As we emerge from the state of emergency and enter a period of recovery, now is the time to make your business thrive, not just survive. Below are five behaviors of my most successful clients that have helped them hit the ground running and stay at the top of their game.
1. Prioritize selling new products to existing customers, and existing products to new customers if you want to grow your business fast. You cannot go back to selling the same products to existing customers as we enter recovery. Customers are looking for something new, and fortunately for you and already have a relationship of trust with your business. They will be eager and receptive to seeing what you have to offer. For new customers, your existing products are perceived as new and perception is reality. Existing products are tried and true, and less risky than new products.
2. Eschew head office directives to freeze expenditure. The overseas head offices of a number of non Japanese firms reactively issued blank directives to freeze discretionary spending globally, including in Japan. You ought to disregard these directives, as following them will only make the financial results of your business worse. Total lockdown during the COVID-19 pandemic was blunt instrument used in countries where pandemic management was lacking—that is to say little preparation, belated action, and insufficient testing. In countries where the pandemic was well managed, it was possible to identify outbreak clusters early and deal with them rapidly without the need for total lockdown. The economic result of total lockdown has been devastating in countries where they have been imposed. To make matters worse, a lockdown mentality and its associated behaviors persist among the population even after a lockdown has been lifted. Blanket freezing of expenditure in businesses is much the same as imposing a lockdown. Freezing expenditure is blunt instrument driven by the inability to triage expenditures among those that produce value and those that do not. Similar to total lockdown, expenditure freezes have devastating effect on business performance. In my experience, I have never seen any business emerge with an improved condition following a period of self-imposed austerity. Staff not only reduce costs as instructed but also reduce growth activity—proactivity in sales drops, travel to visit customers is postponed, marketing and innovation activities are put on hold, etc. Staff hunker down as if under siege, and that never serves the business for the better. What’s worse is that a siege mentality among staff persists even after imposed austerity has been lifted.
3. Expand smart expenditure. Increase spending on what delivers the most immediate value to the business—capability improvement, innovation, and expanded market share. Cut where value is relatively lacking. One CEO I know told me how he routinely ignores corporate directives on hiring freezes because in his experience whenever he hires the best people, business growth is the result. Maserati Japan invested in and launched in April a “White Glove” pick-up and delivery service that dramatically increases interaction and business with customers, and why wouldn’t it? This is a new service offered to existing customers, and immediate business growth is the result. Megane no Tanaka, national purveyor of prescription eyewear in Japan, invested in and launched a subscription business model both for adults and children, the take-up of which has been phenomenal. Once again, this too is a new service to existing customers.
4. Embrace disruption. Disruption is good. Crises reshuffle the deck. Now is the time to aggressively challenge an incumbent competitor, launch bold products and initiatives, and capture new market segments. Volatile times need not mean a loss of business. A number of my clients are having a record year. Even among clients that have seen an overall decline in business, certain segments and products have experienced dramatic growth over the previous year. One CEO talked about how his business was able to capture ninety percent of a market segment for his company’s product by acting boldly on a new initiative during the pandemic.
5. Eschew the language and thinking of “good” versus “bad” scenarios, particularly with staff. There is no such thing as best and worst case scenarios or good and bad cases. Such qualifiers are only for those who are afraid of or resistant to change. When a so-called “bad” scenario occurs, staff can feel resigned and disempowered. Yet all scenarios and cases offer business opportunity, if you are willing to seize it. After all, disruption is good. Viewing volatility as opportunity is empowering, and encourages innovative thinking come what may. That is how you and your staff should view volatility. Make sure both your language and actions show it!
If you lead a business, you too can do any if not all of the above. You too can thrive in volatile times.