I’m writing this about nine weeks into lockdown, during the biggest pandemic of the century.
2020 wasn’t supposed to be like this. The year started with optimistic projections. The global economy was healthy and robust, with the OECD projecting lofty growth among both G20 and developing countries. It was to be an Olympic year. Unemployment was down. Living standards were up. Digital advertising revenue was forecast to grow by nearly 11%, to a whopping $326 billion.
And then everything changed.
I’m a strategist. I long term plan for a living. But no planner on earth could have predicted the scale of this crisis.
Businesses around the globe were forced to close their doors, decentralize their staff, and adapt to a wholly new reality in minutes or hours rather than months. Almost overnight, the ripple effects could be felt through every sector of the economy, as shuttered businesses laid off staff, stopped paying their bills to their vendors and suppliers, who, in turn, stopped paying theirs. The stock markets tumbled. Consumers, in the face of closures, job losses and lockdowns, cut their spending to the absolute essentials. Banks cut interest rates and then cut them again, but it did little to stave off the inevitable.
The key to managing change in a crisis is to remember that there will be a during and an after. We’ll be in crisis management mode for a while, and then eventually, a new normal will emerge. Many businesses will struggle to adapt and change to meet this new normal, but those who do can emerge strong and ready to take on those next challenges.
The businesses best positioned for the new realities we’ll be facing are those who take this time to put a plan together. I’d like to propose a four-phase framework for this plan.
Stage 1: Helping
In the initial days and weeks of this crisis, we’ve seen that companies, organizations and individuals have set aside their concerns about profit and instead asked a simple question: “How can I help?”
The worldwide outpouring of assistance and support in the past weeks has been nothing short of staggering. Shuttered restaurants donated their food to food banks or started making free meals for frontline healthcare workers. Factories converted their production facilities on a dime to make protective equipment, masks and gowns. Aerospace companies switched to manufacturing respirators, while breweries switched to making hand sanitizer.
Anyone with something to offer started offering it free of charge. Artists and entertainers began streaming free content from their homes. Fitness trainers, furloughed from closed gyms, offered free home workout sessions. Anyone with sewing skills began making homemade masks. Young people volunteered to buy and deliver groceries for seniors. Professionals ranging from lawyers to accountants to IT consultants began offering their services for free to those who needed them.
The helping phase: Key tips
- Offer help without strings. Anything that comes across as too self-serving will strike a false note in this climate. Be as generous as you can without attaching strings.
- Capture leads. Even if offering content or services for free, you can still ask people to register and opt in to be contacted. This will allow you to potentially monetize your followers later.
- Fail fast. This is the time for every business, large or small, to move into agile startup mode. You will need to pivot quickly, perhaps testing out entirely new business models that you have never tried before. You will make mistakes. That’s okay. Don’t let the perfect be the enemy of the good. Learn from them quickly, regroup, and move on.
- Communicate. Make sure you’re sharing the essential rapidly changing information with the people who need to know. This doesn’t mean sending out endless ‘what we’re doing to support you during COVID19’ emails. It does mean letting customers know what they need to know — updated opening hours, delivery policies, refund policies, or changes to your business.
- Ask for help. Almost no business out there will survive the helping phase without getting a little help themselves. Make use of government programs such as wage subsidies, rent forgiveness, or small business loans where possible. They’re there to help businesses stay alive through the worst of the crisis. Ask the community for help if you need it.
Stage 2: Monetization
Of course, the helping phase is not sustainable. There’s only so long that companies can give away their products or services for free. Their owners and employees need to eat. The lockdowns, closures and restrictions will likely be in place for months to come. Ultimately, to keep going, businesses need to create some sort of revenue stream during the crisis.
This is where you can begin to look for new and temporary revenue streams to get through the coming months of this crisis.
As consumers and businesses get past the initial shocks of the crisis and start to settle into the tedium of a lockdown routine, there will be things that they need and want, even during the crisis.
People who still have jobs and income will have dramatically reduced spending on many categories of things — entertainment, travel, restaurants, shopping — and might find themselves with the means to redirect that spending elsewhere. We’re seeing spending increase on home streaming services such as Netflix, for instance. Artists, musicians, fitness trainers, and others who were offering their streaming content for free, might be able to convert their follower base into paid subscribers. For instance, SOCAN recently launched a program to pay musicians for online concerts.
Businesses, looking to adjust their ways of operating, also will need services and products to operate. We’ve seen surges in sales of home office equipment, webcams, videoconferencing services, and remote IT support services, as businesses implement long-term work from home policies. There’s a huge demand for e-commerce and website services for small businesses who are trying to get online in a hurry. Online education and e-learning, tele-health services, and delivery services have all seen a similar surge in demand.
The consumer pulse is becoming gradually more accepting of monetization efforts from businesses. In the initial weeks, it would have backfired. But as time passes, people understand that everyone needs to make a living. And they will encourage your business model.
The monetization phase: Key tips
- Be creative about new revenue streams. Some restaurants have reinvented themselves as grocery stores. Wholesalers to the hotel or restaurant industry have been dividing up their supplies and selling smaller quantities directly to consumers. Professionals have moved to offering their services online or through videoconferencing. Don’t be so concerned with how you normally do things; think about how you could adapt your business to keep going, even if only temporarily, in these times.
- Ask your followers to subscribe. Once you’ve built up a following for your products or services, now is the time to transparently turn to them and ask them to pay. Not everyone will. Some may drop off. But if you’re delivering enough value, you will have earned the right to charge for it.
- Offer a pay-what-you-can or sliding scale model. Some consumers can afford to pay. Others have lost their jobs or incomes and may be less able to. Consider offering flexible rates for frontline healthcare workers or people who have been laid off or furloughed, or waive your fees on a case-by-case basis.
- Take advantage of low advertising rates. Search competition in AdWords is at an all-time low. Struggling media channels are offering giant discounts to advertisers. Take advantage of the low rates by placing relevant ads that speak to the current situation, and get your message out for pennies on the dollar.
- Don’t be predatory. Any hint of price-gouging or profiteering will cost your business dearly in reputation. Price fairly, be transparent, and continue to help where you can. Be a good corporate citizen and the community will support you.
- Take care of your people. Prioritize your employees as much as possible, keeping people on staff, paid, and looked after. If you’re an essential business and you employ frontline workers, prioritize their health and safety in terms of making personal protective equipment available and ensuring that safe distancing can be respected in your work environment.
Stage 3: Recovery
There will be a recovery. We can’t say exactly when or how this will happen. It may take a long time. But it will happen. And businesses need to have a plan in place for what happens once provinces, countries and territories start reopening for business.
What will this recovery plan look like for your business? It will vary by sector, but you can make some guesses based on what most countries and provinces are announcing in terms of a phased re-opening plan. For instance, the province of New Brunswick’s 4-phased plan includes gradually reopening outdoor and low-risk spaces, allowing priority services to reopen but keeping schools and nonessential businesses closed longer, and maintaining a ban on large gatherings for the foreseeable future. Depending on what type of business you have, you can guesstimate where on the timeline you might be permitted to reopen.
The other thing we can anticipate during the recovery phase is that people will be wary of going back out just because the government says they’re allowed to. As long as COVID19 continues to circulate, many people will maintain distancing and avoid people and crowds for fear of catching or spreading it. Recovery won’t be overnight. It will take time.
Businesses during the recovery phase still need to be creative about how they operate. Things won’t go back to normal for a long time. In the interim, the recovery phase will demand new ways of existing. Drive-in concerts, greenhouse “hut” restaurants, or plexiglas seat dividers on airplanes are just a few examples of how businesses may look different during the recovery phase.
The tricky part of recovery is that it likely won’t be smooth or linear. Re-openings may be short-lived and stymied by new outbreaks that lead to additional closures or lockdowns. Different regions may recover at different speeds. The uncertainty brought on by a halting, stop-and-go recovery plan can be tough for businesses to plan for. That’s why it’s so critical to have a plan that takes into account the need to be flexible.
The recovery phase: Key tips
- Prepare your re-opening plan. Will you need to recall or hire employees? Disinfect your premises or reconfigure them to allow for greater social distancing? Do you need to add safety measures to how you work, or change your business model on a more permanent basis? Your experience through the monetization phase will give you the best information on how to prepare for re-opening.
- Offer incentives to your customers. The risk is that those who left you while you were closed may not come back. They may have discovered they didn’t need you as much as they thought they did, or they could have found alternatives that work better for their lives. To coax them back, you may need to offer deals, incentives or sales.
- Manage risk. To coax people back, you may need to offer them risk management measures. For the travel, entertainment or event sector, offering worry-free cancellation or rebooking policies may be required to coax timid customers back into making a booking. For busy or crowded locations, you might need to offer added health or distancing protections for them to feel safe frequenting your business again.
- Plan for a bumpy ride. Recovery isn’t flipping a switch. Some lockdown measures may temporarily ease, only to resume in case of another spike in cases. Openings and closures could be largely out of the control of businesses and dictated by governments and public health measures. Have a plan in place in case of further closures, and keep your backup monetization streams going as much as possible.
Stage 4: New Normal
At some point, This Too Shall Pass.
We don’t know at this point whether the COVID virus will disappear on its own, will ultimately be halted by the development of a vaccine, or will become endemic but treatable. We don’t know how long it will take. And, despite much speculation, we don’t know what the world will look like after. But there will be an after. At some point, this will become a chapter of human history, and it will be time to mourn, to reflect, and to rebuild.
To plan for the New Normal, businesses should think about where they want to be in the aftermath of COVID. If your business has been shaken up by this crisis, that’s also an opportunity to reflect on where you’d like to go, now that you’re no longer constrained by fear of change.
The new normal: Key tips
- Plan for the world to be smaller for a while. For most people, the economic recovery from COVID will take longer than the physical one. Indications are that the unprecedented unemployment levels and slowdown in market demands will lead to worldwide recession, possibly even depression. Borders won’t be so quick to reopen, and “buy local” trends will probably supplant globalized supply chains for a while. Businesses should, as much as possible, refocus their marketing attention on local audiences, and seek to work within the communities and borders where they are based. They should also forecast more modest growth until the economy recovers.
- There will be less competition. Your market may be smaller, but so will your competition, as many businesses falter or fall to the economic realities. This isn’t an excuse to be complacent; it’s the survival of the fittest out there. But if your business makes it through, leaner, meaner and tougher, it will be well positioned to take on the challenges of tomorrow.
- Remote work is probably here to stay. If you’re a business that learned to work remotely during COVID, you shouldn’t be so quick to rush your employees back to the office. Flexible work-from-home arrangements will be normalized during these times, and employees in the future will expect their employers to offer flexibility on this front. Similarly, clients who have grown accustomed to video-conference meetings may not need as much in-person time. This can offer significant cost savings by cutting down on the need for office space, business travel, and in-person conferences and events. It can also offer a boon to businesses looking to recruit top talent without the need to consider location or borders.
- Remember that technology changes, but humans fundamentally don’t. We’re social animals. We need human contact, connection, and community. We seek out music, art, ritual and spirituality. We aim to discover, to acquire and to exist. No virus is strong enough to destroy those needs. Gatherings, events, travel, theatre, sports, concerts, weddings and festivals will all exist again someday. We are living through a collective trauma, but we will emerge from it. All these human needs will need to be met again, and businesses will crop up to meet those needs.
- Embrace the opportunities offered by change. Great crisis brings on great innovation, and COVID will certainly change the world in ways we have yet to anticipate. Your business has two choices: To be an engine for change, or to be left behind by change. Which one do you want?