First You Feed Your Unicorn
By John Hotson and Carla Haddad
Nassim Nicholas Taleb, a finance professor, writer, and former Wall Street trader, wrote a book called “The Black Swan.” He described black swans as events that we cannot predict due to their extreme rarity. However, when one of these events occurs, it leaves behind catastrophic consequences.
Taleb highlights that it is critical for companies to assume that a black swan event is always around the corner and to plan accordingly. While we may not be able to predict these rare events, owners need to do what they can to build a robust business that can withstand a major shock. If we take nothing else out of this global pandemic experience, it should be to Expect the Unexpected.
While COVID-19’s Black Swan impact has been devastating for countless businesses, many have endured and prospered during the pandemic. Why is that?
Contingency Planning is Not Enough
Most organizations face uncertainties of varying degrees on a regular basis. As a business owner, you have learned how to deal with problems as they arise and put contingency plans in place to adapt accordingly. Revising your company’s goals due to a disruptor entering your market; getting access to more capital due to the loss of a major client; delaying a product launch due to a supplier going bankrupt; or perhaps even rethinking your exit plans due to the loss of a key employee, are all fairly common challenges in today’s dynamic world, and they all have one thing in common. They are all reactions to specific events.
COVID-19 was completely unprecedented and happened so fast that unfortunately for many, no matter how fast they reacted, they could not contend with it. Black Swans are like that. Traditional contingency planning can’t do the job adequately.
So how do you plan for something that no one has ever experienced before?
The answer lies in turning your business from one that thinks in terms of reactive recovery planning, into one that employs a proactive business strategy – a strategy that enables you to build a business that anticipates the unforeseen.
Consider these three steps toward building a proactive business strategy.
Step 1: Feed Your Unicorn
Preparing for rare and unusual events requires rare and unusual thinking. That thinking starts with a clear understanding of what is truly unique about your business – your unicorn. What do you do better than anyone else? What is your biggest opportunity for market leadership? Will it come from your innovative products, your low prices, or being the very best at the customer experience you provide? Become known for your mastery by all of your stakeholders, and make it the basis of your business planning. Defining and nurturing your unicorn will not only distinguish you in good times but will make your business the trusted resource that people will look to in times of uncertainty. This important first step will lay the foundation on which you can build a proactive business strategy that will guide you through the unforeseen.
Step 2: Mind the Gap
As you define your unique value offering, consider the capability gaps that currently exist within your company. Do you personally have the skills required to lead in this new world or do you need to acquire them? Do you have access to the capital you may need? Is your vision understood – your way forward clear? What has the pandemic revealed about your employees? Have some hidden strengths emerged? Are the right people in the right jobs? Now is the time to engage your staff and ask for their insights on your new directions. Analyze what will become the new normal for your business and, with your key employees, create a plan for how you will fill the gaps that you need to fill in order to get you from where you are today to where you need to be. Building openness and flexibility into your company culture will make you more aware of what is happening around you. This will serve you well in the times of uncertainty ahead.
Step 3: Build Your Fan Base
Think of the ways in which your customers are being impacted by COVID-19. Have their buying patterns changed? If yes, what changes do you need to make in your business to match their new behaviors and realities? Talk to you customers about what their new normal looks like now – and three years in the future. Imagine what you can change in your business to help them reach their goals. Share this information with your employees. Do they understand how these changes will impact your business today and tomorrow? Help your team understand your customers’ changing needs so that they treat them accordingly – not just for now, but forever. Build not just employee and customer loyalty, but a dedicated fan base that will follow you anywhere – wherever you need to go when the next unforeseen event arrives.
Catastrophes Present Opportunities
Learning from unprecedented events can be a game changer for business owners. At BTA, we help owners get through challenging times by working with them every step of the way – whether that’s growing their business, exiting or stepping back from the day-to-day operations or preparing for the next unforeseen event. Contact us at email@example.com and we will help you build and implement a proactive business strategy to not only survive tough times, but thrive in the days ahead.
We are business owners and advisors that offer consulting services to entrepreneurs. Working hands-on, we help develop and implement effective strategies that increase business value, growth and profitability, to prepare for the future.