Four Business Defining Statements from COVID -19

FOUR BUSINESS DEFINING STATEMENTS FROM COVID-19

Here are four powerful statements I have picked up on our journey through this “impossible” season that will stay with us for a long time.

“To make a change something has to die or reach a dead end!”

The realization of the need to change may be understood and acknowledged for a long time. But is only when what you rely on is broken, lost or removed from your control that you begin to look for something else to take its place. Indeed, you have to finish college before you start thinking seriously about moving out of home. You may have to lose a job before you realize that you needed to upscale your skills to become more relevant and remain employable. No, COVID did not do this to us, it only served to bring it up.

“Re-invent yourself and make yourself relevant irrespective of what happens”

The fact that things are changing around you and that you are getting older and that the skills you learned long ago are getting out of date are a wake-up call for all of us to keep growing changing and becoming better at what we do. Enterprises know this and invest huge resources in developing business approaches and strategies to keep moving. Indeed, the market leaders always have several new products lined up for whatever season lies ahead. How much time do we take to re-invent ourselves, re-position ourselves in the market and adapt to changing conditions around us?  

“Professionals need to deconstruct what they know”

Many professionals have high qualifications and impressive certificates and can analyse anything in their field to the point of paralysis. Nonetheless, very few of them are able to deconstruct what they know into usable products, services and skill sets that can be consumed by the market or improve the society and environment in which they live. We call those special kind of people “innovators”, but they are really just professionals with the courage to apply what they know.

“reconnect with your customers”

COVID 19 has created a social distance between business and its customers. It was a self-serving relationship of needs and wants that was taken for granted. Now the relationship is being informed by “you simply cannot have it”. It is easy to say that this can be rectified by short dose “good” customer service. Nonetheless, you can be sure that it will not be business as usual in the days ahead. The customer is changing and making decisions about his relationship with business in the days ahead. But how can you reconnect with people you don’t even know. The struggle businesses will have in the long term is to show that they really cared for their customers when things were not so rosy and glossy.

Allan Bukusi

Retooling Professionals for the "New Normal"

Retooling for the New Normal

In the face of the impact of the COVID-19 Pandemic, professionals have not been spared the loss of jobs, consultancy assignments and opportunities to advance their careers. However, Professionals have a special role to play in the advancement of the “New Normal”. But to do so effectively, they will need retooling. Join us to find out how you can retool and reposition yourself for survival and success in the new normal. Click here to Register for the zoom meeting to be held 4^th June 2020 at 10.00hrs EAT.

   

COVID-19: Collaboration is necessary in the New Normal!

COVID-19: COLLABORATION IS NECESSARY IN THE “NEW NORMAL”

The global disruption caused by the COVID-19 pandemic has forced to the fore the need for new skills and competencies businesses need to navigating the economic times and market conditions. The application of skills will empower businesses and professionals to survive and continue to thrive in spite of the economic downturn. The “New Normal’ environment is characterized by; near term uncertainty, collapsed supply chains and financial strain and a general shift to online thinking. These conditions call for new tools and indeed new talents to effectively engage in the new market dynamics. One of the emerging tools for survival is “collaboration”.

When the word collaboration is mentioned, teamwork comes to mind. While this is an aspect of collaboration. The new normal demands that business leaders think beyond building functional and efficient teams in their organizations. There is now need to establish and structure “collaborations” further afield that will ensure business survival and long-term success. Collaboration is much more than teamwork. Collaboration, in the new normal, is not just an intra-organizational competence, but an extra-organization ability to form profitable alliances that will yield benefits for all parties concerned. Collaborations need to be structured at four levels; suppliers, networks, partnerships and competitors.

Broken supply chains have forced people to look at ways to re-supply their businesses with goods and services. It has made business rethink the wisdom of single sourcing or maintaining “favorite” or preferred suppliers. Supply chain dynamics have been opened up to democratic space where buyers investigate who else can deliver the same quality at a better (lower) cost. This means that brand names are under pressure to prove they are worth the high (quality) prices they charge for their products. At the same time, it has given opportunity to new players and companies with “no brand name” to deliver professional services to previously inaccessible buyers. Johnny-come-lately is as likely to be considered alongside bids presented by the Big boys in the industry. Businesses will now find it prudent to collaborate with several “suppliers” to ensure their own business continuity.

Networks are important databases to keep for quick insider information and “knowing how to get what is needed” in a market. These invaluable structures help a business navigate strained supply and demand conditions in a market. Marketers use networks and build networks to develop market share, but in the new normal this a skill that is essential for business collaboration with people, organizations and institutions that influence economic and market trends. For example, players in the education sector will find it beneficial to collaborate with government bodies that determine national policy on training and youth development.

Partnerships is an old word in business. Consultants use this approach when bidding for large jobs. Consultants come together through partnerships for a season and form a vehicle that will effectively deliver client services. However, the collaboration under discussion here is required with institutions upstream and down stream in a business process model. It also urges collaborating across industries serving the same or similar markets. For example, a bank may collaborate with a baker to supply confectioneries at an entertainment event run by a radio company. Yes, these collaborations have existed before, but the New Normal has highlighted them as an emerging competitive survival strategy. Which brings me to the aspect of “competition”.

Car manufacturers have long known that they can collaborate with competitors to incorporate the technological advances made by other car makers into their own products. One car maker will collaborate with a competitor to provide the “engine” for use in a new design. However, this has not been a general business practice. Shop front competitors hardly take advantage of such collaboration and indeed may out-rightly abhor the practice. But the practice has very sound profit margin economics attached to it. For example, two hardware stores operating side by side on a single street, obtain goods from the same supplier. Both make regular trips to the supplier to buy their “own” goods. However, if they collaborated on sourcing their goods, they could take turns at collecting goods from the supplier by “carpooling”. Both could literally cut the cost of transport their resupply costs by half! However, collaboration in the New Normal requires the will, courage and skill to step out of your comfortable secluded operations to reach out and negotiate a better deal for yourself and others in the market.

Allan Bukusi, May 2020

Six things SMEs can do to Survive COVID-19 and Thrive thereafter!

SIX THINGS SMALL AND MEDIUM SIZED ENTERPRISES (SMEs) CAN DO TO SURVIVE THE COVID 19 PANDEMIC AND THRIVE THEREAFTER

We carried out a poll during a training program for SMEs and the outcomes were pretty revealing. The three top most challenges for SMEs during these COVID times are Financials (cash-flow) 40%, customer retention and loyalty 21% and a very close third was technology (17%). While the finances and liquidity would be expected to be top priority at the moment, SMEs appreciate that without a solid customer base there can be no business at all. SMEs are also struggling with how to leverage and harness the power of technology in their businesses. Interestingly, suppliers and taxes are the least of an SMEs concern at the moment. As you think through these “big ones” let me volunteer some thoughts around this that will ensure that an SME does not find itself in A “crunch” in the days ahead.

First, financial issues are usually cumulative. In other words, it is hardly ever true that a business has been auctioned at the first sign of inability to repay monies it owes. By the time a business is being auctioned it may have gone through several major financial salvage efforts before it is finally placed at the mercy of the auctioneer’s hammer. This tells me that prudent financial management is critical to surviving the “crunch” times. How much liquidity does the business maintain in its day to day operations? How much does it keep in reserve in terms of treasury management? What profit margins does the business ensure to remain afloat? It is said that an employee should have enough money to keep him or her afloat for six months after losing a job. How long should a small business be able to stay afloat without an income? These are interesting questions and the ideal answers would be; ensure you maintain sufficient liquidity in cash to fund your working capital, ensure you build up treasury reserves to grow your business by skimming off 10% of your earnings and  grow your treasury to ensure you are able to survive one year in a crisis. This of course is a tall order; however, I think you will agree with me that these measures would have helped at a time such as this.

Second, SMEs are worried about customer retention and loyalty. But do you even know who they are? My question is do you have a relationship with them? Do they know you? Or do you know each other. Many SMEs maintain a shallow walk in clientele whom they hope to come in each day, week or month with regular order. The operative word is “hope”. In a crisis the customers disappear leaving the business with stock that cannot move. It would be nice to study your customers and customer base and develop a relationship with them so you don’t have to worry about whether they will come back or not. Which brings me to my third reflection on investment in available technology.

The world is moving on in the tech world and a lot of technology for business improvement is now available to SMEs. But are we using it? Are we willing to adapt and change?  Maybe not quite as fast as we could or should. In crunch times you need to know who you can rely on, but that is difficult if you done have their contacts. A barber who conducts his business under a tree may have a cell phone and a stream of regular clients. Indeed, he knows each by name and can tell you the time of the month they come for a haircut. This information would be very useful for him to create a cash-flow statement of projected earnings and earning times. However, three things limit him from doing this. one, he does not know what cash-flow is, two, he does not keep a record of when each customer comes for a cut. And three, he does not have their contacts. All of these things would be easily accessible to him if he learned to use the low-cost smart phone he owns!

Finally, the survey revealed that the business that would survive and thrive after the COVID season would NOT be those that have rich cash reserves. Nor would the “lean, fit and mean” machines reign in the market. And neither will swashbuckling entrepreneurs, willing to take business risk, rule the roost. For the record all of these scored nil votes. The enterprises that will survive and thrive into the future have the following characteristics; they must remain flexible and adaptable , they must be able to re-invent themselves and they must maintain a handle on market intelligence in order to respond to  consumer trends and remain relevant in their chosen markets.   

  

Allan Bukusi May 2020

The Nature of Wisdom

The Nature of Wisdom.

When we are young, we do what we want. When we grow up, we learn to take instructions. When we mature, we understand that there is wisdom in doing what we are told.

COVID-19: SME's Business Forum 28 May 2020

COVID-19: SME's FORUM 28^th MAY 2020

Do you own a small or medium sized enterprise? Are you an entrepreneur, business manager or independent professional service provider? Register for the zoom seminar here on 28^th May 10.00-12.00 EAT and find out how you can overcome the challenges presented by the COVID 19 Pandemic. – limited spaces available!

During our last seminar hosted for owners, managers and administrators of Private Schools we learned that “Deep conversations”, “Scenario Planning” and “Collaboration” are critical skills to business survival and business recovery However, SME’s in different sectors face many unique trials and need to quickly develop skills to successfully navigate the COVID-19 season.

Consider this a personal invitation from me as your host. This first SME's Business Forum is free. Look out for more empowering forums from us in the coming weeks.

Warm regards,

Allan Bukusi  

Learning, change & innovation

COVID-19; How to engage "Deep Conversations"

Deep Conversations

The global pandemic has demanded the evolution of new skills sets to enable a business and individuals get successfully through this season. The demands of the “New Normal” include working at home, up-scaling your online capability and managing health risks. However, at the heart of these changes is the need for “deep conversations” as outlined in my previous article on Business Recovery.

Situation

A situation requiring a deep conversation is one in which BOTH parties stand to lose greatly in the event that an agreement is not reached to salvage a relationship. It is also needed when an impasse on the way forward will result in huge damage to both parties. A “win” for one party will not result in a gain for the winning party.

Constrained circumstance

The need for deep conversations arise in constrained, contained environments with limited options or freedoms of gain. Such a situation is where two inmates are limited to one room. The two are constrained to use one blanket, one toilet and share whatever little else is available. If no agreement is reached, there will be a foul smell in the room that threatens the existence of both. The constrained circumstances imposed by the pandemic is evident in business between landlords and tenant, loanees and banks and other sectors wrestling to survive in limited market conditions.

Collaboration

In constrained circumstances, winning an argument or trying to get the upper hand in a discussion will not result in material gain. Neither does losing the argument open up opportunity to seek other options. While arriving at a win-win position may sound like ideal, the strongest outcome of this discussion will be collaboration in sharing the burdens of mitigating the impact of the pandemic during the COVID season. In order to engage successful deep conversations, it will be important to observe the following;

1. Leadership

Acknowledge that the constrained circumstance requires a head of maturity and plenty of emotional intelligence. The leader is able to look beyond the challenges of the immediate and search for a practical resolution of the matter at hand. The leader does not consider the other to be a personal opponent or instigator of the current environmental constraints. A dispassionate approach to the issues in the situation is a realistic place to begin. At least one person, a leader, needs to be willing to take the risk to engage a deep conversation to resolve issues at hand.

2. Empathize with the hurting.

Second, there is a need for deep listening to empathize with the fears, emotions, insecurity, pain, confusion, loss of self-esteem and social mistrust of all parties concerned. The loss of hope, the indignity of being brought to a position of disadvantage and loss of personal freedoms renders people extremely vulnerable. Handling such discussions therefore requires sensitivity and empathy without dismissing the need to deal with the reality. This internal battle requires courage and skillful counsel before meaningful and committal discussions can take place. However, addressing the emotional concerns will redirect emotional energies to look for creative options and solutions as a way out of the crisis instead of focusing on the problem.

3. Rational evaluation

Come up with a rational framework to evaluate the situation and understand its impact. While the loss of a job is an emotive issue, it is important to discuss the budgetary and expenditure constraints imposed by that loss.  Let there be no room for assumptions. This deep discussion will inform elements of resolution and collaboration out of the current constrained circumstances.

4. Core issues

Once both parties are on the “same page”, a discussion about the core issues becomes less threatening and distracting in the quest for a way forward. If the central issue is understood to be “no money”, then the discussion can shift to harnessing the wisdom, diversity and available knowledge from respected authorities to address the pertinent issues and determine the way forward. This deep discussion will yield possible solutions both palatable and unpalatable in the context of a working relationship between two parties.  

5. Resolution

The development of a resolution framework is really a discussion of creative options, innovative opportunity and some measure of experimentation, building trust and taking care of each other’s interests. This deep negotiation session is necessary to establish the best option for both parties. However, this is different from the regular bargaining in that there is a consideration to both share risk and hope for the future. It is an optimistic negotiation in good faith rather than an antagonistic or competitive bargain to get the most out of the deal.

6. Establish collaboration

The successful negotiation will engender a sense of partnership and joint venture. In this regard, the collaboration will undertake to share roles and responsibilities, establish points of check-in and review measures. It will also allow for consultation, feedback, raising red flags and incorporate a structure to discuss preventive measures in unfolding circumstances. This collaboration maintains a survival code that says “your success is our success” in an environment of mutual respect. However, a very strong collaborative relationship can be established on pessimistic premises as well. Most bank loan projections are based on evaluating the “worst case” scenario and forming agreements that enable both parties to pay due attention to mitigating concerns.  

7. Agreement

As the agreement is launched both parties take on acceptable risks and commit to work hard to ensure that the levels of trust invested in the collaboration is not breached. It could be that a loanee can miss an installment due to personal situations that were not envisaged when the negotiations were taking place. Therefore, a three months limit is set to secure both parties from injury in the collaboration. Nonetheless, the agreement is a document that safeguards the interest of both and outlines a working road map on the way forward.     

In conclusion, like every thing else in life, there are no guarantees. This framework cannot be forced into a fixed timeline. A deep conversation is a work in progress. The motivation to keep working at it is that by working at it, both parties will overcome the constrained yoke of their circumstances.

Useful reading

Binstock, L. (1969). The Power of Maturity. New York: Hawthorn Books.

Bukusi, A. D. (2018). How to Lead Corporate Transformation. Nairobi: Management Decision Information.

Fischer, R., & Ury, W. (1991). Getting to Yes. New York: Penguin Books.

Goleman, D. (2013). What Makes a Leader; Why Emotional Intelligence Matters? (Kindle edition): More than sound.

Kouzes, J. M., & Posner, B. Z. (2012). The Leadership Challenge. San Francisco: Jossey-Bass.

Patterson, K., Grenny, J., McMIllan, R., & Switzler, A. (2002). Crucial Conversations. New York: McGaw Hill.

Stone, D., Patton, B., & Heen, S. (1999). Difficult Converstions. London: Penguin Books.

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