Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” This quote is reasonably relevant today, as we have all taken a beating from COVID-19. Most successful firms had developed strategies years ago and have been consistently and successfully following them. However, what we’ve experienced the past several months — and are likely to experience for the next year — is to throw those strategies into the shredder. It is also important to remember that people sometimes tend to panic and do rash things during times like these. Therefore, it is an excellent time to focus on your strategy and thoroughly think through what is coming and — adjust it accordingly. As odd as it may sound, it may be a great time to have a “retreat” with your company leadership to focus on these coming changes. The struggle will be how to get through the short term while setting yourself for success in the long term.
Strategy, of course, is a topic of many management books and MBA courses around the globe. There are many different definitions and concepts of strategy. Developing a clear strategy and sharing that with your firm is critical to success. The strategy guru, Michael Porter, suggests two basic strategies: Do what your competitors do, but do it cheaper, or do something that only you can do. For example, you are a manufacturer who focuses on a single product — say, screens — and you make the absolute best screen that exists. Only you can produce the best screen in the world. In this case, the price may not matter. Your strategy is not about cost; it is about creating the absolute best product.
Conversely, are you an integrator who focuses solely on providing services? Your success is based on delivering service management and service contracts to your customers. Your customers know you as simply the best at this. They don’t call you and order boxes from you, because they know that is not what you do. Sure, that may bring in a few extra dollars and give you some points with the manufacturers, but it also risks your strategy on the off chance that people have bad experiences with the equipment you sold them.
So, as we think through these times that we are in, it is valuable to think about whether your current strategy has changed. And remember, this applies to all parts of our industry: manufacturers, integrators, designers and rental/staging. Each of these needs to consider the short term, say 18 months. Let’s consider rental and staging companies for a moment because that market is clearly struggling right now with the complete lack of any events going on. The leaders of these companies need to start thinking about whether that will change over the next year. How likely is it that they will be able to make any money between now and June 2021, using the same strategy? How can these firms take their skills, knowledge and equipment and apply them in different ways?
What about companies that have traditionally focused on the installation and integration business? There are some serious questions about the future of office spaces and the future of commercial real estate. Are these companies going to be able to survive going forward, using the same strategy they have in the past? Going back to my previous examples, if you are a company that focuses on super-high-end, expensive installs (quality over quantity), perhaps your strategy will continue to be fruitful. It would be hard to imagine that there will be none of these installs in the future. However, if you are a company that looked at quantity, say lower-priced installs (think K-12 education), but doing a lot of them, you may need to reconsider some of your strategies. You need to consider where those installations will be over the next five years and if there is a profit in them. I am not suggesting such a move, but instead offer an example, do you consider moving into the low- to mid-range residential customer?
There is plenty of competition in this field by the big boxes, no doubt. However, there could also be some consideration given to the future of theaters and entertainment. Will people be moving more toward quality home entertainment, and create a larger pie in this area? Is there a niche in the non-typical residential market with providing services to people to help them automate their homes? Yet, developing a strategy is a long-term move. Deciding to move into that area of business carries certain risks like insurance, your ability to continue supporting these installations and your future reputation. So you don’t want to decide on something to “get you through this period” that will just cause you problems in the future. That is, don’t do something that will save you today but put you out of business tomorrow.
As we think about the future of work, one thing we hear a lot about is that many people who were sent to work at home may never come back to the office. With that in mind, we can think about our experiences over the past several months. Yes, we got by. Was it ideal? No. Okay, so, next question: What type of setups will be needed, both in the home office and the “new normal” office, to actually make these situations ideal? I think there are both hardware and software tools and services that will improve our experiences. Businesses are currently trying to understand better how to support people in these new remote offices, at an increased number from the past. Do you have unique skills and capabilities you can offer these businesses? Can your firm be on the leading edge of these changes? Are you willing and ready to grab this opportunity and develop a new strategy for your business?
It is easy to look at the doom and gloom that the virus has caused the entire world. However, we know we will come out of this. We also know that we will come out of it a changed society as we have after every major catastrophe in the world. Spending time planning today to guarantee your business success in this changing environment is a worthwhile investment of your time that will pay long-term dividends.
By: Scott Tiner