By Glenn Yonemitsu, Managing Director, High-Impact Firms, BDC Advisory Services
We are living in a time of incredible uncertainty. Few business leaders have ever faced a future with “rules of the game” that are so unclear. In the past, the rules of the game have always been known.
How do you set corporate strategy when the rules can change tomorrow? How do you allocate scarce resources when you don’t know the possible returns on your business’ growth strategy?
Most companies see themselves as “market takers”. They agree with the basis for competition, prices set by industry competition, and they fight for market share, based on traditional rules of engagement. Large companies, industry organizations, industry competition, and Government regulators set the rules and standards for their industry. When a challenge like the COVID-19 pandemic presents itself, many companies all become subservient to the restrictions imposed and “accept” the slowdown and down curve.
Then there are a scant few companies who take the road less travelled. They zig, when all the others zag. If everyone expects a downturn of 20%, they look for flat line growth. When everyone else flat lines, they look for 20% growth. They look at every situation from a different perspective. They constantly seek opportunity, especially in times of uncertainty, and they try to create a market when others do not act. These are the “market makers”.
Think about the wine industry in Italy. Wines from Chianti have been produced since the early 1700’s. As Chianti wines became popular over the next 250 years, wineries from a broader and broader region started describing their wines as from Chianti. Not satisfied with this wine fraud, the leading wine producers from Tuscany wanted to protect, promote, and develop their wines. They took matters into their own hands, and set out specific geographic territory, wine making rules, and adopted standards on what can be called “Chianti Classico”, “Riserva” or “Gran Selezione”, and only those wines that adhered to these guidelines, are allowed to use these terms, and have the logo of Chianti’s black rooster on their bottles. These leading wineries took the bull by the horns and became market makers.
Market makers are the ones who take initiative and find opportunities in uncertain times. On the converse, market takers are the companies who don’t do anything and accept a similar pain as the competition.
In 25 years dealing with high-impact companies, I’ve found the best companies – the market makers - focus on just a few simple things which differentiate them from the crowd. How can your company become a market maker? By ensuring your employees feel safe so they can focus on making a difference and by living the right attitude so you can see opportunity.
Ensure your employees feel safe so they can focus on achievement
Take care of your employees. No great company will be able to do anything if they don’t have committed, dedicated and passionate employees.
In order to have dedicated employees, a leader has to ensure they feel safe and secure.
Remember Maslow’s hierarchy of needs, from our Psychology 101 course in College? It applies here. Before you can expect your employees to focus on achievement, take care of the basic physiological and safety needs. Once that’s done, they can address higher-level needs through their work and your company will be the beneficiary of their will to succeed.
Address employee needs quickly. With COVID-19, this foundational issue becomes even more important: it requires mutual trust and it will be influenced by how you’ve treated employees in the past. The faster you support employee needs moving up Maslow’s pyramid, the faster you will (both) reap the benefits.
"The ability to seek opportunity during uncertain times starts and ends with your attitude as a leader, which will rub off on the attitude of your team."
8 steps to having the right attitude
The ability to seek opportunity during uncertain times starts and ends with your attitude as a leader, which will rub off on the attitude of your team. Without the right attitude, you won’t be able to see opportunity; all you will see are obstacles, restrictions and the odds stacked against you. It’s hard for pessimists to see opportunities but with the right mindset, one can see through challenges. Here’s how:
Believe there is always a way out – if you don’t believe there is opportunity, no one else will. If you think you are doomed, you will be.
Keep an open mind –adapting to new demands and needs, considering all options even if you tried something before, being open to brainstorming and building upon ideas can help. Shooting ideas down won’t!
Resolve to take control of your future – accept the situation by taking control and owning it! If you ingrain it in your head that you are in control, then you will be able to take responsibility for your future, and be the master of your own destiny.
Know your core competencies – know what you are truly good at. Think of these capabilities as transferrable skills. This will help you envision how you can leverage these skills in different situations.
Consider what big levers have changed in the world – think about the impacts of the changes on supply chain, what your customers need/want, how your customer’s work/living habits have changed, and ultimately, how these big levers have impacted your range of opportunity.
Look at the situation from various perspectives – if you look at the situation from the same perspective as everyone else, chances are that you will see what they see. If you look at the situation from your customer’s perspective, or from your suppliers’ perspective, you might be able to see something different, and maybe, an opportunity.
Don’t be afraid to be a contrarian – if everyone else zigs, then you can zag. If everyone is exiting a product/service, then maybe opportunity comes to those who stay. If you want different results than others, don’t do the same thing.
Be courageous – reward comes to those who are willing to take on risk. The easy route rarely provides big returns, because most people will follow the easy route.
"Don’t be afraid to be a contrarian – if everyone else zigs, then you can zag. If everyone is exiting a product/service, then maybe opportunity comes to those who stay. If you want different results than others, don’t do the same thing."
How a few companies found opportunity
Last week, I had a regularly scheduled appointment with my family doctor. Given the COVID-19 lockdown, I wasn’t sure I would even have an appointment. Two weeks before, I was informed that it would be a held via videoconference. My doctor had an application-specific video service. He asked me the normal questions, and I was able to provide feedback on my health, using some of the recent health technology offered by my Apple watch (pulse), a sleep ring (oxygen saturation), my blood glucose monitor, and a home blood pressure unit. In fact, my stats were better than normal, as I was able to provide these stats over a certain time, as opposed to a one-off measurement in the doctor’s office. We had a great chat about my health, my exercise and my prescriptions. My doctor issued a blood requisition, that I took to a medical lab that day, and in only 2 days, when he received the results, he sent me an email with his recommendations. In many ways, this may have been the most effective appointment, with the best communication that I’ve ever had with my doctor.
Mad Paws is an online pet care community in Australia whose business model generated revenues by matching services (dog walking, pet sitter services, dog grooming and training services) with dog owners. Due to COVID-19, the demand for these services dropped and revenue from the website collapsed. Instead of being destroyed, the leaders of Mad Paws realized that people’s sensitivity for healthcare peace-of-mind would be heightened during this health crisis. They seized this opportunity to launch a new service offering pet insurance (similar to Medicare), and they opened a whole new revenue stream.
Price Industries is a heating, ventilation and air conditioning manufacturer, with 1,400 employees, based in Winnipeg, MB. When COVID-19 and the resulting lockdown hit, the company could have easily shut down and waited for the all clear. Instead, the company used its knowledge and capabilities to develop a new fan filter unit, that pulls air out of an enclosed environment, creating a negative pressure environment, then filters the air through a HEPA filter, before re-using the cleaned air. This ingenuity and new product allowed them to keep all 1,400 employees employed through the crisis, and they have a whole new business opportunity with this clean air unit.
Be a market maker
Each of these companies refused to lie back and take the market restrictions. Instead, they kept an open mind, they resolved to stay in control of their future, they used their creative knowledge, thought about the big levers that moved, applied their core competencies, looked at the world from the opposite perspective, and they had the courage to do things differently. Because of that, they found opportunity, even in these uncertain times.