For many, the COVID-19 crisis evokes memories of the 2008 recession, when entrepreneurs – myself included – learned how to handle turbulence the hard way.
At the time, I was leading a small, early-stage company that hadn't raised much funding yet, and our term sheet had been pulled. As a lean team, we hunkered down, concentrated on the elements of our business that mattered most, and discovered that having limited resources breeds critical thinking and creativity. Ultimately, we pivoted our product strategy and made the decision to go to market with only 10% of what we had originally planned. It was painful to give up some of our more aspirational visions, and we weren't sure if it was the right decision, but we were scrappy, and we survived.
To be clear, this is not 2008. Present circumstances are different than they were back then, mainly in that we are facing levels of uncertainty that no one has ever seen before. In 2008, we knew it would be tough to move forward, but we had a general idea of how to bounce back, and how long it would take to do so.
Today, it's difficult to build any kind of strategy when the timeline for economic recovery is this much of a question mark. Any good business leader knows how to be decisive under pressure. But now, CEOs and founders are in uncharted territory, without any of the data they usually rely on to make those decisions. The best thing they can do is exercise an abundance of caution and make conservative choices.
Despite these significant differences, however, some core learnings from the Great Recession can still help guide business leaders through the present crisis.
Focus
In a time when so much is out of anyone's control, business leaders must start by homing in on what they can control. Every piece of advice I have on steering a company through this unprecedented situation boils down to focus. Focus on the customers who absolutely love the product, on the features required to attract and retain those customers, and on the team that is mission-critical to deliver the best service in challenging times.
Staying laser-focused on these core elements is the only way to execute effectively and your best chance of emerging stronger on the other side. It is simple advice, but much more difficult to streamline and execute than it sounds. It will take tough decisions, put you in uncomfortable positions as a leader, and force you to take a creative approach that could ultimately push your business from good to great.
Prospects and customers
Of course, businesses struggling in this environment need to prioritize retaining existing customers and winning new ones in order to stay afloat. That said, you should be looking at this through the lens of empathy, asking how you can best support customers and prospects, who are also facing new trials and obstacles right now. Their top three problems have likely changed dramatically.
This means a product that was once designed to help your company grow might need to be repositioned as helping the company save, which impacts marketing, messaging, discovery and the sales process. Existing customers will be looking to get more out of the products they already have, or companies risk getting cut. My recommendation to CEOs and founders is to proactively identify where your customers are, use your product in new and creative ways in this environment, and get it in front of them. You started your business with a deep understanding of the needs of the market. While they've shifted, your ability to deliver on those needs has not.
Product
Once the current pain points become clear, business leaders have to be nimble and flexible to adapt product plans accordingly. This might mean casting aside a large portion of what was in the pipeline, or bringing forward initiatives deeper in the backlog. When there are more resources and capacity, it's easy to work on multiple initiatives and think big. But when the business is lean and must be conservative, redirecting resources to mission-critical items is crucial. Those brilliant new features that would surprise and delight customers painfully take a back seat to features that will immediately help retain customers or uninspiring, table-stakes features that still help the business gobble up market share.
Finally, you should validate your hypotheses. This is good advice in all times, but it's crucial when you have to ruthlessly focus. During the 2008 crisis, we'd made a critical assumption on how we would acquire customers, yet we were spending a lot of time thinking about what to do after we had those customers. When the recession hit, we concentrated on validating that assumption first, and it led us to cut nearly 90% of what we wanted to do, while giving us a path to grow in an entirely new market.
Team
When product plans shift, you need to be clear on what matters in your company's internal communications, getting everyone within the organization on the same page as to the features that are critical to serving your current and prospective customers. Simplify priorities, give clear directives, and overcommunicate exactly how things are going to change for employees so that nothing falls through the cracks. I recommend upping the frequency of internal meetings, even if they are short – this gives everyone a way to touch base and make sure issues bubble to the top quickly.
As with your customers, this is a time to be extremely empathetic toward your employees. If your company is like mine, you have employees who are young, living in small apartments with multiple roommates, and possibly struggling to find space to be present on calls. Others are juggling work while their children are home from school. Most are working through the emotional and psychological toll of suddenly shifting to not only remote work, but remote work in a crisis. While it's always an essential value to have as a leader, understanding where your team is mentally and emotionally is crucial to supporting your company culture and helping them find their own focus in this difficult time.
Operations
Even with a fresh sense of focus, being required to make decisions without having all the information is a nightmare scenario for any business leader and their operations teams. But it also presents a new opportunity to be creative.
Now more than ever, CEOs and founders have to get comfortable with executing a plan and rallying people behind it, even if it goes against earlier plans or formerly effective practices. Employees need their leaders to step in with a strong, decisive voice, particularly when it comes to making financial decisions without data and with a potentially limited runway.
This includes giving operations departments permission to think outside the box. For example, for finance teams looking for ways to cut costs and better set the runway for the company, there are probably only a few obvious big-ticket items to cut. Once those cuts are made, look under every sofa cushion – eight $25,000 savings can help you keep a few extra full-time employees.
The bottom line: Preparing for the long haul
When this moment in time passes, the impact on our economy will remain, and the critical decisions made will have changed some businesses for the better – yet others may be discarded.
Adapting and refocusing your business priorities should help you critically evaluate the systems and processes you've been using and consider what to update to prepare for the long term. For instance, business travel may change in unanticipated ways. Gartner recently released a report showing that 74% of finance leaders expect at least some employees to shift to remote work permanently. That means remote work, in some iteration, will stay a part of our new normal, and forward-thinking companies need to identify ways of catering to a distributed workforce even after work-from-home mandates are lifted. The creativity and focus born out of the current necessity will be an asset in whatever world emerges from this crisis.
When the businesses that are fortunate enough to come back from this eventually do recover, the key question will be if they are equipped to weather another unexpected challenge in the future. Strategic preparation, focus, creativity and decisiveness may not only help your company weather downturns and stay agile during uncertain times, but also come out on the other side stronger than before.