Key Considerations for Navigating Uncertain Times in Business
In times of crisis, such as the ongoing coronavirus pandemic, it is crucial for executives to assess the impact on their business model and brand. To help with this, we have developed a comprehensive framework over the course of a decade that can help executives identify the risks and opportunities that arise during a crisis.
The first step is to examine four core dimensions of your business model and brand: customers, value propositions, value demonstrations, and capabilities. After analyzing the connections between these dimensions, you can then define realistic objectives for your organization, both during and after the crisis. It may be necessary to have different objectives based on various crisis scenarios, such as focusing on fast recovery or preparing for an extended lockdown period.
Let's delve into the four dimensions:
Customer Demand: Assess how the crisis impacts customer demand. Will it increase or decrease overall? Are spending patterns changing? Are there any new customer groups to consider? Additionally, consider any safety concerns that may arise due to the virus.
Value Proposition: Determine how the coronavirus affects your value proposition. For example, in the higher education industry, students still desire education, but if campuses are closed for an extended period of time, institutions must reevaluate how they can provide value as online institutions and differentiate themselves from competition.
Value Demonstration: Consider how the crisis affects your sales and marketing channels. With restrictions on personal interactions and travel, traditional value demonstrations like customer meetings and trade shows are not possible. Explore new ways to demonstrate value, such as utilizing video conferencing software and online sales materials.
Capabilities: Assess how the crisis puts a strain on your capabilities and identify which ones need to be prioritized. Some capabilities may require less attention, while others, like IT support for video conferencing, may become more critical. Pay attention to the impact on supply chain and production capabilities and consider the effects of employees working remotely.
Once you have assessed each dimension, it is important to align potential changes in one dimension with the others. Identify which customer segments value your offerings and determine if those preferences will change because of the crisis. Consider transitions from one value demonstration channel to another and explore how shortages in certain capabilities can activate local production or shift focus from demonstration to value proposition.
In summary, a crisis not only challenges the various dimensions of a business model but also presents opportunities to adjust and realign those dimensions. By carefully assessing and responding to these changes, businesses can navigate uncertain times successfully.
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