March 23rd – Aussie athletes told to prepare for 2021 Olympic Games, Clubs, Pubs, Gyms, Cinemas, Churches and all non-essential businesses told to close, no indoor weddings, thousands queue for Centrelink and MyGov crashes, schools close across the country, Qantas stands down 20,000 employees and by lunchtime on the Monday the ASX falls 6.8%. (ASX falls from 7,139 on 21st Feb to 4,564 on 23rd Mar). Every business owner must be thinking about Business Survival as the impacts of COVID–19 strikes deep into the Australian Economy.
Without a doubt, the first response for every business owner is “How am I going to survive the toughest economic times since the Great Depression?” Business owners have developed COVID response plans and with the support of government stimulus measures, many are starting to find their rhythm and adapt to COVID-19 impacted economy. The question facing business owners now is “do I invest in growth or stick to a business survival plan?”.
I believe in getting what you want from your business, and so the survival v growth decision is really up to the business owner(s), whereby both options can be successful. Your mindset, however, will determine what your business can deliver, and your chance for success post COVID-19.
If you choose survival then that’s probably the best you are going to get.
For me, I am a growth guy, and by growth, it is not just more revenue. Growth can be changing product and service offerings, new customer types, improved gross margins, work-life balance and most importantly having a passion for your business. I believe passion ignites energy. There have been plenty of articles written about why business growth should be at the core of the mindset of every business owner. Growth can be the very ingredient to firm up survivability. I am not asserting business owners and CEO’S need to be obsessed with growth. The Forbes Business Development Council label this obsession as ‘growth hacking’, whereby forcing growth is likely to cause more harm than good. Businesses should be looking at achievable, long term sustainable growth.
A growth mindset drives strategic thinking. In the first instance, businesses need to be positioned for growth and the focus should be on transitioning. Where are the opportunities to transition your business to be more competitive with your current offer or having the capacity to transition into new products or markets?
If your growth mindset is on transitioning then you immediately start to think about innovation. There are 4 growth options for growth:
Transition – Innovation Strategy
Option 1: Increase market share i.e. more growth with your current products to your current markets
Focus on efficiency and work out ways to improve your position in the current market.
Option 2: Develop new product offers for your current market, i.e. your current customers
Talk to your customers to identify needs that can be met through new product offers. Utilize your customer knowledge to develop new product and promotion strategies.
Don’t just copy the competitors
Option 3: Find new markets for your current products
Utilise existing skills and competencies to be highly differentiated in a new market segment
Option 4 – Diversify, come up with new products and find new markets
CAUTION: You must have a superior strategy to be successful with this option. Diversification requires new knowledge of both the marketplace and the needs of the customer.
In conclusion, I will share the sentiments of Canadian Astronaut, Chris Hadfield. Chris completed 2 space shuttle missions and served as a commander on the International Space Station. He now works tirelessly to inspire young people to do what they love and to be fascinated by the world around them. “Almost everything worthwhile carries with it some sort of risk, whether it’s starting a new business, whether it’s leaving home, whether it’s getting married, or whether it’s flying in space.”— Chris Hadfield, Astronaut
As an astronaut Chris understands risk and with growth, our job is to manage risk. The choice is to just focus on surviving – that’s the best you’ll probably get, or take the risk with growth because it might just deliver something worthwhile? I.e. get what you really want from your business.
Written by Martin Pike Director, Principal Consultant KSM Advisory