business leaders’ crisis playbook · web viewintroduction “you never want a serious crisis to...

A business leader’s crisis playbook

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BUSINESS DEVELOPMENT

Business leaders’ crisis playbook

Introduction

“You never want a serious crisis to go to waste” - Rahm Emanuel, White House Chief of Staff during the Great Recession

Coronavrius, or Covid-19, has impacted almost every business in the world. Although it is impossible to predict with precision what the long-term consequences are for industry there are some practical steps that every leader can take to strengthen their businesses in times of disruption and economic uncertainty.

A different approachThere is a lot of information about how to deal with the immediate crisis, keeping colleagues safe and protecting organisations from cybercrime as people work remotely.

Although managing the here-and-now is critical, understanding what the fallout of this crisis means for your business is also vital. Rather than provide generic advice that may work for a cross-section of businesses, this playbook enables every leader to build a plan specific to their situation.

Using this playbook will help you to:

Build a data-backed picture of your organisation’s short, medium, and longer-term prospects.

Consider the options available to you and help you choose the right path for your future.

Create a practical action plan to move forward.

Although you may be familiar with some of the business planning tools employed by this playbook, it is important to note:

They have been adapted for a crisis, we’ve used them in crisis situations, and we know they work.

They have been carefully streamlined to provide you with the answers you need quickly and accurately.

Experience of working with organisations in crisis has prompted us to include material about how to engage with and influence others in turbulent times. People behave differently under pressure.

Copyright Larato 2020


Four steps to your futureThe playbook follows four main steps that are underpinned by adapting how your business engages with and influences others.

Step 1: Now1 a) OutcomesWe do not begin this step by analysing your revenues and pipeline. We start with outcomes. This is a key adaptation for business planning in a crisis. Considering outcomes is a creative process that, during difficult times, is more effective when done ahead of numerical analysis.

1 b) Revenues and pipelineA data-backed analysis of your current revenues and pipeline that creates a picture of your risk exposure and a framework to explore your options.

Step 2: OptionsA framework of questions to evaluate your options moving forward. We will arrive at a visualisation of potential futures to help you choose well.

Step 3: ChoiceUtilising steps 1 and 2 to choose the way ahead.

Step 4: Action planBringing things together to create your practical action plan.

Engaging and influencing others during a crisis Basics Adapting your communication style


1. Now 2. Options 3. Choice 4. Action plan

Engaging and influencing others


Step 1: Now

1 a) OutcomesIn this section, we look at outcomes you would like to see for you, your customers and your partners.

Outcomes for your businessUse the diagram to focus on the six most important outcomes you want for your business. Although we have made some suggestions, it is important to make this as relevant to your own business situation as possible. Prioritise the top two or three that are necessary for your business to survive/ thrive.


Survived and a stronger business

Deeper partnerships with customers

Improved businessresilience

Less dependent on specific customers or

markets

Improved productivity/ efficiency

Offer relevant products and services


Outcomes for your customers and partnersUsing the outcomes for your business, specify outcomes for your customers and partners. Again, we have provided some examples simply to spark your thinking.

My required outcome Outcome for customers Outcome for partnersSurvived and a stronger business.

Survived as a viable business.

Survived as a viable business.

Deeper partnership with customers.

Greater dependence on my business.

Greater dependence on my business.

Improved business resilience.

Improved product offering and delivery. My business is seen as a lower risk supplier.

Partners prefer to work with my business because it is lower risk to them.

Less dependent on specific customers or markets.

More customers and markets gain value from my products and services.

Partners have a broader market reach.

Offer relevant products and services.

Customers secure greater business benefits from my company than my competitors.

Partners understand my customers and deliver relevant products or services.

Improved productivity/ efficiency.

My business delivers better Return on Investment. Customers have confidence that my business is a lower risk supplier.

Collaboration with partners that enables both businesses to be more productive/ effective.



Impact of the crisis on revenues and pipelineNow we will build a Red: Amber: Green view of your customers, revenues and pipeline to help visualise and quantify your organisation’s risks and opportunities.

My customer base: Red: Amber: GreenReview your customer base in light of the crisis. Include those customers that contribute most income to your business. Categorise these customers as follows and capture the results in the table below:

Green: the crisis has a positive or no impact on the customer. Amber: the crisis impacts the customer but:

o The customer has adapted and will continue to buy from my business.o The customer will recover in an acceptable timeframe.

Red: the crisis has severely impacted the customers business in ways that present significant risk to my business over a longer-term period (e.g. travel).

My revenues and profits: Red: Amber: GreenReview your current revenues and profits in light of the crisis. Categorise revenues as follows and capture the results in the table below:

Green: revenues will be sustained through the crisis and into the future. Amber: revenues are impacted but expected to recover within a timeframe your

business can tolerate. Red: revenues are impacted beyond a timeframe your business can tolerate.

Perform the same analysis for your profits.

My sales pipeline: Red: Amber: GreenReview your pipeline. Categorise opportunities as follows:

Green: opportunity expected to go ahead within a timeframe that is acceptable to your business’ cash flow.

Amber: opportunity expected to be delayed with negative cash flow implications. Red: opportunity no longer expected to happen.



Current status

Compare your current status with either your expected position from your business plan pre-crisis or your performance last year.

This table is interactive, so you can put your own numbers in.

Green Amber Red Total

Customer base 20 40 40 100 80Revenues (k£) 300 300 400 1000 1000Profits (k£) 90 90 110 290 290Sales pipeline (k£) 400 100 250 750

Plan Total or Last FY

Consider the Red: Amber: Green view of your sales pipeline. How much do you expect to close and when? It is prudent to remove the Amber and Red opportunities and look at the Green ones again. Since the average win rate for qualified B2B sales leads is circa one in four, it is sensible to lower the Green component of your pipeline.



Visualisation of your current status

The next twelve monthsWith the data you have gathered, sketch out a likely revenue profile without material changes to the way you go to market.

Now to Sep 2020 Sep 2020 to March 2021

Post March 2021

Likely revenue range

1. Can you achieve your top priority outcomes from this financial position?2. What resources will you need to achieve the other outcomes? Are they a luxury?



3. Can your business survive the crisis without fundamental change? 4. If business is booming, how will you manage stakeholder expectations?

Step 2: optionsCovid-19 is likely to affect our economy and the way we do business in the long term. No-one knows how this is going to play out. In a crisis, it’s important for leaders to be able to step back and consider options objectively so they can uncover or develop the opportunities within.

“ In the midst of every crisis, lies great opportunity”

- Albert Einstein

The short term: thrive or survive The visualisation of your current status can help inform your thinking about your short-term options. Below, we offer some questions to consider dependent on whether your organisation’s current status is predominantly Green, Amber, or Red.

Answer the two or three most relevant questions to your business and your situation, then move on. Resist the temptation to over-analyse. Borrowing from General Patton, “a good plan implemented well today is better than a perfect plan implemented tomorrow”. In turbulent times, our natural instincts can lead us to over-think situations. Resist!

Dominant current status

Questions to consider

Green

Options centre around consolidating and strengthening your position.

Is my current position Green despite the crisis? If so, is my best option to maintain the status quo? What implications does this have in a more uncertain economy?

Is my current position Green due to demand the crisis has created? Will demand be sustained? If so, does my business plan need to change? How?

Is my current position Green because of the Business Continuity plan my firm implemented? If so, does this plan need to change to accommodate a more uncertain economic environment or a return of the virus in winter?

How could competitors threaten my company’s Green status?

How could technology and improved processes strengthen my position?

How could my workforce strengthen my position? Do I need new skills?

What is happening to my competitors? Does this present opportunity? Do I the competitive intelligence I need?



Could I acquire customers from competitors exiting the market?

What else can my business learn from this crisis?Dominant current status

Questions to consider

Amber

Probably the most tricky situation to manage, requiring a careful balancing of risk

Is my current position Amber due to external market forces or internal inefficiencies? What implications does the answer to this question have?

How can I protect my company’s revenues and sales pipeline? Considering the visualisation of my company’s current status, what can I move from Amber to Green?

How could technology and improved processes strengthen my position?

Should I adapt my market position? What information do I need to explore this option?

What is happening to my competitors? Does this present opportunity? Do I have the competitive intelligence I need?

How can I protect my business in a more uncertain economic environment or against a return of the virus in winter?

How can I make my business more resilient?

How does my workforce need to adapt?

How could changes in customer expectations or requirements impact growth?

Should I consider market or product diversification?

What else can my business learn from this crisis?Red

Good data will help good decision making

Is my current position Red because my customers and/ or partners have suffered? If so, will they under-perform or fail in the mid-to-long term? Are they vulnerable to a return of the virus in the winter? What are the implications of this for my business? Do I need to diversify into new markets? What options do I have to survive the immediate impact?

Is my current position Red due to flaws in my firm’s Business Continuity plan? If so, how do I retrieve my market position and how does Business Continuity need to adapt to protect my business in the future?

Could technology enable a radical reworking of how my company does business? Could this secure an attractive cost/ revenue base to underpin future success?

How could I adapt/ redeploy my firm’s assets to survive in the short term?



What are the longer-term implications of this?

Last resort: is it time to stop? Possibly the toughest decision, but better made sooner if the longer-term trading environment prohibits success.

Worked example for short term: top priority outcomesIn the table below, we have provided a worked example that illustrates which questions are the right ones to choose from those provided or whether you need to ask different questions.

In this scenario:

The dominant status is Amber. The base strategy is to balance risk and investment to achieve the top priority

outcomes. The two top outcomes required for survival are “Improved business resilience”

and “Less dependent on specific customers or markets”. The thrive/ survive question to consider should have a direct impact on the

priority outcomes. This may seem obvious. In a crisis, it’s easy to overlook things.

My required outcome Thrive/ survive question Impact on outcomeImproved business resilience How could technology and

improved processes strengthen my position?

Using technology to automate processes could make my business more resilient.

Less dependent on specific customers or markets

Should I consider market diversification?

Trading across more markets or territories could strengthen by business. What is the risk/ reward of diversification?

Less dependent on specific customers or markets

Could I acquire customers from competitors exiting the market?

More customers could strengthen my business. How should I decide if I should buy and what to buy?



The medium term The first thing to emphasise about the medium term is this: start planning now!

For the medium term, prioritise how you could secure the rest of your required outcomes. In the previous section, we saw how short-term necessities can contribute to attaining outcomes. Here, we turn to a more strategic tool; the Ansoff matrix.

The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957. It is a quick and simple tool that helps you to think about the risks of business change. Considering four strategies you can use to grow, the Ansoff Matrix helps you to analyse the risks associated with each one.

Market penetration: can you sell more of your existing products and services to existing customers? This is the lowest risk strategy.

Product development: can you build new products or services that your existing customers will buy? This is the second lowest risk strategy.

Market development: can you sell more of your existing products and services to new markets, including international? This is the third lowest risk strategy.

Diversification: can you see an opportunity to create a new product or service and sell it into new markets? This is the highest risk strategy. It is where every start-up business begins. In the UK, 60% of start-ups fail within 3 years.



Consider these four strategies and make comments on how they may, or may not, work for your business.

Growth strategy CommentsMarket penetration

Product Development

Market development

Diversification



Step 3: choiceAppropriately, this is likely to be the hardest step. With the additional intelligence you have gained from the previous steps, you will be well equipped with data and informed thinking to engage your stakeholders in debates that will produce value for your business.

A good tactic is to short-list two short-term and two medium-term choices. Consider the Red: Amber: Green risks versus rewards of each to settle on the best short-term and medium-term approach.

Step 4: Action planIn this section, we’ve set out the core elements of a practical action plan that will move you forward. Apply each element to your short-term and medium-term choices.

MarketsWhat markets are attractive to you and why? If you do not have credibility in an attractive market, what actions are needed to establish it?

Market Why is it attractive? Are you credible in this market

now? (yes/no)



Products and Services

ProductisationThis checklist will help you to scope the activities that may be required for you to take a new product or service to market.

Product Name

Product description?

Standard price?

Terms & conditions?

Product roadmap?

Prospect list?

Product positioningFor each of the products you have listed above, please select the most appropriate descriptor. The further to the right your new product or service is, the harder it will be to sell.

Product Name

Unique in the market

Few competitive offerings exist

Many competitive offerings exist

Product is a commodity

Product is dated and becoming irrelevant



Sales of products and servicesWhat does an ideal sale for your business look like? Please complete the details below

Products/ services: what products/ services make up an ideal sale?

Value (£ per unit or per contract)

Ideal contract/ subscription term

Ideal customer

Ideal reseller partner (if applicable)

Sales pipelineRegardless of your business’ size or activity, running a good sales pipeline will help your business to be more resilient to economic change.

Do you run a formal sales pipeline? Yes/ No

Do you operate a formal sales process? Yes/ No

Do you use sales and marketing systems (e.g. CRM)? Yes/ No

How many opportunities do you have in your sales pipeline now? _______________

How many opportunities have you bid for over the last 12 months? _______________

How many sales opportunities have you won in the last 12 months? ________________

Why do you think you win sales?

Why do you think you lose sales?



Skills auditAs far as you can, list the skills you think you need to achieve your personal outcomes, revenues and profits.

Skills required to deliver outcome Exist in the business?(yes/no)

Sales channelsWhat sales channels do you need to reach these markets?

Direct:___________________________________________________________________________

Indirect:__________________________________________________________________________

PurposeBy understanding the purpose of your business and the value you provide, you will be able to position it in ways that will help people to buy from you.

Besides making money, what is the purpose of your business? What value do you believe you bring to your customers? What problems do you solve for your customers? Which of your competitors do you admire most? Why?

Try to summarise why customers should buy from you instead of someone else in less than 200 words.



Engaging and influencing othersWhen times are tough or uncertain, our base human instinct of “fight or flight” come into play. This affects how we listen. It changes what we hear. And it influences how we respond to one another.

In this playbook, we’ve helped you to consider and uncover effective ways to move your business forward. Bringing others with you is the next critical step.

There are four basic elements needed to influence others:

Credibility Listening Logic and reasoning of your position Timing

They are listed in this order because it is the sequence required for influencing. We often make the mistake of jumping to arguing our position without having first established why someone should listen to use and what that person’s position is. You can’t influence unless

The other person believes you to be credible You understand the other person’s position properly – without this, how do you

know what you need to influence? Your timing is right. This is particularly tough in a crisis.

CredibilityCredibility is more than what you know. It is who you are, your relationships with others, and how you behave. It is a good idea to have a personal “elevator pitch” that accounts for your current position. For example, if your business position is predominantly red, then how do you reflect this? Understanding vulnerabilities and owning them well can significantly improve your credibility.

However, beware false empathy. Simply saying that you appreciate everyone is having a tough time and then trying to get the person to shift to your agenda is likely to undermine your credibility.

ListeningIf you want to influence, you must listen. This is even more important when people are stressed because stress affects what people can remember. You cannot influence someone until that person feels that you have understood their position. This means you need to listen with the aim of understanding the other person’s needs, concerns



and situation. It analogous to a doctor listening to a patient before prescribing a solution.

When you listen and understand the other person’s position, you make the opportunity to present your ideas more clearly and in the right context. This, in turn, makes your argument more credible. During a crisis, if the person you are listening to shares common vulnerabilities with you, sharing this can help evidence that you understand. Discussing weaknesses is a sign of strength, especially in difficult times.

TimingTiming is always critical to successfully engaging with someone and influencing them. During a crisis, err on the side of caution. Try and gather as much background information as you can to determine when is a good time to engage.

Adapting your communication style People respond to communications depending upon their personality. Communication goes beyond what you say or write. It encompasses your demeanour and body language.

You will increase your ability to influence by understanding how the other person is likely to engage with you better and adapt your communication style accordingly.

If you have followed the steps in this playbook, you will have a strong understanding of the value your business can deliver to the person you are communicating with. Our final piece of advice is “don’t try to establish a conversation with someone who won’t gain value from it”.

Let’s assume that you have a valuable piece of information or advice to communicate. Adapting your communication style can significantly improve how your message is heard:

The PioneerCharacteristics include:

Likes to try out new things Is competitive Becomes bored quite easily Has a relatively short attention span Is creative or inventive

Pioneers respond to communications that inspire them; that show them new opportunities or potential to make a difference. They are more interested in the big ideas than the detail.



The Fast FollowerCharacteristics include:

Likes to try out new things Does not like being first; seeks the reassurance of the Pioneer Is competitive Is creative Is logical As a team leader, is likely to be quite directional

Fast followers are drawn to the new but not the brand new. They require assurance that an idea is proven to be workable before they will buy into it.

The conservative Characteristics include:

Moderately risk averse Gains comfort from others’ decisions; conservatives are unlikely to be the first to

agree to something new Good team players As a team leader, is likely to be consultative

The ultra-conservative Characteristics include:

Very risk averse Uncomfortable with change Will try to retain the status quo

Reading list How to win friends and influence by Dale Carnegie Persuasion: the art of influencing people by James Borg Compelling people: the hidden qualities that make us influential by Matthew

Kohut


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