Entrepreneurs’ Organization‘s purpose is to help entrepreneurs achieve their full potential by enabling life-enhancing connections, designing shared experiences and providing collaborative learning. Dr. Gleb Tsipursky, CEO of Disaster Avoidance Experts, author, and EO 360° podcast guest, empowers leaders to avoid business disasters by maximizing unexpected opportunities. We asked him about his experience guiding startups facing unexpected challenges during Covid-19. Here’s what he shared:
When dealing with chaos caused by the Covid-19 pandemic, leaders must act decisively and quickly. A strategic pivot may be necessary to keep a firm grip on new and future problems.
As a behavioral scientist, I advise companies in making strategic pivots. I’ve noticed an uptick in both the rate and complexity of their problems, which include employee difficulties working from home, supply chain disruptions, and canceled orders.
As I consult with startups to adapt and plan for the new abnormal, here are five strategies I’ve implemented:
Reassess business model assumptions
I advise clients to start by sharing the issues they’re facing so we can reassess assumptions about the company’s business model.
For instance, a manufacturing startup faced new challenges in sales of its high-tech products. They didn’t have trouble selling before the pandemic because they were known for high quality.
However, as the pandemic took hold, the startup discovered that customers’ accounting departments were demanding lower-cost options unless purchasing managers could prove that the startup’s products brought sufficient ROI.
That’s where the problem was centered. Though the startup focused heavily on innovation, it didn’t offer a direct ROI measurement tool. Due to this, some customers chose cheaper alternatives. That surprised company executives, who were eager to reassess and implement tools to counteract the issue.
Gather critical internal information
After examining business model assumptions, ask department heads to gather internal information critical to revising business strategy. This includes feedback from direct reports on ways their department’s goals, structure and customer relationships could be revised. Ask them to challenge assumptions based on each of three scenarios:
- Scenario one: A vaccine with over 90 percent effectiveness would be found by Spring of 2021, and the pandemic will mostly be over by Spring of 2022
- Scenario two: A vaccine would be found by Spring of 2022, and the pandemic would mostly be over by Spring of 2023
- Scenario three: A vaccine more effective than 50 percent would not be found, just as we haven’t found a vaccine more effective than that for the flu
Go on a (virtual) retreat
Conduct a two-day strategic retreat, in-person or virtual. Spend Day One on broad strategy, and Day Two on adapting operational strategy.
Since the manufacturing startup was focused on innovation pre-pandemic, its team had difficulty accepting the new reality of marketplace demands.
The team kept dodging the idea of changing from innovation to ROI measurement, because innovation was such a cornerstone of its identity. The CEO and I vigilantly steered them back to the correct course and managed to facilitate a productive discussion.
In another company–a late-stage SaaS startup with over 500 employees–we addressed the problem of employee “Zoom fatigue” and work-from-home burnout. Fortunately, I could provide considerable support in this area, given my expertise in emotional and social intelligence.
The key is to remember that such problems originate from much more than just burnout. We addressed the following:
It’s disconcerting that most of us don’t realize that what we’re feeling isn’t just work-from-home burnout. In fact, we don’t seem to recognize what it is we’re missing.
Dealing with this issue doesn’t just mean providing funding for home office setups or allowing flexible working hours. Companies must also facilitate professional development in effective virtual communication and collaboration, as well as emotional and social intelligence.
Operationalize the new strategy
On Day Two of your retreat, focus on operationalizing the strategic changes to your business model. Address potential threats and opportunities for different future scenarios. Revise the new strategy from Day One, if needed. Remember that future scenario discussions should include the three futures outlined above, as well as various economic recovery scenarios.
Here’s how another startup seized a pandemic opportunity: An enterprise data analytics startup identified a way to secure promising client accounts held by several competitors.
The startup’s leadership team noted that most competitors brushed off concerns about Covid. So, they wooed competitors’ clients by changing strategy to share the steps they had taken to become pandemic proof–in stark contrast to competitors. The startup successfully converted a surprising number of new customers.
Implement and revisit regularly
At the close of the retreat, identify next steps for each new initiative, the resources required, and metrics to measure success. Assign one leader to roll out the initiative and provide regular progress reports. Finally, prepare a detailed report for your Board of Directors.
Hold regular status updates, ideally during weekly leadership team meetings. Evaluate the strategy’s progress during a half-day meeting a month after the retreat, and adjust accordingly. Schedule another follow-up meeting after three months.
Five key takeaways
- Start by challenging assumptions
- Have top leaders gather internal information from direct reports
- Conduct a two-day virtual retreat to focus on strategy and operationalization
- Commit to next steps, identifying resources needed, metrics of success, point person, and report to the Board
- Provide status updates weekly, and a half-day progress check and course correction after one and three months.
Though success can never be guaranteed, these steps will help steer your company toward thriving–not just surviving–these troubled times.