I have heard so many people say they cannot wait for things to get back to normal – meaning pre-pandemic conditions – and I have heard numerous others talking about the new normal. But has there ever been a normal? I do not believe anyone can explain what normal was or will be in the business world.
If you looked at business in terms of a timeline, I believe you would see that there has been a continual pattern of disruption throughout our history here in the United States. Yes, there have been periods of relative calm, but they have often been disrupted; as a result, businesses had to adapt to the new paradigm, which eventually was referred to as “normal.”
Here’s a brief history of disruption in the United States:
- 1850–1900: Industrial Revolution followed by the Civil War and the completion of the cross-country railway system (which spurred the country into a period of rapid growth)
- 1900–1950: The age of science and mass production, during which the country experienced the Great Depression and two World Wars
- 1950–1970: The digital revolution, also known as the third revolution
- 1973–1975: Energy Crisis – the country experienced an oil embargo
- 1980: Second Energy Crisis
- 1981–1982: Double Dip Recession
- 1990–1991: Savings & Loan Crisis
- 1995–2001: Tech Bubble
- September 11, 2001: The attack on the World Trade Center
- 2002: Stock Market downturn due to over-valued internet stocks, accounting scandals, and a loss of investor confidence
- 2003: Launching of the Iraq War
- 2005: Hurricanes Katrina and Rita
- 2007: Enron collapses
- 2007–2010: The Great Recession
- 2020: Worldwide COVID-19 pandemic that disrupted supply chains and business
During every period in between, people described that time as normal, only to have that sense of normalcy disrupted when a new form of normal evolved. With all this disruption in the United States, what really is normal? Can we even define it?
Regardless of a definition, what we do know is history tends to repeat itself, which makes learning lessons from the past particularly valuable.
Throughout the depressions, recessions, dot-com crashes, housing crashes, and pandemics, one thing is true: disruption to the business environment is normal. So, when we talk about the new normal, what are we really talking about? I believe we are talking about the periods of calm between every major disruption. The problem with this cycle is that business owners tend to get complacent when it is calm, but the reality is that those periods of calm will not last.
As history has shown, more disruption is guaranteed to be coming our way.
With this understanding, it is imperative that business owners start preparing their businesses to be adaptable and flexible so that they thrive during these challenging times and the ones to come.
The true normal in business is disruption which highlights the need to be flexible and agile.
Businesses, like human beings, are living breathing entities that must adapt and evolve to survive. Adapting to a constantly changing environment is normal in business.
Remember when it was normal that businesses create a 20-year plan for their future. This recommendation then evolved into a 15-year plan, then a 10-year plan. But planning 10 years out is not realistic or effective in today’s fast-paced business environment.
As a business owner, you must adapt and evolve at a much faster pace than ever before. Five years is even too far out to look ahead and plan; the pace of change will make such planning ineffective. Even three years may be too distant for good planning. Twelve months may just be the new norm.
Accept the fact that what got you to your pre-pandemic state of business may not be what you need to get to the next step in your business progression.
Pre-pandemic business was running smoothly, many businesses were making good money, and it felt like the norm.
For many, the pandemic impact felt like hitting a brick wall going 80 mph. Many business owners had become complacent, thinking that this pre-pandemic environment was normal, and it was going to continue for a very long time.
There is a rude awaking ahead for business owners who believe as soon as the pandemic is over, business will return to what was considered normal. Quite simply, too much has changed for that to be true. The business environment has once again changed, and those who adapt to this change will excel moving forward.
The future of work and what it will look like post- pandemic is anyone’s guess, but every business still needs to adhere to some key business principles, adapting them accordingly, to thrive in the post- pandemic future.
Has Your Strategy Changed?
It is time to rethink your strategy, making sure it is clear how you will add value to the customer and meet customer needs coming out of the pandemic. My definition of strategy: strategy is determining what the customer needs and then meeting that need. Your customers’ needs may have changed and thinking it will be business as usual is a mistake.
How do you determine whether your previous strategy is still effective? By communicating with your customers more often than you probably think is necessary. Inquire about their needs post-pandemic, how their business has changed, and what you can do to meet their new needs. A clear strategy on how you will meet and exceed customer needs is the first step to a thriving post- pandemic business.
Reevaluate Your Vision of the Future
There has always been a need to have a clear vision and direction for your business. It is likely that your previous vision, if you had one, has changed. Use a shorter timeline and think about where you want your business to be in the next 12 months. Base this new vision on the information you obtained from communicating with your customers as well as on the intel you gather about the current business environment.
It’s imperative that every business create a plan of what they want their business to look like in the future. Before we begin any journey, it is important to know where we are starting from.
What is the current state of your business (which has likely changed since March 2020), and what do you want it to look like a year from now?
Looking no further than a year allows you much more flexibility to adjust, adapt, and change with the constantly changing business environment.
Examine Your Core Values
Businesses should continue to articulate and operate from their core values; this has not changed. In fact, in difficult times, it is important to evaluate your core values and determine whether you are operating from a set of core values that is clearly defined and articulated.
Perhaps you have drifted away from your values, and it is time to bring them to the surface and determine whether you still believe and want to operate from that same set of core values.
Upgrade Your Leadership Skills
Leadership is critical now more than ever. The leadership skills you used pre-pandemic may need to be reevaluated, and it may even be necessary to upgrade that skill set to deal with the rapidly changing business environment.
Employees today want — and need — to be engaged and be a part of something bigger than themselves and that provides more meaning in their lives. Whether your business does well or not will come down to effective leadership. You cannot rely on leadership skills you learned 20 or 30 years ago. It is likely time for an upgrade.
Talent Management Is More Critical Now
The current reports coming out in the news say there are many jobs with no one willing to fill them. This is due to several reasons: employees being afraid to come back to work due to COVID; parents not having a source of childcare to return to work; and individuals making easy money on unemployment and government programs, creating less of an incentive to return to the workplace.
All of these factors make leading and managing the workplace environment even more critical. Employers competing for a limited labor pool will resort to offering higher wages, better benefits, and varying work schedules to accommodate the changing face of employment.
The new experience of working from home has also disrupted the traditional business environment. Many employees who were accustomed to coming into the office every day no longer want to do so, creating greater challenges to leading and managing your talented employees. Rethinking the work environment to maximize efficiency and effectiveness is essential to thriving in today’s workplace.
Have You Evaluated Your Marketing and Sales Plans?
The methods for marketing and selling in your business have changed dramatically due in part to the digital revolution. If you have not examined your marketing methods and evaluated their performance recently, then it is time to do so. Doing the same thing over and over and expecting improved results in a new environment is a recipe for slow sales.
Selling must be proactive. You cannot wait for sales to come to you. Go after sales by proactively communicating with your customers. Remember, strategy is determining what the customer needs and then meeting that need. You do that by communicating with your customers, and it is the same with sales.
If you want to sell more, communicate more. If you want to sell less, communicate less.
Focus on Operations
With fewer employees applying for work, and increased wages, businesses need to create more throughput, with the same production cost or less. The way to do that is through efficiencies and mechanization. If you have not value stream mapped or process mapped your business recently, now is the time to do so. Removing waste from your processes and procedures will help your business thrive.
Meeting customer needs in the most efficient and effective manner possible is critical to financial success. Mechanization may be a great method to improve output without increasing labor and even lowering the cost per unit while improving quality.
Financial Management is a Day-to-Day Activity
With every disruption in the business environment comes a disruption to your financial stability. Managing your finances is critical to success. During the pre-pandemic norm, many businesses were making very good revenue, and some became complacent. This business environment has changed that, and if you were not practicing good financial hygiene pre-pandemic, your business is likely feeling those effects. This is a reminder about the value of ongoing financial management, and the way that will help you meet a disruption head on.
Financial numbers drive everything in business, and understanding those numbers is important to your financial success. You cannot run your business by the seat of your pants, or the balance in your checkbook. Intense focus and thorough understanding of your finances is key to your future.
Make Friends with Your Banker and Engage Advisors
It is valuable to have a good relationship with your banker, and that takes being proactive. During good times, people often don’t bother to communicate with their banker as often as they should, and during bad times, business owners will hunker down and communicate even less. This is the wrong approach.
Your banker wants you to be successful and they understand the strain on business when there has been a disruption. Develop your relationship with your banker during the good times, and it will pay off when the bad times come; unfortunately, they always do come at some point.
Enlist advisors to provide an objective, independent, non- emotional, outside-the-box view of your business. Since they work with many companies in many industries, they often see things you cannot see.
Think Building Wealth Rather Than Avoiding Taxes
Although I completely understand the desire to not pay the tax man any more than you have to, but in minimizing your tax burden, you may be creating bigger problems.
To avoid paying taxes, many business owners try to spend their money at the end of the year. This, however, is a short-term strategy that will create a long-term negative impact on your business.
When you are thinking about avoiding taxes, you are not thinking about creating wealth in your business.
Maximizing after-tax profit to build wealth is a much more effective long-term strategy than focusing on short-term tax minimization. Without creating wealth in your business, you will have difficulty getting any kind of bank financing should you need it; or if you decide to sell your business, it will not be as attractive to a potential buyer.
Business wealth will also help you navigate and thrive during an economic disruption. Not having cash reserves in the business and needing to borrow from the bank for either short-term or long-term financing will not be possible if you have been focusing on tax avoidance rather than wealth creation.
future of business and work. If we get lulled into thinking “normal” is going gangbusters, then we are at risk of driving into a brick wall without a seat belt or an airbag.
History shows us the value of being prepared; following fundamental business principles helps us to be prepared. Regardless of what business you are in, the principles are the same and adhering to them leads to success.
For more on this topic: The book, The Future of Work, is a collection of advice from a group of six business advisors and consultants across three continents and four countries who specialize in working with small and medium enterprises. Get your copy on Amazon.
For more information on how to ensure you have a successful business in 2022, reach out to me at 503-312-3145 or email me at firstname.lastname@example.org
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