How can your smallbusiness thrive coming out of the coronavirus mess? There's a key mindset you must have.
Join Tim Fitzpatrick for this solo episode of The Rialto Marketing Podcast!
Watch This Episode
Listen To The Podcast
Subscribe To The Podcast
Read The Transcript Here
Critical Business Decisions to Focus on Now So You Not Only Survive But Thrive
We are in the thick of this Coronavirus mess and for your business to thrive coming out of this there's a key mindset that you've got to have. That's what I'm going to talk about today.
I am Tim Fitzpatrick with Rialto Marketing. I really appreciate you taking the time to watch. This information came from an article called "Roaring out of Recession" by Ranjay Gulati who is with Harvard. I hope I did not butcher his name. But this article was written in March of 2010 and I still think it is super relevant for what's happening today.
And what Ranjay did was he looked at multiple companies over multiple downturns in our history and he identified that there were four different types of businesses in a recession.
The first one is a prevention-focused business. They are very defensive, right? They are taking action to avoid losses and minimize risk. What they're really doing is they're playing not to lose, which in my mind that's never a winning strategy.
So then you've got promotion-focused businesses and with promotion-focused businesses, they're on the opposite end of the spectrum. What they're doing is they are investing heavily. They're taking very offensive moves to provide upside growth coming out of a downturn.
Then the third type of company is what we call or what is termed a "pragmatic company" and pragmatic companies take a combination of defensive and offensive moves.
And the last one is what he coined a "progressive company", which took -- They're very similar to pragmatic, but they took the optimal combination of defensive and offensive moves that laid the foundation for them to have a much higher likelihood of growing and thriving coming out of a downturn.
So what lessons did I pull from the article? The first one - preventive companies - OK, prevention-focused companies - are too defensive. OK? They're trying to get more of the same from less, right? They're trying to squeeze water out of a rock and it's just not a good place to be.
They can be very pessimistic environments because if you're going into your company each day wondering whether you're going to be the next person to be cut because of a downturn, that's an unnerving feeling. People aren't going to be engaged, they're not going to enjoy the environment and it's just not a healthy environment to be in.
Now, the promotion-focused companies are too aggressive. OK? They are so optimistic that they have a tendency to deny the gravity and the realities of the crisis, right? They're working through rose-colored glasses and they're not objective about the realities of the situation which is not good either.
OK. Now, pragmatic companies recognize that they've got cut. To help make it through it, while also realizing that they've got to invest to spur growth moving forward. OK.
Now, there are three different ways to cut and three different ways to invest that Ranjay talks about in the article. With cutting, you can reduce employees. Right? Either the number of employees. You can reduce salaries, right? You can improve operational efficiencies and when you do that you reduce costs which saves money. OK... Or you can do a combination of both.
On the investing side, you can develop new markets, you can invest in new assets or you can do a combination of both.
Now, what Ranjay found is that progressive companies - they found the optimal combination of cutting and investment, and here is what they did: OK. They invested heavily in improving operational efficiencies. That's not to say that they didn't cut employees. They did, but they cut far less than their competitors and that was not their main focus. Their main focus was on improving operational efficiencies to save money. OK?
And then, on the offensive side, they invested much more heavily. OK? They developed new business opportunities by investing in research and development, marketing, and assets. OK?
And that combination of improving operational efficiencies and investing heavily in research and development, marketing, and assets laid the foundation so that as things improved they were much better positioned to grow and thrive and outperform their competitors. OK?
So keep that in mind. I know the situation we are dealing with right now is unprecedented. It is impossible for some businesses. Some businesses can't even operate in the current environment or they'd be breaking the law, right? So it is difficult.
I don't want to downplay the situation but keeping things in perspective and knowing what mindset is going to empower you to help your business get through this and thrive coming out of it is really important and that's why I wanted to talk about this article.
So I really hope that you have found this helpful. If you've got questions, concerns, or comments, please reach out to us. We're happy to do what we can to help - and just remember - marketing your business should not be a challenge. All you need is a plan.
Thanks so much for taking the time. I am Tim with Rialto Marketing and hopefully, we'll talk to you soon. Take care.