3 Ways to Use This Disruption to WIN BIG for the Future

Alibaba. Uber. Airbnb. What do they have in common?

Each rose to prominence during a crisis. 

Hamza Mudassir in the article, “COVID-19 Will Fuel the Next Wave of Innovation” (Entrepreneur Magazine) wrote: 

“The SARS pandemic of 2002-2004 catalyzed the meteoric growth of a then-small ecommerce company called Alibaba and helped establish it at the forefront of retail in Asia. This growth was fueled by underlying anxiety around traveling and human contact, similar to what we see today with Covid-19 … And Airbnb and Uber ‘shot up in popularity’ due to the 2008 financial crisis.”

While some think the world is moving slower, or perhaps on pause, innovation moves at a startling pace during times of crisis. The rapidity of change happening right now in business is the fastest we have seen in our lifetime. 

If you don’t believe it, look around you. 

For example, in my own small world, here’s just a glimpse at what I can do now that I previously couldn’t a few months ago: Visit with my doctor via video, order groceries and have them delivered (within a few hours) to my doorstep, conduct all my calls with almost anyone via video (which, prior to Covid, was awkward for some in the business world), attend world-class art sessions online to learn how to paint, receive a mental health check-up virtually, and get personal yoga training from any expert around the world (and those are just a few examples).

The whole world around us is not merely adapting but discovering new ways to thrive through advanced forms of communicating, collaborating, and connecting.

The question is: Are you making radical changes?

Bold changes in the way we operate were heretofore blocked by our own excuses, or busyness, or just general over-familiarity with “the way we do things around here.” Excuses that we have made in the past made us reluctant to adopt new ideas and resistant to change. In today’s volatile environment, excuses no longer work, and it’s time to lean into the changes -as many others have done- to ensure you are adapting in order to not be left behind. Here are three excuses that deserve to never be uttered again by you and your team, and how to adopt a radically resilient mindset:

(I) “We’re just not really good at change.”  

Virtually everyone is turning their businesses into working labs. 

Hong Lou (Professor of Business Administration at Harvard Business School) and Alberto Galasso (professor at Rotman School of Management) called it “forced experimentation.” 

Lou and Galasso co-wrote an article entitled,” The One Good Thing Caused by COVID-19: Innovation,” and in many ways, the current business climate is the best working lab we’ve ever experienced. Employees are fiercely loyal, more adaptable to change than ever, and willing to experiment. Clients are more open to new ideas than ever before because their old toolkit for getting things done has been completely overturned. Your business has been disrupted to the point that you no can no longer lean on the excuse, “we’ll try that at the right time.” NOW is the time for radical business innovation and your business is no exception if you expect to adapt and survive. 

The first key to capitalizing on the disruption is not to hunker down and hide until the storm is over, but to use this environment as your incubator: it’s an optimum time to test, trial, and deploy bold new ideas that you’ve never before been willing to try.

(II) “We’re going to wait for ‘the right time.’” 

“The future” is much nearer than you think. 

McKinsey and Company call it “the quickening” - the world has experienced 10 years of e-commerce growth in 3 months’ time.

This reflects the study mentioned above by Lou and Galasso, “The demand for new digital products, formats, and the content will intensify. This will speed up automation and digitization investments and generate new products, services, and business models .… Opportunities may abound in enhancing and differentiating physical offerings to compete with the (now improved) remote and digital alternatives that have emerged.”

And these studies are not the only revelations, more and more articles are turning up research about the massive boon in tech adoption. The BVP Nasdaq Emerging Cloud Index tracks the performance of emerging companies that provide cloud software to their customers and they report over an 800% increase. 

Back in the day, when you made investments, they were mostly capital investments. Printers and suppliers invested in equipment. Distributors invested in more office space, built fancy showrooms, some built warehouses, and bought real estate or buildings. Those investments were physical investments and there was some comfort in knowing that you could touch and see your investment and subconsciously, you felt some assurance that those gains were visible. 

But for distributors today, the power of your business resides -not in your capital investments- but in your people and the tools that power your people. I don’t need to prove to you that if you are still in operation today, it’s because of people + partnerships + technology that you survive. In fact, those that are willing to invest more and more in technology solutions for clients and employees are frequently showing up as the emerging winners. On Fortune’s list of 100 fastest-growing companies, for the past two years, over 30 of those companies are technology companies. 

In 2008, I was the CEO of a $10 million dollar print and promotions distributor and then the recession slammed everything to a screeching halt. Revenues plummeted the next year to $4 million. There were many sleepless nights and brutal decisions we had to make, but the one thing that forever changed our future was that the client changed their buying habits. Marketing departments were reduced, forcing fewer supplier partnerships. Those that were winning were companies that could do more with less. We continued to make investments in one key category, tech, and we maintained that relentless spend because it was key to our competitive advantage. 

No, it’s not a capital investment, but it’s the best investment you could ever make in your future. Oh, and one very important footnote: when the market climbed back up, we were ready. After six years of steady gains, in 2014 we hit $9 million in revenue, $1 million less than in 2004 …. but we had more profit: we were literally doing more with less, with more profit at $10 million than at $9 million. Technology enables you to be faster, smarter, and leaner (yet robust) for your clients, and allows you to surpass the competition that remains stuck in the quagmire of risk-averse indecision. Moreover, we realized that the average company, in this industry in particular, does not invest in technology like the rest of the world - we were not going to be average.

In an article from MIT Sloan titled, “The Risk of Not Investing in a Downturn,” they summed up their research with this statement: “investing to create and sustain a competitive advantage is still the single best recipe for dealing with downturns.”

NOW is the right time. 

(III) “It feels too risky to invest right now.” 

There seems to be two general responses from distributors about the current state of affairs: those who are waiting for business to “get back to normal” and those who are rushing to take advantage of an -obviously- changing world. 

A famous Harvard Business Review study of multiple recessions resulted in an article titled “Roaring Out of Recession.” It categorized distinctions between the types of companies who failed and those who won. “Prevention-focused companies” made primarily only defensive moves and were more concerned than their competitors with avoiding loss and minimizing risk, but “progressive companies” deployed an optimal combination of defense and offense: cutting costs, eliminating redundancies, while making investments. 

“The CEOs of pragmatic companies recognize that cost-cutting is necessary to survive a recession, that investment is equally essential to spur growth, and that they must manage both at the same time if their companies are to emerge as post-recession leaders.”

Warren Buffet famously attributed their investment success to one simple principle: “We tend to be fearful when others are greedy and only greedy when others are fearful.” 

Progressive companies stay closely connected to customer needs and invest in the future. Just like every economic challenge before, this crisis will reveal that those who wait, will wilt and be left behind, but those that invest in a real tomorrow, a NEW tomorrow that is clearly here today, will win. 

And remember: everything is accelerating. And it’s no longer the big that eat the small, it’s the fast that eat the slow. You “can’t afford to spend” but you certainly cannot afford to wait. Technology is cheaper than ever before and the options are limitless. Those who continually invest in tech, and particularly invest NOW, will reap the most benefits when business begins to swing upwards again.

All this research, all this change, means that today is a day for HOPE

As we look at the innovation occurring around us through an excruciatingly difficult time, we can take courage that the world is changing and there’s no need for panic due to these changes, in fact, according to Lou and Galasso, “amidst these massive disruptions, a combination of short and long-term innovation responses can provide a ray of hope for businesses.” 

Mudassir surmised it this way, “Black swan events, such as economic recessions and pandemic, change the trajectory of governments, economies, and businesses - altering the course of history … Covid-19 has irrevocably changed the way businesses will compete over the next decade. Firms that choose to capitalize on these underlying changes will succeed and the ones that don’t will get disrupted.” 

So, become a business incubator. Try things. Break things. Make investments in your future, and by so doing, you’ll infuse your business with your own stimulus package that will prepare you for big gains that are sure to come, right around the corner. 

Because the future is no longer “someday,” the future is now.