A crisis is a threat – but also an opportunity

Adam Dębowski, a business trainer and coach, shows the way of surviving the current epidemic crisis.

Locking yourself in your seemingly safe “cave” for this purpose is not the best strategy at all. On the contrary, it is going nowhere.

The epidemic crisis that fell on us like the proverbial “lightning from the blue” is a great lesson in humility for everyone, but not only. The capitalist countries of Western democracies have developed relatively steadily so far based on respect for fundamental human rights and the rights of the economy. And suddenly, the quite unexpected tightening of the times of crisis disturbed the rhythm of work of many companies, which exposed the seemingly very stable economy of the West to serious consequences. One of the manifestations of the increasingly visible economic crisis are layoffs. They then register with employment offices and the benefits paid to them additionally burden the tight state budget. Companies that do not earn money during the crisis also do not pay taxes, so the state is forced to use its financial reserves, which are not, after all, the proverbial “bottomless well”.

Despite this, small and large companies are not in a lost position at all. It is also worth thinking about now

How to move forward despite the current difficulties

First, ask yourself what is the condition of your business venture at the moment. Are you totally at risk and are you shutting down your business properly? Or maybe you are balancing on a dangerous border, but you are still looking for ways to survive? Or maybe the situation is just uncertain, although you still manage? Or maybe you just noticed a decrease in turnover, but in general you are still operating fairly steadily? There is also a small group of those who are not affected by the current crisis at all. Either they stand firmly on a few “business legs” or their industry is immune to these kinds of threats.

Let us recall here the Chinese understanding of the word “crisis”. The pictogram relating to it consists of two characters, signifying “threat” and “chance”. Therefore, do you prefer to sink into the sadness associated with the feeling of danger, or rather to take advantage of the new opportunities that emerge in the future?

In Chinese CRISIS = THREAT + OPPORTUNITY

This “threat” symbolizes the difficulties we may face when a crisis surprises us unprepared for it. However, whoever prepared his company and his team for such a situation, built the appropriate “financial cushion” and provided other safeguards, including – perhaps even – financial independence, will now also go for the win. Because new opportunities had just opened up for him.

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In order to be prepared for any surprises and to be able to face unexpected changes in the market situation, the leader, managing the company’s assets, should focus primarily on the five most important areas:

1. Constantly improve the quality of your leadership – including your operating strategy.
2. Keep working on the competitive advantage of my company.
3. Hone your change and resistance management skills.
4. Continuously improve the quality of communication in the company and work on improving the effectiveness of the teams operating in it.
5. Work on yourself, improving your efficiency and eliminating your weaknesses.

If he neglects any of these areas, he can expect trouble not only in a crisis.

The Institute for Change Leaders has developed a proprietary tool for managing change in companies called “Change Value Process”. It is a methodology for carrying out such a transformation using all the client’s resources, which ultimately leads to a comprehensive internal transformation of a given person. Put simply: for a company to operate differently, its boss must become a different person. Hence the change value process. It is they who guide our life choices and in every aspect of human life, one can see the influence of the values ​​he professes. And in order to make an effective change both in business and in life, you need to reevaluate your priorities.

In our method, we distinguish six universal issues, which we discuss here in the language of business. However, we should remember that they also apply to the non-business life of each of us.

By improving the company’s management processes, we learn from the proverbial “own mistakes”. For this purpose, it is worth making a fairly regular – at least once a quarter – “examination of conscience”, then answering a few questions:

1. Which area of ​​my business is now easier to manage? Or people, or maybe sales or finance? This is a very important element in improving the competences of a change management leader.
2. Do I have a greater advantage in the market and a stronger brand thanks to this improvement in the quality of company management?
3. And did I make more profit by it?

We also focus on ourselves and ask ourselves three important questions:

4. Do I now have a calmer mind and stronger personality?
5. Do I make decisions faster and more confidently than before?
6. Do I have more time for the important things – both in business and in my private life?

Thanks to this, we will be able to properly respond to key issues:

1. How to improve the functioning of our company
2. How to make decisions in order to best meet the current and long-term needs of our company?
3. How do I get out of a crisis situation unscathed?

Only 9% of companies recover from recession / crisis, according to Harvard Business Review. Another 80% are not able to restore the level of sales from before the crisis even three years after its end. The others either go bankrupt or go out of business or are bought out by the competition. Whereas

Those who invest always win

In the crisis of the 1980s, companies operating in various industries that sustained their marketing spending had more sales during this “crisis slowdown” and three years after it ended compared to competitors, which at this cost she was saving.

In the 1990s, Pizza Hut and Taco Bell significantly increased their marketing spending, in contrast to McDonald’s which clearly reduced its advertising budget. As it turned out, Pizza Hut “went up” by more than 60%, Taco Bell 40% and McDonald “threw” 20% of its market share during this time.

Then came the great recession of 2009, during which Amazon did not panic and invested in new products and promotions. Thanks to this, the company “grew” by 28%.

Business Consulting Group, a large international consulting organization, surveyed large public companies with a turnover of more than $ 50 million in the last four recessions. They all lost during the crisis, with the exception of 14% of them who did not become hysterical and were still thinking about long-term marketing. Therefore, they focused on “how to grow” and not “how to cut”. into new technologies.

Therefore, the first practical conclusion that comes to mind is the regular – at least once a quarter – control of the above-mentioned five most important areas of your company’s operations and testing whether we are still consistently heading in the direction of its six universal goals. And the second practical conclusion – always invest in at least three aspects of your company’s operation: in marketing, in technology, in products. You always have to look for new products – especially in times of crisis.

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Probably everyone has heard about the fact that “whoever does not move forward, he retreats”. And yet, in practice, many managers sometimes rest on their proverbial laurels when they reach a certain stage of the company’s development and apparent stabilization. “Apparent”, because – as everyone theoretically knows – the only constant thing is the constant change of conditions and circumstances of running a business, and therefore you have to keep up to date.

So always be aware of what stage of development your business venture is at at any given moment. At the Institute for Change Leaders, we have developed a proprietary concept of six stages of company development, which are worth getting to know in order to make a change at home in the most effective way.

Stage 0

The beginning of the functioning of a newly established company is catching its “first breath” in sales. Once he catches him and achieves the first relatively stable financial results, he stops fighting for cash flow and each year notes – smaller or larger – relatively stable increase in sales. It usually takes the first 3-5 years, when the company becomes recognizable and its logo on the products begins to provide customers with a guarantee of a certain quality. However, this sale is still not predictable. This is where Stage I begins.

Stage I – brand building, sales optimization

Now comes a very important moment when you need to think about generating more profits without increasing costs too much. How to optimize and stabilize sales generated in the sweat of your brow.

A young entrepreneur – in the sense of an internship – is faced with a cost-increasing trap, which is easy to fall into when we are overwhelmed by the euphoria of the first bigger money coming to our company. Everything seems to indicate then that we are getting the proverbial “wind in our sails”. Of course, at the moment it is like that, but beware… It is a very cool moment, but also dangerous.

If you now focus on a higher level of customer service, on a higher quality of marketing, focus on brand building and on facilitating the sales process, then you will go further. However, if you stay in the rhythm of your current work and limit your activity only to the solutions used so far, your company will start to decline. When a large number of new customers appear, handling so many new orders will start to be a race against time and a constant nervous budget tightening.

You also need to be vigilant with regard to competition in the market. If it spreads its wings, you will have to fight for your place on the market by lowering prices. The crisis of 2013 on the Polish market was related to the fact that the price race had just begun, caused by the increase in competition. Polish entrepreneurs had a high level of emotional intelligence – they coped well with emotions in private and professional life, a high level of social intelligence – maintaining good contacts with people and managing their teams in companies, but their business and strategic intelligence was too low. Their customers were then taken over by better-branded companies that provided a higher level of customer service.

Remember that putting emphasis only on sales is a serious methodological error. After reaching the first stage of the company’s development, one should look for other paths to reach the client. Without it, he will not feel that the company cares about him.

One of the important points of the action program at the 1st Stage of the company’s development must also be the development of your team’s competences. Without it, he will most likely cling to the usual patterns and only do what has worked so far. Nobody is looking to the future, and everyone around you – including you – will have the impression that the company is not operating in a dynamic, modern way. In other words, it is old and not modern.

The development of the first stage of the company’s operation may take up to 20 years.

Stage II – the time to organize our company so that it could “catch the wind in its sails”

Once we have built a good brand, we have a well-functioning marketing, and thus maintain stable sales, we can take a break from matters related to the company’s survival. Now comes the time for broadly understood “arranging” everything. Therefore, we deal with communication between people, organize all logistic processes and continue to shape not only the managerial competences of our team. It is also worth taking care of “arranging” communication between employees of our company. Sometimes it happens that one department does not like the other and then the friction between them weakens the company’s readiness to face market challenges.

If we do not put our business in order in Stage II, it may simply not survive further development. The sale is “spinning”, marketing is working, customers come, but the company, unprepared for so many tasks, simply will not “grasp” it all. There will be chaos in which no one will know what to combine with what and what to implement the work schedule.

So far, throughout Phase I and in the beginning II, the owner of the company managed everything himself. Suddenly, he is no longer able to oversee everything in his growing enterprise. He is already sitting in the office for several hours each day and he already feels “driven to death”, and so much still needs to be done. There are so many things to look after. And there is no one to delegate them to, because the company’s employees, who are used to the “boss’s hand”, are not ready to make decisions on their own. Then there is a “business out of breath” and the resulting inability to “get the job done” can cause a state of depression. Then you can say that success is overwhelming.

All operational, formal and legal negligence come out, and in this chaos we forget about important matters. And not only customers are starting to get fed up with it. Our best employees feel that the whole situation is below their level of competence and it is simply a pity for them to waste longer time here.

Then comes the moment to “strategically stop” to redefine your organizational priorities. If we do not do it and deluded by the desire for more and more profit, we will continue to blindly “rush” after the proverbial “bunny”, our project will fall apart like a too tight shirt.

Stage III – building operational and competitive advantage

Now the company is strong and stable. All areas of her work have been put in order, and sales are growing thanks to the high level of marketing and customer service. Of course, one still has to face the “challenges of everyday life”, but many organizational and logistical issues are properly “structured”. So it is beautiful and this is another trap that awaits an entrepreneur developing his company.

You can never rest on your laurels

If that happens, it will be the beginning of the end for your venture. You will then go up a downhill slope leading to a catastrophe. This does not mean, of course, that you should not be happy about the success achieved and not take a few weeks’ vacation for it. Let’s have fun, let’s enjoy let’s come to work even for three hours a day. When we have set everything up properly and well trained, competent employees already have the proverbial “eye on everything”, the only thing left for us to do is to ensure that the whole thing is coordinated. An old proverb says: “The Lord’s eye makes a horse fat” and now your presence in the company reminds people of their place and does not allow them to become too lazy.

Unattended things start to break down

When you build a new house, lock it up and leave it for two months, when you come back you will find a stench of stale air inside. And the same is happening with the seemingly perfectly functioning company. It also needs to be regularly “aired” so that it does not become a behemoth that starts to deteriorate.

Be careful not to lose a certain “rebelliousness” that everyone has in the first years of business life and which gives us the strength to fight for the market. For when you become complacent, and your vigilance lulls you, it will be just another trap on the way to success. If your competition achieves a similar level of development at this time and does not lose its “nerve” to fight for the market, then it will start to gain new market segments and increase its turnover, and you will start to lose.

In Stage III, comes the time to hire a COO to take over most of your responsibilities. A lot depends now not only on his business competences, but also on personality traits as well as emotional and social intelligence. In CVP, he talks about so-called CEMKs. It is an acronym formed from the words: Traits, Emotions, Mentality, and Competencies. The traits we especially care about are: courage and creativity, as well as the ability to deal with stress. What is also needed here is the mentality of a winner, an interesting person who is developing and who wants to win. In turn, the competences desired in business are certainly knowledge of foreign languages ​​and management skills – including decision-making.

Therefore, your COO must have the CEMKs described above. But attention, if the candidate will meet the needs of this position in as much as 80 – 90%, the missing 10 – 20% may cause that it is your competition, not you, that will start to occupy new market niches.

It is a task of utmost importance to continually build an operational and competitive advantage by optimizing CEMeK in its workforce. Therefore, you help them develop appropriate personality traits, emotional intelligence, change their mentality and improve their competences.

Parallel to this staff development program, you perform many strategic activities, looking for new market niches, new products that you can sell to sell, or even companies that can be purchased to expand your offer.

In Stage III, as in Stage 0, you have to fight for your position on the market. You should therefore think hard

How can you grow taller now?

If you don’t, I guarantee that your competition, which you haven’t even noticed yet, will do it. And in today’s “3-4-0 World” competition may also emerge from a completely different industry.

As an example, let’s give the music company VIRGIN, which at one point became the operator of the aviation market. Her latest idea is to create a network of air taxis that will fly to their destination using Earth orbit. After all, there is no air resistance there, so the journey will be faster and cheaper. Or the GOOGLE search engine, which started creating software for remote-controlled cars.

Or maybe I will get an offer from your industry and decide that it is worth entering this market niche? Then, I warn you, you will have a problem – unless we start working together. Even though I don’t know your industry right now, I can really put you in the market because I have the right level of social, emotional and business intelligence.

So you need to be vigilant at all times

In CVP we talk about the “giant effect”. It appears when the accelerated, huge “mass” of your business is no longer able to flexibly respond to changing market conditions and is not able to make quick turns in the direction required by the current needs.

This is another trap in your way. When your company loses its ability to flexibly respond to changing market conditions, your company’s best talents will feel unsatisfied. This includes thanks to them you have built your success and they see now that nothing new is happening. If they also say that “the CO doesn’t understand us” and “there’s nothing else here for us”, then you won’t look back when you go back to level 0 in no time, having lost your best people.

Another trap lurking at the 3rd Stage of the company’s development is the fierce “defense” of this success by the entrepreneur. He then sticks to the previously developed procedures, forgetting that the company still needs to be developed. Because

Who doesn’t go forward goes backwards

And keeping your business high means paying high costs for people and technology. If the entrepreneur loses sight of this process, it may turn out that these costs start to exceed the company’s revenues. We come back to the issue of competitive advantage again. It allows us to maintain high rates of remuneration for our work, because customers will choose our company with an established reputation anyway. After all, they prefer to pay for something they are sure of rather than risk apparent savings when engaging someone cheaper than us, but completely unknown to them.

The so-called “brand of a company is different: its credibility. Brand reputation and respect for it are built over the years. Therefore, no matter if we are at the stage zero or stage IV of our company’s operation, this brand must be constantly strengthened, constantly creating new products. And you can also lose it literally in a fraction of a second by some stupid mistake, such as an uncontrolled leak of customer data from a company. Especially nowadays, we will feel the effects of such a mistake just as soon as our disappointed customers announce it to the world via social media.

And now beware, another trap awaits you. Many successful entrepreneurs at this level already have cash flow with the company and earn a lot. But they don’t feel any satisfaction or inner peace at all, but a constant inner tension. They are tormented by fears that they will “screw everything up”, that customers will leave, that their competition will overtake them …

This is a clear signal from the subconscious mind entitled “Watch out, you rest on your laurels on Stage III”. This is to mobilize us to work. We then become a market leader, because our company has gained an operational and competitive advantage as well as “freshness” and “agility” in navigating the economic realities of our country. Then we are ready to enter Stage IV.

Stage IV – business retirement

The time has come for a new era in the history of our company – innovations that will take us to the so-called “blue ocean”. There, we will discover new and interesting markets that our competitors have not yet reached.

And if you no longer need to grow in business and you have dividends from your previous activities for the rest of your life, you can go into some kind of “business retirement”. Now, for example, you could help others as a mentor or advisor. Or become called An “angel”, a person who helps others by investing their own money. Or maybe you would find yourself more like a lobbyist who helps start ups. Then we invite you to CVP, where you will be able to prepare well for it.

Here’s a trap again. For if we do not move forward in the way described above, we will stick to the past and this apparent calm will again turn out to be “the calm before the storm”. Because if you do not follow the current market trends, your company will start to return to the III, II, I and finally Zero Stage. And again we will return to the syndrome of the “colossus on clay legs”, which is unable to flexibly react and change direction in response to market needs.

Skipping these reefs, we come to the last stage of the company’s development.

Stage V – get as high as you can

We have been successful, we have good marketing, the company is in order and our competitive advantage has been gained also thanks to innovations in our company. And now it is no longer about winning new markets or plunging into the “blue ocean”. Now is the time to expand our business, either on a national scale – if it has not been the case so far, or on a continental or global scale.

If we don’t, we’ll just stay in the local success stage, which of course is okay. Having a sense of satisfaction with a job well done, we will be “lined up” for the rest of our lives. And by the way, we will perhaps “position” our family for several generations ahead. Perhaps, however, we will be faced with a certain dissatisfaction then that we did not use our possibilities to the end.

Some Polish startups have grown to an international rank also because it was the goal of their creators from the very beginning. Other business starters don’t think that, and that’s okay too.

Everyone will ascend as high as they let themselves be

S ukces also always means the necessity to incur certain costs and not everyone is ready for it, to which of course they are fully entitled.

A certain indicator of our success will also be an attempt by a giant from abroad to buy our company. This may be an opportunity, but also a threat, when a powerful foreign player enters our market and sets everything up in his own way.

The one who knows more about himself, other people and business wins

So a lot depends on you, your way of thinking, your personality traits, your competence and your ability to deal with emotions.

Life is the process of becoming yourself according to the measure you discover in yourself and set for yourself. Because the effects come from you.

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A good leader – assessed in terms of CVP – is guided by certain universal values: honesty and respect for others, but is also focused on building a competitive advantage, strong brand, introducing innovations and generating high profits. These are four extremely important business goals that should always be in your mind when you are a leader – present or future. This will then set your mindset in the right direction.

It is important that you understand the stages of a business’s development and know what actions need to be taken at each specific stage.

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Change Value Process also encourages you to digitize your company, i.e. use modern, digital tools that help us at work. From creating a simple website to advanced technologies that help in specialized data processing.