
Your competition has never been as distracted and disadvantaged as they are now. Some may not survive. So you can go and win over their customers more easily now.
Your governments are desperate to invest in stimulus packages to protect the economy. Some of this stimulus may directly help you or your customers. So you can get resources more cheaply now.
Your employment markets are filled with prospects. Some great people are looking for their next job. So you can pick up more skilled additions to your team now.
Your customers are reeling from all the turmoil the pandemic has created. They are actively looking for new ways to feel safe, happy and fulfilled. So your improvements, innovations and transformations will get much faster take-up now.
The reason this all comes back to mindset is because all of the facts above can also be interpreted as threats. Competition will become fiercer as things become more desperate. Government stimulus won’t be enough and we will be even further behind the eight ball. We can’t afford to hire now so we will lose the best talent out there to someone else. Our customers are staying away because of the turmoil so we can’t possibly innovate. What does the following phrase say?
opportunityisnowhere
It could be a cry for help if you are reading a lack of potential. At the same time it can be shout of triumph if you are reading the possibility in the here and now. What does the real you think deep down?
Authenticity. In any period of change, many of us yearn for the way things were before. Many of us don’t like being forced to change. But the more you think about it, the more you realise we are changing all the time. The only choice we have is how we change. Being truly authentic to yourself allows you to both adapt and fit with your customers’ nostalgic desire for things to go back to how they were before. You don’t need to over promise with hype. You don’t need to shed crocodile tears about the losses. You don’t need to stress how concerned you are. All you need to do is make sure your customers know you are still here and your business continues for them with a few clever adjustments so things can still work. You can even be upfront about not knowing all the answers. Your customers will (mostly) be ok if you explain to them your team is still learning the best ways to deal with the current reality.
Learning. New information is arriving all the time. The organisations emerging from the pandemic in the best positions will have learned the fastest. This is why things are never going back to the way they were. We have learned people can work at home successfully. Let’s hope they never go back as much to the office ever again because this would at least reduce some of the traffic congestion caused by commuting. We have learned schools can deliver learning online. Let’s hope this changes the economics of our education system so more individualised learning becomes possible. We have learned our governments can respond quickly and effectively to a crises like this. Let’s hope they be a decisive when it comes to fixing some of our other social issues. We have learned people can cope with social distancing. Let’s hope this translates into a greater ongoing sense of community and a better Australia.
Pressure turns coal into diamonds
Right now an important learning is the sky is not falling as fast as we all expected in the ‘Lucky Country’. The RBA says:
It turns out Australia didn't sink as deeply into this bog as the RBA had originally feared — rather than the 8 per cent fall forecast in early May, the bank now expects Australia's economy to have shrunk just 6 per cent over the year to June 30. Still by far the biggest fall since the Great Depression.
If enough of us decide to have a COAL mindset there will be many diamonds produced in the coming recovery. It is hard to say when the recovery will come. It is hard to get a feel for how fast things will turn. What is certain is the management teams choosing to broaden their focus and explore more now will be better placed to take advantage of the coming recovery. This is not an issue of resources. It is an issue of resourcefulness.
Robert Dew is a Founding Partner at CapFeather Global with more than 2o years of corporate consulting and university lecturing in Innovation, Customer Strategy and Customer Experience. His PhD related to improving creativity in strong corporate governance environments. He graduated with a Physics degree during the ‘recession we had to have’ in the late 1980’s.