" Hello everyone and welcome to this EDHEC Podcast on “Finding opportunity in Crisis”
The motivation to produce this podcast series comes from a very inspiring discussion I had with a small business owner just one day before the start of the confinement here in France.
I was in Paris in the city which was starting to become increasingly empty and I was sitting also in almost deserted restaurant. The staff was busy wiping the tables with hydroalcoholic liquid and the business owner was looking increasingly gloomy. I got into the discussion with him and he said that he was getting ready to close his restaurant for potentially a very long time and with the prospect of potentially not surviving this crisis with his business.
At the EDHEC chair for Foresight, Innovation and Transformation we help companies to work with scenarios to navigate in uncertain business environments. So, applying my frameworks in the conversation tried make him see the light at the end tunnel, despite the fact that I personally was having a hard time to see anything positive coming his way any time soon.
Nevertheless, I tried to help him navigate his thoughts about how confinement might play out for him and his business, what options he has and what imminent decisions he needs to take.
When leaving the restaurant 30 min later I felt however that it was mostly me who had learned a lesson.
Throughout our discussion I could witness how with his entrepreneurial mindset was relentlessly navigating the opportunity space which was unfolding before his eyes. While we talked, he was already engaging in the process of checking whether this will be feasible whether that would be sufficiently attractive and how he could make a viable business out of all this. I could witness a skills set that he applied that probably all companies need to develop and train to be successful within and after the current crisis.
So, it is about these learnings that I want to talk, today in our first podcast.
This podcast series will be dedicated to finding opportunities in uncertainty. We will be sharing stories on how businesses navigate these uncertain times. Sharing good experiences, but also what challenges they face and what solutions they try out. In this podcast series, we will also be open to keep cases anonymous, to ensure that we can talk openly about the DOs and DON’Ts, without the filtering of corporate communication departments. We will talk with business owners which prefer not to disclose their names because small and medium sized businesses today also face very difficult choices. They will be in situations where they need to decide if they will have to shift the focus of their business, let go of part of their employees, or put them in state-subsidized part-time employment. Many of you will aim to put your businesses in the kind of hibernation state where you can survive on a low energy level for long time. In these situations, you will have to ask to what kind of business world you will wake up again. Will it be the business environment which you knew or a dramatically change one in which your current set of capabilities and employees, are no longer sufficient to succeed.
We want to be first and foremost a forum for inspiration on how to find and develop opportunities, learn from others and jointly be more prepared to navigate in the fog in which most of us are, today.
But now, back to the story of the business owner.
As confinement for him means that he has essentially no right anymore to operate his restaurant as he is used to, his first conclusion was that he will have to close his business. As we however work through the options he really had on the table it became clear that the main question is how long this confinement will last. If the confinement is short. He would certainly be able to go into hibernation, wait for the crisis too to end, and eventually pick up his business and run it as he has run it for many years. If the confinement however would be long the environment in which he will have to operate would have been changed. His old regular customers would have changed their behavior. They would have grown more used to ordering their food, or cooking the food themselves, or buying pre-cooked meal. All this would result in his business being much less attractive, when he comes out of hibernation and coming out of hibernation would also mean that he would lack the financial buffer, which he has today.
So, while mapping out the options, closing completely, closing only the restaurant but keeping the kitchen open and with that responding to a potentially growing takeaway market, I realized that out of instinct he was always going back to his customers. Thinking how they would most likely start to adapt their way of life in response to the confinement. And I understood that his instinct navigates him to a first important technique. When a crisis is sufficiently systemic than it is not only your company which will be driven to change, but also your customers. Also, they will change their behavior, their needs and their consumption patterns. So, all business planning should be anchored in the anticipation of the new and future consumer, not in the needs of your current customers.
He then started to wonder: How he would still reach his customers. Who would be doing the delivery? Does it take new skills? Can he use his current staff? It was then that I realized that he was now starting to anticipate the responses of this key stakeholders: What would think? How would he motivate them to follow his new offerings? Always focusing on his primary stakeholders, his employees. While we were still talking, he already got out his phone to call his cook and his waitresses.
He followed the instinct to directly validate his hypothesis, validate things now, rather than later. While I was leaving, I could still hear him on the phone discussing with his stakeholders and probably calling his regular customers next.
It was for me very inspiring to see, how with a few new thoughts he directly jumped into checking the desirability of his offering, the feasible through checking with his stakeholders. Later he would still need to make the numbers to check the financial viability, but what inspired me maybe most was that he didn't want to let the old way of running his business limit his choices today. He refused to lose his spirit in this crisis situation. He relentlessly was looking ahead.
So, what I learned is if your business is disrupted. Don’t fight it, go back to the basic and start anticipating the future customer needs, be open to your employees and other stakeholders and let yourself be driving by your entrepreneurial spirit.
In uncertain environments you need to think in scenarios and opportunities. Number crunching, analyzing problem and finding optimal solutions can wait until later.
I hope you enjoyed this first little episode of our podcast series on finding opportunities in crisis.
In the next podcast we will talk about the importance of getting out of the binary world of before crisis and after crisis.
If you put yourself in the shoes of a manager in the airline industry today you have probably stopped most, if not all, of your operations. In doing so you are in good company with most other major airlines. Singapore Airlines is for example only operating 4% of its fleet, today. So, your attention is probably focused 100% on making sure that you can survive for as long as necessary and on keeping your business able to pick up operations again when the crisis is over. In addition, you will most likely try to anticipate how long this crisis could last, will it will be, one month, three months, six months, 12 months, 18 months?
In the next podcast will explain the importance of not being stuck in this binary world of normal operations, like before the crisis and no operations, like in the crisis, and the reason here is very simple. This crisis will most likely lead to systemic change on the consumer side which will be longer lasting then the confinement in any given market. We need to prepare for a deep sense of insecurity on the customer side. The times where we were jumping in a plane to visit another city over the weekend might be quite far away.
At the same time “no operations” is also something which is not sustainable. I'm thinking here very much about my own students which come from around the world and which right now cannot even go home to their families. I am thinking about all the maintenance which needs to take place in remote locations by engineers which happened to be on different continents. We also need to prepare for a long period of alternating Covid-19 hotspots around the world.
All this means that normal operations in the entire grid of an airline company is a prospect which might be very far in the future. However, it will be important to get some form of air traffic up and running again, stabilize it maybe with the help of novel technology for infection protection. In consequence, for the airline industry it is now not the time to hibernate but to innovate. Find new ways how to create a stable and more robust offering.
What is true for the airline industry is also true for many other industries and we will discuss how to get out of the binary planning of before and after the crisis and into a strategizing mode that uncovers new opportunities.
For now, many thanks for joining us today and wishing you all, a positive spirit when looking into the future!