Don’t wait for the first positive economic indicators to formulate a plan for growth. By then, it’s too late.
Economic resets are a basic part of the business cycle. I’ve been through many, including the oil crisis in the 1970s when the cost of fuel tripled overnight, the savings and loan crisis, the September 11 attacks and the Great Recession.
Resets are nothing new, but what we’re facing today with COVID-19 is unlike anything we’ve lived through before, even those of us who have been in positions of leadership for decades. We are all learning as we go here. But there are lessons that I learned about survival, resiliency and growth during prior downturns that I hope will help CEOs who are facing tough choices today.
Don’t adjust the strategy. Hit the reset button.
With an event of this magnitude, it’s never business as usual. Adjusting the existing strategy doesn’t go far enough: you need to rethink it entirely. Take all your careful planning, throw it away, take a clean sheet of paper and ask yourself: who are we as a company? What are our strengths? What are our weaknesses? What opportunities exist, and how do we seize them?
If you were reading business books back in the 1990s, you might remember one called Sacred Cows Make the Best Burgers. The book itself is out of date, but the attitude behind it is incredibly relevant: nothing is off limits at a time like this. It’s all fair game, so look at everything with fresh eyes, flip it upside down, and examine it from all angles.
A big part of this reset involves bringing in new perspectives. As new issues surface, ask your people what they think. You hired them for their intelligence and ingenuity, and this is when you need it most. Let them challenge your thinking with a diversity of opinions and ideas. It will help you become stronger and more agile.
Most importantly, get started now. Don’t wait until the dust settles. You need to be aggressive, focused and open to new ideas if you’re going to take the hill while everybody else stays in their foxhole.
While you need to be prepared to let go in order to find a new way forward, the one thing you must hold onto is your company culture.
Be ready to change everything—except your culture.
While you need to be prepared to let go in order to find a new way forward, the one thing you must hold onto is your company culture. You may need to explore new ideas, markets, tools and technologies, but if you discard your core identity, you will lose your bearings entirely.
During the financial crisis of 2008, I was the CEO of Fleet One, an LLR portfolio company that provided fuel charge cards and management information services to vehicle fleet operators. We made a lot of changes and concessions to survive, but we never lost sight of our commitment to being a customer-friendly company. We didn’t reduce staffing to the point where it impacted customer service despite our need to economize and we didn’t change our credit underwriting standards despite the increased risk. In terms of the essentials, as far as our customers were concerned, we were the same company the day before Lehman Brothers collapsed that we were the day after.
That decision resulted in extraordinary growth because at a time when the transportation community needed us most, we were able to be there for them and earn a reputation as a trusted partner.
Create parallel tracks for surviving and thriving.
A lot of CEOs are trying to figure out when they should start transitioning from survival mode to growth mode. What signs should they look for before switching from defense to offense?
My answer is that they need to be pursuing offensive and defensive strategies on parallel tracks from day one. Don’t wait until you start seeing the first positive economic indicators during a crisis to formulate a plan for growth. By then, it’s too late. Instead, every CEO should be following two totally independent tracks right now.
On the defensive track, you are looking to achieve efficiencies while maintaining the company’s core capabilities and the quality of the customer experience delivered. For example, you might examine the core staffing level you need to maintain service levels or shift marketing dollars from branding to customer acquisition to support a healthier cash flow.
On the offensive track, you actively seek out the new opportunities that every crisis generates and make strategic investments into new products or new projects that have the potential to grow revenue. You interview customers to understand their changing needs and establish a task force to deliver on products and services that offer a point of differentiation. Start with the projects that can be implemented the quickest and help the greatest number of customers fastest and then turn your attention to initiatives with a longer-term payoff.
If you can’t present your plan to stakeholders in a way that they can understand or support it, go back to the drawing board.
Be prepared to defend (and adjust) your strategy.
If your strategic plans are changing in response to the current pandemic or any other crisis, you need to be able to communicate those changes to stakeholders, including your executives, channel or technology partners and, in the case of a PE-backed company, your board of directors.
To do this effectively, you have to be clear about why you’re making the changes, what the benefits are and what timeframe is required to implement them. If you can’t present your plan to stakeholders in a way that they can understand or support it, go back to the drawing board. Re-evaluate the thought processes, objectives and narrative that define the new plan until you have something that convinces them.
Few plans are perfect from the start. The vast majority can be improved by new perspectives and opinions, so don’t be afraid to change or enhance your approach based on feedback. That input will only make the plan stronger, so embrace the process.
Here’s the Bottom Line.
CEOs are facing a level of uncertainty that surpasses anything we’ve seen before, but as leaders, we owe it to ourselves, our teams and our customers to stay focused, patient and optimistic. Let the pandemic be your wake-up call—a chance to reinvent yourself as a more agile, focused and resilient organization. Your two primary needs are to survive and to thrive, and the time to get started on both of these goals is right now.
Andy Roberts was the CEO of Fleet One when LLR invested in the company in September 2008. Fleet One, a provider of fuel charge cards for over-the-road fleet operators, was acquired by Wright Express in October 2012. Today, Andy is CEO of insurance claim payments platform, VPay.