Six Steps to ‘Recode’ Your Business in a Crisis
It’s easy to feel overwhelmed by today’s crisis. It’s even easier to ‘hope’ things will get better. As CEO-Founder, you need to take decisive action: get a clear picture of your business’s financial health, reposition your offering, and implement quick wins so your company is still active when the market rebounds.
The world has changed a lot in recent months. Your market is drying up. Your customers are disappearing. All you read about are doomsday scenarios. You feel helpless and uncertain. That’s why you are delaying critical decisions that could save your business.
It’s time you take decisive action and ‘recode’ your business.
Your #1 responsibility is to steer your company to safety.
The last time the world was in crisis, in 2009, I was CEO of a European broadcasting group. Over 20% of the company’s revenues — more than 25 mil Euros — disappeared overnight.
My team and I assessed our business situation, created an action plan, and took decisive action that enabled the company to weather the storm and later, rebound when the market bounced back.
This was one of the greatest personal and professional challenges of my life, but I learned first-hand what it takes to steer a company in crisis to safety.
I want to share these critical lessons with you, so your business not only survives but thrives once this crisis ends.
I call my crisis management system ReCode™ because it forces you to dig deep into the heart of your company and rethink fundamental aspects of your business. If you’re successful, you will create a clear path to stability and future growth.
Like The Launch Code™, Recode™ is built on two pillars: planning and execution.
PLANNING: CAREFUL CONSIDERATION LEADS TO QUALITY EXECUTION
1. Get a clear picture of your company’s financial health
Make an honest assessment of your business.
How much money do you have in the bank? How much cash are you spending each month, and which of your expenses are ‘need to have’ versus ‘nice to have’? Do you have any unpaid bills – either ones you owe, or ones that are owed to you? How stable is your current client portfolio, and how reliable is your client pipeline?
Don’t fool yourself by being overly optimistic. Be realistic instead. If the outcome of your health check is worrisome, you’re better off dealing with this reality head than burying it.
2. Reinforce or rethink your offering
The fundamental driver of your business won’t change because you are operating in a crisis. People will still buy a product or service because it offers them a benefit that is worth the price.
Your value proposition sits at the core of your business. You must either reaffirm it or identify a reasonable alternative that is more relevant in a crisis-focused environment.
If you’re lucky enough to be one of the handfuls of companies whose business is booming in the current crisis, simply reinforce your communication so people know you’re open for business.
If you are like most other companies, however, you must either identify alternative markets or a new type of customer. Two examples:
- HiFive Apartments – a short-term rentals management company that redirected its inventory of flats to provide shelter for doctors, nurses and other people who are in self-quarantine. They even launched a dedicated website to communicate their repositioning.
- Design Terminal – an innovation agency that moved its three-month-long international startup mentoring program online, offering the same breadth of content and mentor support, but in a virtual environment.
Be careful not to make these critical missteps
- Don’t reposition yourself into something alien to your core business. If you’re a B2B marketing platform don’t suddenly become an educational tool provider. You won’t be credible to new target customers. Plus, when the market rebounds you’ll have to rebuild your original market position from scratch.
- Don’t broaden your focus to include unrelated products or services. Don’t send a message that you’ll do practically anything just to generate revenues. Remember: “If you’re everything to everybody, you’re nothing to nobody.”
- Don’t publish distress calls on social media. People may be sympathetic to your situation, but they have their own problems to worry about. Don’t signal that your company is in trouble. Instead, project an air of confidence and focus on your reinforced or revised value proposition.
3. Set clear and achievable targets
Create a set of goals and related action plans that set out what you want to achieve in the short-term (4 weeks), mid-term (3-4 months) and long-term (after the market rebound). Use these goals and action plans to track your progress. Make sure you stay focused on the right things.
While you should consider your current circumstances, don’t lose sight of why you launched your company in the first place.
No matter how difficult this crisis-focused environment seems, one day this too will pass. In the meantime, take on this difficult business environment with passion and focus.
EXECUTION: TAKE DECISIVE ACTION, ADJUST AS NEEDED
4. Start executing your quick wins
Start implementing your action plan by focusing on the ‘quick wins’ – the clearest, most obvious steps you can take that will deliver the quickest and greatest financial benefits.
In a crisis, cash is king.
Make sure you collect all your receivables, cut ‘nice to have’ costs, renegotiate recurring expenses, or offer customers discounts for early payment. The more cash you can preserve, the stronger you’ll be as you ride out the storm.
On the other side, focus your energy on generating new sales. This is the ‘cheapest’ form of cash, but it comes from new sources of income and continues to support the long-term growth of your business.
Nurture your best customers, speed up negotiations with new clients and reach out to new targets.
Make sure, however, that you don’t agree to unreasonable terms for a short-term gain. Stand up for the value your product or service delivers, and don’t sell yourself short for a deal that may come back to haunt you when the market rebounds.
A word of warning! Just because quick wins are obvious doesn’t mean achieving them will be easy. You’ll have to make some difficult and often agonizing decisions. Keep in mind, however, that only companies that survive can live to fight another day.
5. Evaluate and adjust as needed
Once you’ve started executing your plan, take some time to review the results of your first actions.
You’ll be surprised how many things you thought would be difficult to happen more quickly. Other targets you set will now seem almost impossible to reach.
Clear out as many obstacles to implementation as you can. If circumstances change, feel free to adjust your plan so you continue to focus on getting results.
One method I’ve relied on during difficult times is something I call the ‘One More Principle’. When I’m not making as much progress as I should, I put aside the ‘Big Picture’ and narrow my focus on simply doing ‘one more thing’ that will get me closer to reaching my goal.
This ‘next step’ is usually something simple, like sending an email or making a phone call. I continue to focus on ‘one thing’ and the next ‘one thing.’ After a while, I start picking up momentum and I end up right back on track.
6. Plan for your future
As you continue to ‘recode’ your business, you will inevitably hit difficult periods.
Building a business is hard enough, but it’s even more challenging when you’re facing the headwinds of a global economic crisis.
Make sure you and your team remind yourself of the progress you’ve made in your plan and look for opportunities to celebrate these successes. Send a congratulatory email, organize a celebratory video chat – whatever reminds you of your positive momentum.
In the meantime, don’t lose sight of the keys to your future growth.
Every company has projects that fall into the ‘nice to have’ category and don’t ever get done when business is booming. Put these items on top of your ‘to-do’ list: redesign your website, freshen up your sales materials, tick off that product development backlog.
This way, you’ll be well-positioned to bounce back when the market turns.
Regain control and gather momentum
It’s time you stopped worrying about things that are out of your hands. Take back control of your business’s future.
You deserve to feel like you’re in command of your destiny.
Follow these crisis management principles, and you’ll be ready to tackle this difficult business environment with the same passion and focus that you used to build your business.
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I’ll help you manage this crisis
I’ve packaged ReCode’s™ core principles into five, 90-minute one-on-one mentoring sessions held over 4-6 weeks. I can make sure you apply the principles correctly and experience its benefits almost immediately.