Covid-19

Prepare for Your (Unknown) Future

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A Dozen Comments and Questions

All of us are reeling from the impact of Covid-19 on our industry, business, and lives. This pandemic is an event that none of us were prepared for (although it was predicted) and hope to never face again.

However, Covid-19 is only the latest (although nastiest) surprise we have faced and certainly not the last we will face. The future keeps sneaking-up on us and we often find ourselves unprepared.

Think not? Consider the following examples of “unpreparedness.”

  • Was the U.S. auto industry prepared for the Japanese auto companies and their emphasis on quality?
  • Was Motorola prepared for Nokia and was Nokia prepared for Apple?
  • Were the department stores prepared for Amazon?
  • Were newspapers prepared for social media?

We, collectively, need to be better prepared for our sometimes-unknown, but often-ignored, futures.

I’ll examine the four parts of the cycle shown above in the coming week. By the way, the “D.E.W Line” is an artifact of the cold war. Stay tuned, I’ll explain.

We will launch a pilot course in January focused on helping managers and professionals be better prepared for their future. Like our recently competed pilot, The Pragmatic Strategist, this course will be a hybrid of reading, videos, group discussions (via Zoom) and workbook exercises.

WHAT WE KNOW FOR SURE – Part 5 -PROBLEMs

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We posted COVID, STRATEGY, AND WHAT WE KNOW FOR SURE a few weeks ago. Here are some further comments and observations about the fourth “known” — the proliferation of complex problems.

MindPrep Resource Center

Gee, about a year ago, things were simple. Put together a good strategy and ride it into the future. Sweet!

BAM! COVID-19! >>>>> Complex problems on the rise.

Pre-Covid problem resolution

In the “good ole days” (2019) most of our problems could be address singly. Expertise and experience could be applied because, as the T-shirt says, we’ve “been there and done that.”

  • PROBLEM? Know that a problem exists. Although problems should be “obvious,” that’s not always the case.
  • PROBLEM! Define the problem. Problems are often obscured by their symptoms. You need to look beyond the symptoms to find their cause. That’s where you’ll find the real problem.
  • P.R.O.B.L.E.M. Describe the problem with respect to its urgency, importance, clarity, complexity, and ownership.
  • STRATEGIES? Develop strategies to solve the problem. Except for the simplest of problems there are usually more than one way to resolve them.
  • STRATEGY! Select the best strategy. Use known and accepted criteria to evaluate all of the strategies and pick the best.
  • IMPLEMENT! Implement the strategy. What did your assessment tell you about your chances of success?
  • REVIEW! Review the results and improve your skills. Learning and improvement takes place using a rigorous after-action review process.

Post-Covid problem resolution complications

  • The “new normal” is slowly evolving. Do you describe the problem in the context of your old business or should you define the problem in the context of your reinvented business?
  • How urgent and important is the problem in a pandemic world. Can you even triage your suite of problems until a vaccine is on the horizon?
  • How many options are really available given the level of uncertainty? Will everything be built on a foundation of tentative assumptions?
  • Is there a “best” strategy to resolve the problem(s) or should you satisfice for the time being?

Advice while you wait for the new normal

Spend some quality “think time” focused on your business model and how you think it might evolve. Solve all big problems in the context of your evolving business model. Build a few scenarios and track them. For example, how does the problem look in a “shrink then grow” scenario? What about a “get acquired” scenario?

Assess every assumption you’ve made about business survival and success. What problem resolutions impact, or are impacted by, these assumptions. For example, what assumptions are you making about your workforce? About your customers?

Similar to using a Project Management Office to coordinate projects in your company, you might want to institute a Problem Resolution Team to integrate the efforts to resolve the big problems facing your company. Complex problems have dynamic interrelationships and few of your problems will stand alone. Take a systems approach.

We are in the process of revising our existing offering for Solving Complex Business Problems . That in itself is a complex problem. Wish is luck.

WHAT WE KNOW FOR SURE – Part 4 – the need for speed

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We posted COVID, STRATEGY, AND WHAT WE KNOW FOR SURE a couple of weeks ago. Here are some further comments and observations about the third “known.”

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Gee, about a year ago, things were simple. Put together a good strategy and ride it into the future. Sweet!

BAM! COVID-19! >>>>> Move fast enough or become irrelevant.

What do you do when caught in an ambush? You move! And “which way” is a matter of judgment and luck. You can’t take the time to run a detailed analysis of options — you don’t have any time to spare.

What don’t you do when caught in an ambush? Stand still. If you do you’ll be dead.

You may not like the options for change open to you but you’ve been caught in the Covid ambush and have to act accordingly. You do know that something has to change. Or, more likely, many things have to change simultaneously.

Maybe you can fall back on your experience; but unless you’re a crisis expert you don’t have much relevant experience. Maybe you can convene a group of experts; but that takes time you don’t have.

What to do? Well, let me suggest something scary and radical. Describe the situation to your managers and let them tell you what to change. They have their “boots on the ground” so they see the real world. And, they are usually smarter than you think. They likely see options you don’t see and will know how to implement them without calling the consultants.

Will they (and you) make mistakes? Heck yes. But, if you are also agile you’ll recover from those mistakes and keep moving.

Remember, standing still (like waiting for a bailout) is NOT AN OPTION.

WHAT WE KNOW FOR SURE – Part 3 – Financial Pressure

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We posted COVID, STRATEGY, AND WHAT WE KNOW FOR SURE about a week ago. Here are some further comments and observations about the second “known.”

MindPrep Resource Center

Gee, about a year ago, things were simple. Put together a good strategy and ride it into the future. Sweet!

BAM! COVID-19! >>>>> FINANCIAL PRESSURE WILL INCREASE!

OK, it’s obvious that financial pressures have and will increase. The question you might want to dig into is “So, how much should I, a non-expert but an up-and-coming leader, need to know?”

See if the following list list makes you nervous. If so, start learning just a wee bit more about the magic stuff (money) that keeps your business running.

Profit and Loss Statement

  • Net Sales
  • Cost of Goods Sold
  • Merchandise/Product Margins
  • Net Profit
  • Cash vs. Non-Cash Items
  • Accrual Reporting vs. Cash Reporting
  • Variance Analysis
  • Are you really making money? How much profit does the company make on $1 of revenue?

Balance Sheet

  • Types of Assets
  • Types of Debt
  • Owners Equity

Cash Flows

  • Operating
  • Investing
  • Financing

Meaning of Basic Financial Ratios

  • DuPont ROE Model
  • Return on Investment
  • Return on Sales
  • Return on Assets
  • Impact of Leverage/Borrowing

Budgets

  • How to Budget
  • Variance Analysis

Don’t get snowed as the world changes around you. Financial literacy is needed at ALL levels of leadership.

WHAT WE KNOW FOR SURE – Part 2

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I posted COVID, STRATEGY, AND WHAT WE KNOW FOR SURE about a week ago. Here are some further comments and observations about the first “known.”

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Gee, about a year ago, things were simple. Put together a good strategy and ride it into the future. Sweet!

BAM! COVID-19! >>>>> STRATEGY WILL CHANGE (OFTEN?) !

Strategy development follows a predictable cycle. Sense what’s happening in the larger world. Make Sense of the changes and their impacts. Decide on course of action (your strategy). And Act to execute the strategy “fast enough.” And get ready to do it again. These four actions are the basis of the Sense-Response Cycle that we explore at MindPrep Resource Center (www.mindprep.com)

Now, take a look at 2020.

  • Sense: Good grief, the entire business ecosystem is in flux. Boeing and airlines are facing dueling delivery schedules. Restaurants have to deal with social distancing and lockdowns. Universities are moving classes online and students want a tuition reimbursement. Public transportation is in a tailspin while motorcycle companies are facing increased demand. Retailers are abandoning malls. And that’s just what I read in today’s news!
  • Make Sense: Many of the assumptions that “must be true” for a business to succeed are shaky. Stakeholders are in conflict. All of today’s actions will have consequences and many of them are unknown because of the flux in the business environment. And many of the models we’ve used to explain business success are being strained and may no longer apply.
  • Decide: There are a dozen factors that define business strategy and many of them are changing. Tell me, which of the following are solid for your business? (These factors are more fully explained in our workbook How to Turn Strategic Concepts into Actionable Strategy.)
    • Business environment
    • Competitors
    • Customers
    • Offerings
    • Workforce and organization
    • Equipment
    • Facilities and location
    • Infrastructure technology
    • Policies and procedures
    • Infrastructure technology
    • Partners
    • Resources
  • Act: “Back in the day” we used to talk about sustainable competitive advantage. Nothing is sustainable in the era of Covid-19. Get ready to run this cycle again and again.

We just finished the pilot session of a new, hybrid training program, The Pragmatic Strategist. We need to make a few changes and will announce the fall/winter offerings for this program in the coming weeks.

I’ll comment on the rest of these “knowns” in the coming couple of weeks. What would you add to our list? Seriously, what would you add?

By the way, I love to write. But I wonder if anyone is reading and getting anything of value. I’d love to hear from you if you have any comments at all.

Stay safe. The pandemic is real.

Learn from the past - deal with today - prepare for the future.

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