Which businesses will survive the Covid-19 pandemic? Those built on delivering results rather than making promises.
For years leading up the pandemic, we celebrated sales-centric CEOs for achieving top-line growth and unicorn status. Masayoshi Son, CEO of SoftBank, helped pioneer this approach, pushing executives to hit the kinds of astronomical figures that excite investors. Considering that SoftBank went 15 years without recording an operating loss, that strategy clearly worked.
Until now, that is. The company expects to post a $12.5 billion loss in the first quarter of 2020 — and its situation is hardly unique.
With more than 40 million Americans out of work, it’s clear that many companies prioritized getting bigger instead of becoming stronger before the unexpected hit. Making matters worse, the growth-at-all-costs mentality makes it particularly hard to pivot in times like these. Instead of rising to the occasion, many sales-centric companies are now reckoning with their own shortcomings.
Companies with an operational focus fare much better in times of crisis. It might have previously been considered “boring,” but their ability to keep the lights on in good times and bad is now a vital skill. Leaders focused on operational excellence know from experience how to keep quality consistent amid declining budgets and how to extract savings from existing processes. Take Amazon, for instance. Jeff Bezos isn’t known as a great salesman; he’s recognized for his logistical innovation and operational focus.
Operational excellence leads businesses to become “anti-fragile,” meaning they’re insulated from disorder, uncertainty, and fear. They have structures in place to weather the unpredictable, and they have an organizational mindset built for survival.
Sales-centric companies rise during boom times and fall just as fast. Meanwhile, anti-fragile companies with an operational focus maintain remarkable levels of continuity during all economic conditions. Here’s how you can do the same for your business:
1. Be a phoenix. The pandemic has knocked a lot of companies off course. Instead of trying to scale back, do the opposite — rise from the ashes like a phoenix. In this tense moment, CEOs at anti-fragile companies are evaluating their maximum capacity to produce and committing to push ahead at full steam. Output in whatever form possible keeps revenue coming in, preserves relationships with vendors, and engages the workforce. In an evolve-or-die moment like this one, anti-fragile companies choose the former.
2. Bucket operational expenses. As you explore how to evolve, bucket your operational expenses versus variable expenses. The pandemic economy makes cash management extremely tricky; as companies reopen, they must decide how much to produce, how to accelerate cash conversion cycles, and how to maximize margins. Anti-fragile companies are willing to throw out the existing playbook to adapt to the moment while managing cash effectively.
3. Move slowly. Companies don’t become anti-fragile overnight. It’s a slow, systematic process that rewards patience and punishes haste. The last thing companies need right now are self-created disruptions. Take the time necessary for an in-depth examination of the ins-and-outs of your operations, looking for opportunities to make every feature more sustainable. Remember that you’re not just trying to survive the pandemic — you’re trying to future-proof the company.
Sales may feed the enterprise, but your business will be much more sustainable if operations lead it. After all, they’re the only truly “essential” parts of your business. With operations at the helm, you’ll be able to adapt, deliver results, and thrive regardless of any disruptions.