Why Your Small Business Needs a Consultant

Small Business Consultant

Have you ever found yourself wanting an outside eye to help out your company? Have you felt the need for someone with more specialized skills to assist in a certain area of your business? Do you need someone to help identify problems within your company? Do you just need more time to focus on the day to day tasks and would like to outsource some of your other work in order to supplement your business and your staff? If you answered yes to any of these questions, you may be in need of a small business consultant! 

What is a small business consultant?

Small business consultants are professionals who often specialize in a more niche aspect of business, such as an attorney skilled in business law, certified public accountants (CPAs) or even consulting firms which offer a variety of business-related services, like marketing, management, sales, or advertising. The more common types of consultants include strategy and management consultants, operations consultants, IT consultants, human resources consultants, and sales and marketing consultants.

 

The different types of small business consulting services

To discover which type of consultant may be right for you, dive into learning a bit more about different types of consultants and what they do.

Digital Strategy and Management Consultants can help with expanding your product offerings, widening your marketing footprint, developing a business plan, reorganizing your business for efficiency and cost savings, or even buyout another company. They can assist with your business’ social media, market research, online marketing, and website development.

Operations Consultants can help with increasing your process quality and efficiency. They may work with project management, develop new operation plans, helping to reduce steps or mistakes and increase your profit margins.

IT Consultants are one of the most popular types of consultants, with the rapidly changing pace of modern technology. Different things IT consultants can do include maintenance and support services, application development, application integration, to name a few. They can also assist in updating operating software, updating servers, upgrading internet providers, phones, and much more.

Human Resources Consultants are often used to work on employee needs. They can be helpful in recruiting, training, teaching, and improving employee retention. You may also use them as leadership and communication development specialists, and use them to identify the strengths and weaknesses in your staff..

Creative Consultants, PR and Media Consultants are becoming more popular with the expansion of media and digital marketing. The consulting practices and services may offer include graphic design, videography, photography, branding, promotions, campaigns, outreach, events, and communications.

Sales and Marketing Consultants create marketing strategies, launch advertising campaigns, build a high level cohesive brand, make sure you are generating good business, even initiate the sales process.

So, why would you need one of these types of consultants?

Why you may need a consultant

There are many reasons why a small business may need a consultant. You may want added expertise, a fresh set of eyes, a seasoned problem solver and idea generator, a trainer, an influx of new life into the business, or an objective standpoint on business matters.

A small business consultant can offer…

Added expertise and specialized skills

Perhaps the most common reason small business owners hire consultants is for business growth. They allow them to gain access to special skills they may not have among in-house employees. These skills can range from marketing to finance specialists to recruiters. Hiring consultants makes it easy for you to gain access to expertise and specialized skills on demand, whenever you may need.

Hiring consultants is a cost-effective way to supplement your staff, too. While small business management consulting rates are usually a bit higher than a full-time employee, the money saved by only hiring a consultant when their skills are needed, rather than full time, will be more cost effective in the long term.

A fresh set of eyes, an idea generator

When dealing with an issue or important decisions in your life, do you often turn to friends and family for advice? It can be useful to do this in a business, too! Because consultants have a track record of working with many different companies, they may have seen an issue that you may come across in your business, and often they will have a creative solution to problems or experience in handling something you might not have dealt with before. Consultants are seasoned problem solvers who are able to offer fresh, innovative ideas that clients may not have been able to come up with on their own.

A trainer or teacher

Consultants may help companies keep employees on top of new business trends or developments in their field, consultants may be hired to teach. Consultants can also be useful in training new staff when you don’t have the time to do so yourself. 

An influx of new life into the business

No one likes change, least of all corporate America. But change can be good, and often, change is necessary. Consultants can help usher change into an organization seamlessly, whether it be through staff leadership retreats, workshops, e-learning, training programs, new technology, or helping to teach a new business ideology or way of communication, consultants can provide those much needed new methods and ideas into your business, as well as your staff!

Image Source: Getty Images 

Consultants are a valuable resource for any small business, and the impact they can have on a company should not be underestimated. If your annual revenue has been the same or declining in the last 3 years, your business isn’t serving you, you need help managing your growth curve, or your team isn’t hitting goals month over month, you should consider hiring a business consultant.

We are here to help you navigate so schedule a call to discuss your specific business goals

Death of the office

 

In the spring of 1822 an employee in one of the world’s first offices – that of the East India Company in London – sat down to write a letter to a friend. If the man was excited to be working in a building that was revolutionary, or thrilled to be part of a novel institution which would transform the world in the centuries that followed, he showed little sign of it. “You don’t know how wearisome it is”, wrote Charles Lamb, “to breathe the air of four pent walls, without relief, day after day, all the golden hours of the day between ten and four.” His letter grew ever-less enthusiastic, as he wished for “a few years between the grave and the desk”. No matter, he concluded, “they are the same.”

The world that Lamb wrote from is now long gone. The infamous East India Company collapsed in ignominy in the 1850s. Its most famous legacy, British colonial rule in India, disintegrated a century later. But his letter resonates today, because, while other empires have fallen, the empire of the office has triumphed over modern professional life.

The dimensions of this empire are awesome. Its population runs into hundreds of millions, drawn from every nation on Earth. It dominates the skylines of our cities – their tallest buildings are no longer cathedrals or temples but multi-storey vats filled with workers. It delineates much of our lives. If you are a hardworking citizen of this empire you will spend more waking hours with the irritating colleague to your left whose spare shoes invade your footwell than with your husband or wife, lover or children.

Or rather you used to. This spring, almost overnight, the world’s offices emptied. In New York and Paris, in Madrid and Milan, they ready themselves for commuters who never come. Empty lifts slide up and down announcing floor numbers to empty vestibules; water coolers hum and gurgle, cooling water that no one will drink. For the moment, office life is over.

Even before coronavirus struck, the reign of the office had started to look a little shaky. A combination of rising rents, the digital revolution and increased demands for flexible working meant its population was slowly emigrating to different milieux. More than half of the Ameri­can workforce already worked remotely, at least some of the time. Across the world, home working had been rising steadily for a decade. Pundits predicted that it would increase further. No one imagined that a dramatic spike would come so soon.

It’s too early to say whether the office is done for. As with any sudden loss, many of us find our judgment blurred by conflicting emotions. Relief at freedom from the daily commute and pleasure at turning one’s back on what Philip Larkin called “the toad work” are tinged with regret and nostalgia, as we prepare for another shapeless day of WFH in jogging bottoms.

But we shouldn’t let sentimentality cloud us. Offices have always been profoundly flawed spaces. Those of the East India Company, among the world’s first, were built more for bombast than bureaucracy. They were sermons in stone, and the solidity of every marble step, the elegance of every Palladian pillar, were intended to speak volumes about the profitability and smooth functioning within. This was nonsense, of course. Created to ensure efficiency, offices immediately institutionalised idleness. A genteel arms race arose as managers tried to make their minions work, and the minions tried their damnedest to avoid it. East India House, in which Lamb worked, could give call centres a run for their money in the art of micro-managing. At the start of the 19th century, the company introduced an attendance book for employees to sign when they arrived, when they left and every 15 minutes in between. Not that it proved much use. “It annoys Dodwell amazingly,” wrote Lamb. “He sometimes has to sign six or seven times while he is reading the newspaper.”

The first offices belonged to governments or quasi-government bodies like the East India Company. Running a country, let alone an empire, requires a lot of paper to be pushed and governing proved simpler when all those functionaries were in one place. But it was the Industrial Revolution that really changed things. Coal, steel and steam started to spin the wheels of the English textile industry ever faster and railways unspooled across the countryside. The new steam trains shuttled ever more workers into the cities, where they plumped themselves behind desks in order to practise ancillary professions – finance, law, retail – that flourished on the back of heavy industry. The rhythms of the countryside were left behind. Work, which had once been patchwork, piecemeal and often weather dependent, became the fabric of life itself.

The most transformatory aspect of offices was less the buildings themselves than the sheer amount of time we spent in them. This would have seemed alien to many earlier societies. Mary Beard, professor of classics at Cambridge University, notes that elite Romans strived to switch off as much as possible. “Our division between leisure and work is reversed in the Roman world. What we mostly do is work and, when we’re not working, we’re at leisure.” In Rome it was the other way round for the elite: “The normal state of play is otium, it’s leisure. And sometimes, you’re not at leisure, you’re doing business, which is negotium.” Though the English word “business” has an inbuilt aura of action and industry, the Latin neg-otium – literally “not leisure” – has an almost grudging sense of pleasure denied.

Romans didn’t have to go to a special place to work. Their tablets and styluses were every bit as portable as our own, a feature that elite Romans took full advantage of. Two thousand years ago Pliny the Younger, an author and lawyer, wrote a letter to his friend Tacitus. He had found, he said, a splendid new method of working. Instead of going about his business at a desk, he had decided that day to combine it with a boar hunt. He sat next to his nets “not with boar spear or javelin, but pencil and tablet, by my side”. After expanding on the pleasure of his method for some time, Pliny (the office boar) concluded that this was a remarkably productive way to work since “the mind is stirred and quickened into activity by brisk bodily exercise”. He concluded by advising Tacitus, “whenever you hunt, to take your tablets along with you”.

Few office workers have been indulged to this extent. In the 20th century, the people who had once designed factories turned their attention to offices. The moving parts in these machines were humans and their output merely paper but, it was reasoned, the same principles surely applied. In America teams armed with stopwatches, and a firm belief that a well-oiled office was a wonderful thing, recorded how long each task took. Anything that added extra tick-tocks of time received a cross in their recommendations. Frederick Winslow Taylor, who pioneered time-and-motion studies in the 1890s, concluded that workers functioned best when seated at lines of desks with flat tops, as though in a school-­examination hall. The fact that other studies subsequently found that workers largely work best when being observed for studies on how well they work mattered not a jot. The open-plan office had been born.

When time-and-motion studies examine offices today, their results can be dispiriting. Office-work takes up not merely the bulk of our time but the best part of it, the hours when we are alert and alive. Home, and its occupants, has the husk. Most managers spend at least 20 hours a week in meetings, according to a study by Bain & Company in 2014. Over the course of a lifetime that amounts to nearly five full years. Many of these meetings, in wistful retrospect, might have profitably been skipped.

But getting work done has never really been the point of offices. In 2004 Corinne Maier, a French psychoanalyst who at the time was working at EDF, the French electrical giant, published a book called “Bonjour paresse”, or “Hello Laziness”. The critique of corporate culture became an instant international bestseller. Maier argues that, far from aiding efficiency, offices are “useless” since workers “lose a lot of time going to meetings and speaking the jargon and doing in fact very little work”. She found that she could “do everything I had to do in just two hours in the morning”. Thereafter she busied herself with her own projects, which included writing an academic thesis and several books. “I was very efficient,” she says, cheerfully. EDF, evidently considering that this was not the sort of efficiency it had in mind, sent her off to a disciplinary hearing.

Maier might have become a bestseller but on the whole writing about offices is not – at least in the West – an instant route to stardom. Lamb’s letters are typical. His correspondent for that first, springtime letter was William Wordsworth, the great Romantic poet, who filled his days with walks in the Lake District and his pages with dancing daffodils. Lamb, by contrast, filled his days in London’s financial district and his pages with the price of tea. Though Lamb’s is the life we lead, Wordsworth is far better remembered.

It’s not just poetry but fiction that tends to ignore the office (China, where top-selling novelists write books with such thrilling titles as “The Civil Servant’s Notebook”, is a rare exception). Though great writers have tackled the subject, including Balzac, Dickens, Flaubert, Melville and Kafka, they do so more in satire than celebration. Joshua Ferris, an American novelist, won literary plaudits for “Then We Came to the End”, a novel that sustained a narrative in the first-person plural to demonstrate the obliteration of individual character by corporate identity. But more often than not the office, which is ever present in our life, is a great absence in literature.

Poets have been even more scathing. John Betjeman wished for bombs to fall and “blow to smithereens/Those air-conditioned, bright canteens”. In “The Waste Land”, T.S. Eliot (who had once worked in Lloyds Bank) saw the crowds of commuters crossing London Bridge in terms of Dante’s vision of hell: “I had not thought death had undone so many.” Walt Whitman sneered at clerks as men “of minute leg, chalky face and hollow chest”.

There is more than a dash of superiority in such attacks, but there are good reasons to be critical of offices. Many of the more recent examples are aesthetic embarrassments. Where Ancient Rome had the Colosseum, Renaissance Florence had Brunelleschi’s dome and Byzantium had the Hagia Sophia, we have endless, interchangeable glass-and-steel boxes. This, says Thomas Heatherwick, a British designer, is because the design of offices – indeed all public buildings – has been “lazy”. In the past, he says, workplaces “could get away with just being a desk”, much as shops could get away with “just being somewhere which had stacks of socks or stacks of underpants”. The digital revolution means that such complacency risks redundancy. Now, says Heatherwick, there has to be good reason for you to leave your home, otherwise “why would you go?” Time for the office to sharpen up.

Like a dad at the disco, the office has been trying to do this for a while. Daring architects have broken the mould to construct buildings in the shape of gherkins, cheese graters and walkie talkies – and that’s just in London. To change the stale spaces inside, startups introduced ping-pong tables and ball pits (“dumb fun”, sniffs Heatherwick). Then they offered free food in an attempt to keep workers perpetually in their embrace. Who needs to go home for dinner, when your company will provide you with a tastier one than the pot noodle waiting in your cupboard? And then came WeWork, a sub-letting company that somehow drew cult-like adulation by giving out free biscuits and beer. It helped that its chief executive was Adam Neumann, a man who looks like Christ reimagined by Mattel, with a Ken-like sweep of hair, dazzling white teeth and a firm belief in his power to save us from the hell of offices without cucumber water and succulents. For a while everyone believed in Neumann. Until, suddenly, they didn’t. Last year, WeWork’s valuation fell to a sixth of the $47bn that had once been mooted and Neumann resigned. Offices, of course, needed to be more than a workplace with superior snacks. Heatherwick reckons they should be inspiring “temples” in which to toil, places of beauty that we can admire, even love. It is telling that though his company does have offices, he brands his practice a “studio”. The word office, says Heatherwick, “brought me down”.

Offices can be not just offensive to the eye but harmful to the body. Sitting isn’t quite the new smoking, but it certainly won’t do you any good. A life lived on one’s bottom increases the risk of heart disease, type-2 diabetes, some cancers and all manner of back problems. Offices also entrench social inequalities. The top dog is more likely to hire in his own image, perpetuating male privilege. In 2018 there were more men called Steve than there were women among the chief executives of FTSE 100 companies. Offices even tend to be more physically unpleasant places for women than for men: as a recent study showed, the ambient air temperature is generally set to suit “the metabolic rates of a 154-pound, 40-year-old man” (probably called Steve). Men are just fine; women freeze.

The office has further-reaching patriarchal ploys up its sleeve. Chief among these is its response to children. Or rather lack of it. For most of history, workplaces ignored children entirely (the run on deposits precipitated by the arrival of the Banks twins at their father’s place of work in “Mary Poppins” shows the dire consequences of offspring turning up at the office). The Angel in the House, as Victorians fondly referred to their wives, was assumed to handle all that. In the 20th century the angel lost her wings as women entered the workplace. Offices responded to this momentous social change by making no concessions at all. As a result, working women had to straddle the gap between angel and executive, a cause of immense and continuing stress. Even more tryingly, they had to endure endless stock photos of women in suits holding babies and tearing out their hair. A minor branch of the publishing industry sprang up offering books with querulous titles such as “I Don’t Know How She Does It”.

The office’s ongoing indifference to children has resulted in the social phenomenon that Emily Oster, professor of economics at Brown University and author of “Cribsheet”, a data-led guide to raising kids, calls “secret parenting”. Parents strive to keep up the old pretence that children don’t exist, deploying techniques that range from not putting up pictures of one’s children at work, to pretending that they themselves are ill so that they can care for genuinely sick infants lest, says Oster, people “think [they’re] prioritising parenting”. As a working parent, she says, “someone is always more or less running around in the background”.

Despite the commute and the colleagues, the sitting and the stale meetings, offices bring many of us something else too: joy. Lucy Kellaway, who wrote a long-running column in the Financial Times on the absurdities of office life, talks of the “great artificiality” we embrace the moment that we step into an office. “We pretend that our clothes are always in order and that we are entirely professional and impersonal. Whereas probably in our heads and definitely in our homes there is an awful lot of unravelling and farting going on.”

And what a wonderful thing that artifice can be. Now that we are all working from home, amid the children, the toast crumbs and the laundry, we are realising that the pretence of an orderly life at the office is also a liberation. It allows each day to have its own architecture, its rhythms of departure and arrival. Putting on a perfectly ironed silk shirt or a crisp suit and leaving the house may be contrived but it is also, says Kellaway, “one of the beauties of working life…It allows us to be a different person. And we’re all so fed up with who we are, the opportunity to be someone else, someone a little bit more impressive, is just so tempting.” When such an escape is denied us, that allure may only grow.

And so, for all the threat faced by the office, there is also cause for optimism about its future. These days the “hyper-physical…is so cherished,” notes Heatherwick. Sales of records are at their highest in years, book covers have rarely looked so beautiful. Though many of us might have been loth to admit it until this spring, all those desks and all those people, all that bustle and time-wasting, have their benefits.

Humans need offices. Online encounters may be keeping us alive as social beings right now, but work-related video meetings are too often transactional, awkward and unappealing. After the initial joy of peering into each other’s houses on Zoom, we are confronted with people’s heads looming even closer than we see them across the desk at work, and we gaze in horror – half of it self-awareness that we, too, must look awful – at thinning hair and double chins. We become freakish specimens rather than people. No Skype chat can replicate what Heatherwick calls the “chemistry of the unexpected” that you get in person. Offices may not fill the pages of poetry anthologies but, says Kellaway, they “can be as moving as anywhere on Earth. Because what moves us is not sitting at our computer, it’s the relationship that we have with people.”

For all his grumbling, Charles Lamb believed something similar too. When Wordsworth seems to have grown a trifle too smug about the sublime joys of the natural world, Lamb snapped back. “I don’t much care if I never see a mountain in my life.” But he did care for the city and he certainly loved offices. All his complaints were, he wrote, mere “lovers’ quarrels”. Above all, he loved his desk. For it was that “dead timber of a desk that makes me live”.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

COVID-19: Managing the human and business impact of coronavirus

The COVID-19 pandemic remains a health and humanitarian crisis, but the business impact on organizations is now profound.

What to do now. What to do next.

 

As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges. MWC is helping enterprises address the short- and long-term consequences. Among the top priorities are protecting their people, building resilient supply chains and putting in place new ways to serve their customers.

Here we address specific business impacts across a range of function areas. We will update these pages as the crisis evolves and as companies seek to address subsequent challenges.

Impact on Customers: Acting to maintain responsive customer service

The impact of the coronavirus outbreak requires brands to move at unprecedented speed to serve their customers with quality while caring for their employees with compassion. That means re-evaluating how contact centers are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support the increase in contact center volume.
Leaders that can make the shift to new ways of working will help reduce potential revenue loss, forge new levels of trust with their workforce, and position their businesses for renewed growth once the pandemic subsides.We recommend that contact center executives address three critical areas:

Impact on Supply Chain: The need for supply chain resilience

The impact of COVID-19 on supply chain disruption was already clear when the coronavirus outbreak was confined to parts of Asia. With the virus spreading rapidly, and several economies and regions now in lockdown, the severity is greater still.
The supply chain is critical in getting goods and services quickly, safely and securely to those at risk of infection or who are working at the frontline of the medical response. Companies have a responsibility to protect the health and welfare of their employees, their supply chain workers, and the wider communities they operate in, while maintaining a flow of products and materials.Companies should consider executing the following short-term tactical plan:

  • Within 72 hours: Assess current operations and outline initial recommendations
  • Within 1 week: Establish command center and begin rapid response deployment
  • Within 2 weeks: Rapidly adjust operations and continue response cycle
  • Within 4 weeks: Establish an ongoing operating capability

A continuous cycle of risk sensing, analysis, configuration, response and operation will help to optimize results and mitigate risks:

Impact on Leadership: The need to build human resilience

The greatest immediate impact of the COVID-19 outbreak is on workforces. Organizations are therefore focusing on their primary responsibility: caring for their people while rapidly managing the shift to new patterns of work.
At this critical time, they must see through these changes in ways that gain and maintain the trust of their people. That trust depends on leaders demonstrating their care for individuals as well as the wider workforce and community. It means sharing a clear plan and transparently showing how decisions are made. And it requires leadership teams who can proactively respond rather than react, anticipating their people’s changing needs.MWC analysis shows that even in the best of times, people’s trust and engagement at work is a function of three human needs: physical, mental and relational. These needs are magnified during times of crisis. Leaders who rise to the challenge by meeting them will build higher levels of human resilience that, in turn enable their people to adapt, engage and serve customers.
It does not fall to Chief Human Resources Officers to create the right environment to satisfy these human needs. All members of the C-suite must actively play their roles. We suggest 10 immediate steps that C-suite leaders can take to build human resilience.

Impact on the Workplace: Creating a digital elastic workplace

One of the immediate impacts of COVID-19 is higher rates of sick leave. Another is the need to manage an immediate shift to remote working. These challenges can be addressed by creating an Elastic Digital Workplace. Interventions will differ for each organization, but they should be based on the following foundations:

  • PROTECT AND EMPOWER YOUR PEOPLE:
    Adjust your workplace to enable your people to work remotely through digital collaboration tools. Build the necessary skills around these new ways of working. Start cultivating a digital culture. Construct a workplace of trust.
  • SERVE YOUR CUSTOMERS’ CORE NEEDS:
    Adapt to changing global and local conditions by serving your customers’ core needs, including being transparent in your operations and compassionate in your engagements all of which will create deeper, more trusted relationships.
  • ESTABLISH BUSINESS CONTINUITY:
    Ensure supplier relationships and business to business processes are effectively supported. Develop new business processes to adapt to new ways of collaborating and decision-making.

An Elastic Digital Workplace is enabled by policies and culture, technology and communications. The fundamental elements include collaboration tools, robust network connectivity to enable virtual working and advanced security procedures. As important are clear business continuity working protocols and communications, as well as guidance for employees, partners and customers.

We are here to help you navigate so schedule a call to discuss your specific business goals


COVID-19: Managing cash flow during a period of crisis

Coronavirus cash flow implications across extended supply chain

This piece suggests ways organizations can mitigate damages to their business during this volatile event.

As a typical “black swan” event, COVID-19 took the world by complete surprise. This newly identified coronavirus was first seen in Wuhan, the capital of Hubei province in central China, on December 31, 2019. As of March 2020, the virus has infected over 90,000 people, and led to more than 3,000 deaths. More importantly, more than 75 countries are now reporting positive cases of COVID-19 as the virus spreads globally, impacting communities, ecosystems, and supply chains far beyond China.

The focus of most businesses is now on protecting employees, understanding the risks to their business, and managing the supply chain disruptions caused by the efforts to contain the spread of COVID-19. The full impact of this epidemic on businesses and supply chains is still unknown, with the most optimistic forecasts predicting that normalcy in China may return by April,1 with a full global recovery lagging depending on how other geographies are ultimately affected by the virus. However, one thing is certain: this event will have global economic and financial ramifications that will be felt throughout global supply chains, from raw materials to finished products.

Responding to the immediate challenge

Borrowing from the lessons learned from the SARS outbreak in 2003, the 2008 recession and credit crunch, and the last black swan event to significantly impact global supply chains–the Japanese earthquake of 2011–we offer the following practices and strategies for consideration:

  • Ensure you have a robust framework for managing supply chain risk
  • Ensure your own financing remains viable
  • Focus on the cash-to-cash conversion cycle
  • Think like a CFO, across the organization
  • Revisit your variable costs
  • Revisit capital investment plans
  • Focus on inventory management
  • Extend payables, intelligently
  • Manage and expedite recievables
  • Consider alternative supply chain financing options
  • Audit payables and recievables transactions
  • Understand your business interruption insurance
  • Consider alternative or non-traditional revenue streams
  • Covert fixed to variable costs, where possible
  • Think beyond your four walls

What’s next: Recovering and returning to normal business operations

Cash flow management needs to be an integral element of a company’s overall COVID-19 risk assessment and action planning in the near term. Even for companies that have not yet been adversely affected, we recommend management teams with concerns about COVID-19 actively evaluate their cash flow requirements, develop appropriate actions under various scenarios, and assess potential risks in and to their customer base and supplier network.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

Practical workforce strategies that put your people first

In moments of uncertainty and concern, it’s not only about what leaders of organizations do but equally how they do it that matters.

COVID-19 is taking the world by surprise, causing a great deal of uncertainty and raising issues that require thoughtful, people-first responses. This newly identified coronavirus was first seen in Wuhan in central China in late December 2019. As we enter March 2020, the virus now has a global reach on all continents except Antarctica. As the virus spreads, communities, ecosystems, and supply chains are being impacted far beyond China.

In January 2020, ahead of the Lunar New Year and as health concerns were still growing, MWC conducted a survey in China of human capital policies and practices. The survey drew over 1,000 responses from enterprises operating in China, including a cross-section of private, foreign, and state-owned enterprises as well as not-for-profit organizations.

The survey shows that from the beginning of the COVID-19 outbreak, the immediate focus of employers has been on ensuring the health and safety of their employees:

  • Ninety percent of the employers believe it is an urgent requirement to provide their employees with remote and flexible work option.
  • Energy, resources, and industrial companies encounter the biggest constraints in offering flexible working and remote solutions, and have focused on providing epidemic protection—they have been ensuring sanitation, personal protective equipment, and safety of the workplace environment.
  • More than half of government and public service entities are focusing on addressing employees’ psychological stress.

Authorities internationally are taking decisive action to respond to this emerging public health threat, which has caused the business community to consider the adequacy of its own preparedness measures.

It’s important to remember we have faced crises like this in the past and will face them again in the future. We need to be prepared, rational, and even altruistic in response. If there is disruption, there will also be recovery, so how we act in a time of crisis can also inform our long-term impact.

Responding to the immediate challenge: a framework to view the impact on your people.

 

*We are here to help you navigate so schedule a call to discuss your specific business goals

How to Achieve Resilient Growth Throughout the Business Cycle

The world is currently in the longest business cycle since the National Bureau of Economic Research has kept records. Investors, executives, and policy makers scratch their heads in wonder as they try to make sense of this new phenomenon. The question many companies want to know is where are we in the business cycle? Are we at the peak with growth about to come tumbling down, or still on the climb where rising growth levels can be expected?

In the U.S. there are clear indicators that we may be at the peak. These include the lowest unemployment in 50 years, rising incomes across all races and job levels, a stock market that continues to reach historic highs (even with the recent volatility sparked by the spread of coronavirus), and a GDP that has been expanding for more than 10 years, beating other expansion cycles. Simultaneously, we see other indicators associated with the trough of the business cycle, including low interest rates and low inflation.

Despite the macroeconomic uncertainty and the unpredictable business cycle, companies need to develop their investment and growth strategies. The question they face is how do you build growth and resilience, irrespective of the stage of the business cycle? Fortunately, our research provides an answer.

Buck the business cycle. Strategize like a market creator.

As we identified in our research, there are two types of strategy. One is market-competing strategy that focuses on beating rivals in existing markets – what we think of as red ocean strategy. The other is market-creating strategy that focuses on generating new markets which we think of as blue ocean strategy.

In our research journey over the last 30 years, we found that while both types of strategy have their role to play, when it comes to growth resilience blue-ocean market-creating moves stand out. They not only unlock a growth edge when economic conditions are favorable, they also generate resilient growth in the face of business cycle downturns and unfavorable economic conditions. How so?

When economic conditions are favorable, all firms tend to benefit by a rising economic tide. But it is market-creating firms — and the leap in consumer surplus they unlock through their innovative value — that gives them a growth edge, as they not only capture a greater share of rising demand, but also pull all-new buyers into the market.

Adverse economic conditions only magnify the growth edge attached to market-creating moves, because, when the economy is in a downturn, there is a natural flight to value for money. Whether they’re short on cash or simply overly cautious, people become far more selective about the products and services they choose to buy and those they stop purchasing. Those forgone products and services tend to offer incremental value, while the chosen ones offer a leap in value, or the largest consumer surplus, that makes people’s lives better. Under these conditions, market-creating moves — which break away from existing offerings and offer buyers a leap in consumer surplus — fast become the products and services of choice, allowing them to better buck contracting markets and rebound faster.

Look no further than the companies that rapidly bucked the 2008 financial crisis – Apple, Amazon, Salesforce, Cirque du Soleil, or even the U.K. charity, Comic Relief’s Red Nose Day. All achieved a rapid bounce back and exceptional growth despite the economic crisis. And each countered a reliance on market-competing moves with a strong bias toward market-creating strategies that offered buyers a leap in value.

Contrast this with Microsoft, a market-competing dominator in its highly profitable Windows and Office products. It wasn’t until Satya Nadella, its new CEO, recently shifted Microsoft’s to a balance of market-competing and market-creating strategies that Microsoft again became a rising star. After 10 years of an essentially flat stock price, Microsoft’s new market-creating focus has catapulted it into the rarified $1 trillion market-cap club. Its new cloud-based product Azure is set to become a new growth engine for the company.

How to build resilient growth

So, what actions should companies take to best manage growth through market cycles? Here are four pieces of advice borne out of our 30-year research journey to the blue ocean.

First, to create growth resilience, focus on building a healthy, balanced portfolio of market-competing and market-creating strategic moves, of red and blue ocean strategies. Both are important: market-competing moves to generate today’s cash; market-creating moves to ensure tomorrow’s growth. Relying on market-competing moves alone, as many companies do, won’t build growth resilience across the business cycle. It will hold you hostage to swings in the business cycle.

Second, don’t wait for growth to slow to make market-creation a strategic priority. Act now. In a downturn you want to be buffered by your market-creating move, and that can only happen when your market-creating move is already launched or set to launch. It is in economic downturns that you need to rely on the resilience of market-creating growth, and for that you need to be prepared in advance.

Third, ensure that your market-creating efforts are a core component of your corporate strategy and not siloed into a function, effectively a side show. If you want to achieve market-creation you need to make it a priority. How best to know if you do or don’t? Check who owns the initiative. Is it your top management — like at Apple, Amazon, or Microsoft under the leadership of Nadella? If not, it should be. That sets an important tone, driven from the top, that market creation is front and center to your company’s future.

Lastly, remember technology itself doesn’t create markets. What creates new markets is the use of technology. Is it linked to value innovation or not? Will your product or service make a positive change in peoples’ lives, and hence unlock a windfall of consumer surplus? There are lots of technology companies out there. But the ones that achieve resilient growth across cycles — not only in an upturn — are the ones like Amazon, Apple, and Netflix that link innovation to value. That’s why so many people are loyal to them.

Don’t wait for monetary policy adjustments or fiscal stimulus to propel your growth. You have limited — if any — control over these. Instead, look to yourself. The good news is you need not be driftwood on the roaring ocean of the business cycle, rising and falling with the vicissitudes of the market. We can all be the captain of our ship when we strike the right balance between market-competing and market-creating efforts. Red ocean and blue ocean strategies are not a binary choice. Companies need both. But to strike a healthy balance, most companies need to put a lot more heft behind market-creating moves and anchoring these efforts in the heart of corporate strategy.

 

*We are here to help you navigate so schedule a call to discuss your specific business goals

Are Your Company’s Strengths Really Weaknesses?

Look at a map of the world drawn upside down. It’s a good way to challenge your assumptions about the way the world is — especially which continents and oceans are bigger and which are smaller. Looking at the business world upside down has a similar effect: It challenges your assumptions about company characteristics and what they mean for an organization.

In an upside-down business world, big companies are brought down by their supposed strengths or toppled by smaller and seemingly weaker rivals. Small companies find ways to turn deficiencies into advantages or to leverage the scale and capabilities of larger competitors against them.

In the right-side-up world, strengths remain strengths and weaknesses remain weaknesses. That does seem to hold true in stable environments where technologies and market structures are more or less fixed. But as many well-known strategy theories recognize, the business landscape is far from unchanging. More often than not, the upside-down world is the one we actually live in.

Rethinking SWOT

A venerable tool of business strategy, SWOT analysis, can help executives navigate this reality. Traditionally, this framework has you conduct an internal examination of your organization’s strengths and weaknesses, scan the landscape to identify external opportunities and threats, and then synthesize all four factors into a strategic plan.

The downside of traditional SWOT is that it doesn’t account for the more dynamic forces at work in business. To address them, we need to take the model apart and reconstruct it, like this:

The retooled framework recognizes that threats and opportunities can come from within as well as from without — and that not just your own capabilities and deficiencies but those of other players matter. Because of this, it has companies examine two additional factors: others’ strengths and others’ weaknesses. Critically, it acknowledges that the strengths of an organization may actually pose a threat to it while its weaknesses may present opportunities.

Your Strengths and Weaknesses

The idea that your strengths can turn into risks was expressed very memorably by Harvard Business School professor Dorothy Leonard, who argued that an organization’s core competencies often harden into “core rigidities.” Features that served the organization well in the past — such as its values, skills, and managerial and technical systems — can become obstacles with new projects.

In his 1996 book, Only the Paranoid Survive, former Intel CEO Andy Grove went so far as to suggest that a company’s biggest core rigidity might be its top management. There’s an evolutionary process, he argued, by which people with the skills and mindset for the prevailing business environment rise to the top of an organization. And when the environment changes, as it inevitably does, they may be precisely the wrong people to lead the organization.

Strengths can also turn into threats at the industry level. Take the taxi business. A market monopoly in many cities, it looked stronger than ever in 2009. That was the year a smartphone-enabled ride-hailing service, then called UberCab, was founded. Over the next several years, many taxi businesses found out just how much their market dominance had let them ignore customer service and technology that could connect passengers and drivers. It’s a classic illustration of how a powerful market position can lead to life-threatening underinvestment in innovation.

For an example of a supposed weakness that turned into an advantage, let’s look back to World War I. British army officer T.E. Lawrence (the famous “Lawrence of Arabia”) helped organize an Arab uprising against the Ottoman Empire, an ally of Germany that then ruled much of the Middle East. The British military establishment was skeptical, believing the nomadic and lightly equipped Arab armies were too weak to take on the Turks. Lawrence realized these characteristics actually gave the Arabs an opportunity. He avoided the Turkish garrisons and led fast-moving and highly successful guerrilla attacks on the main railway line supplying the Turkish army.

A century later, SpaceX is playing the weakness-opportunity card against giant players such as Boeing and Lockheed Martin in space technology. SpaceX lacks the experience and financial resources of the incumbents. But those apparent weaknesses have led it to develop a series of innovations — such as the use of cheaper consumer electronics in its rocket components — that significantly reduce production costs. The incumbents would need to unlearn some of their long-standing habits to make rockets the way SpaceX does.

Others’ Strengths and Weaknesses

The idea that your competitor’s strengths present an opportunity to you can be found in many cultures. The Japanese art of judo, for instance, teaches you how to turn the weight and force of your opponents against them.

In its early days Pepsi used this approach to challenge the soft drink front-runner, Coke, pursuing a variety of strategies that Coke was loath to copy. They included low price (expensive for Coke to match over its larger customer base), distribution in new supermarket chains (a conflict with Coke’s traditional channels at the time), and lifestyle advertising targeting the younger generation (not in sync with Coke’s “heartland” image).

Today a similar battle may be unfolding in coffee. In China, Luckin Coffee, a recent startup, is attempting to take on Starbucks, which has been in that country since 1999. Luckin already has 3,000 locations (Starbucks has 4,000) and is growing fast. Attempting to use the size and premium positioning of Starbucks against it, Luckin is pricing low and building simple stores — most are small booths — optimized for cashless pickup or delivery. Starbucks is responding with its own delivery service and express store format, betting that it can successfully occupy two different market positions.

The complementary concept that a rival’s perceived weakness may pose a serious threat to your organization was popularized by Harvard Business School’s Clay Christensen in his famous disruptive innovation theory. Say your business is focused on its important customers. A competitor — perhaps a new entrant — invents a technology that’s weaker on several dimensions but stronger on a couple that matter to a small subset of customers. Before you know it, you start losing mainstream customers who now value the new dimensions.

This dynamic has been playing out in recent years between traditional colleges and universities and online education. Online courses have clear weaknesses: They offer students limited interaction and feedback and, often, no credential. But online education is also open access and often free. It’s appealing to people who have trouble getting admitted to schools, affording tuition, or making it to a classroom on a campus at set times of the week. To date, the incumbents have been slow to respond, though they’ve started to introduce some innovations, such as online master’s programs. More radically, Purdue University has created an income-sharing agreement, in which student loan repayments are pegged to a graduate’s income, to make on-campus courses affordable for more people. But most colleges and universities are probably overly focused on the weaknesses of online education today and not paying enough attention to the serious threat it could pose in the future.

The lesson for incumbents in all industries is that initially weak- or unimportant-looking competitors may lull them into a false sense of security.

Testing Your Thinking with the New SWOT

It isn’t difficult to incorporate the new framework into your strategic planning. Here’s an exercise that any organization, large or small, can do to check its assumptions:

Form two teams. Have Team A list all the strengths it sees in your organization, and Team B list all the weaknesses. Then have the teams swap lists. Ask Team B to argue that the strengths listed constitute threats to the organization’s future, and Team A that the weaknesses listed constitute opportunities. Next, do a similar external analysis: Ask Team A to list all the strengths it sees in your competition, and Team B all the weaknesses. Again, have the teams swap lists. Ask Team B to argue that the strengths listed are opportunities for your organization, and Team A argue that the weaknesses constitute threats.

This exercise will open your eyes to many possibilities that otherwise might never occur to you. However, it’s critical to remember that sometimes right-side-up thinking about strategy will be exactly what’s needed. An organization’s strengths may indeed be strengths, to be guarded and bolstered, and weaknesses may indeed be weaknesses.

Good strategists allow for the possibility that things may be what they seem or may be the opposite, depending on the situation. In his book On Grand Strategy, Yale historian John Lewis Gaddis analyzes military and political strategists over the centuries. The better ones, he has found, are those who exhibit (in F. Scott Fitzgerald’s famous words) “the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”

So you have to think flexibly. That does not mean thinking wildly, however. It’s crucial to approach strategy in a structured way. By using the new SWOT diagram, you can systematically ask important questions about whether upside-down rather than right-side-up dynamics may be at work in your business.

 

*We are here to help you navigate so schedule a call to discuss your specific business goals