The year 2020 will go down in record books as one of the most financially challenging business environments. Dozens, if not hundreds or thousands, of businesses have lost customers and many may not ever recover from shutdowns when governments determined their activity was “non-essential.” I’m of the opinion that if you are selling something of value and customers want to buy what you are selling you are in an “essential” business.
Unfortunately, many small (and even large) companies are facing an existential reset. Many will have to seek and find new customers. More importantly, in the US where stimulus checks exceed minimum wages, a lot of small businesses face shortages of qualified staff in addition to loss and disruption in the supply chain.
One approach is to try to return to the business you once ran. This is unlikely to be a successful plan as many consumers are still tremendously frightened by government models overstating infection and death rates. Instead of dreaming and hoping for our old “normal” lives, businesses can take this opportunity to reset their business and innovation strategies and to streamline workflows. In this post, will focus on updating the business and innovation strategies and will discuss optimizing your workflows in a future post.
The business strategy reflects the purpose of the business. Why was the firm founded, what customers or markets does it serve, how does it make money, and how is it differentiated from other competitors in the industry? Traditional business strategies cover elements of competition such as serving as the lowest cost provider or as the highest quality producer. Often, the business strategy is defined through the organization’s mission statement.
An innovation strategy is a subset of a firm’s business strategy. The two are inextricably linked as creating new applications, technologies, and markets must reflect the core values, purpose, and philosophy of the company. However, the innovation strategy specifically addresses how new products, services, and programs will deliver revenue and market share to meet corporate goals. The business strategy is broader, including operational efficiency projects merger and acquisition, and financing.
The SWOT analysis (strengths, weakness, opportunities, and threats) is one of my favorite tools for decision-making. Especially in product innovation, we can become too focused on what we can design and develop. Just because we can do it, doesn’t mean that our customers want or need it. SWOT forces an outside perspective so that we look specifically at market trends and emerging competitors.
When you are resetting your strategy think about what your business offers – or can offer – that is better than your competition. Do you have a special cost advantage due to vertically-integrated supply chains? Are your products higher quality and lower maintenance than competitors? Is your staff trained for high-touch customer service? You will want to spend some time to deeply consider what advantages you have or can develop to be strengths in the new business world.
Weaknesses are very difficult for most businesses to evaluate honestly. You don’t want to look at your weaknesses with a shallow view. In the business world reset, you have an opportunity to close gaps that might not have been available to you in the past.
For example, if your hiring practices or team training was non-existent, you now have the chance to acquire the very best resources. Even though, time and cost are of immediate concern for survival, consider if team training will overcome different backgrounds and experiences of your new employees. I really like the DiSC® set of tools for team training and the Virtual Team Model (VTM) if your team will remain dispersed. You can set your teams on a standard of behavior that includes a customer-focus and approach to innovation by engaging in DiSC or VTM when first assembling a new team.
While strengths and weaknesses are internal perspectives, opportunities are outside of our control. Yet, taking advantage of external opportunities is what will allow your business and innovation programs to be successful. Today’s opportunities are numerous as many people might continue to be afraid of group gatherings or going to a regular work site. Besides YouTube and home delivery, how can you use the strengths of your operations and creativity to meet the needs of these customers? How can you serve the needs of customers with pent-up demand? How can your actions as a business or innovation leader reassure customers and consumers that “normal” can return?
Like weaknesses, companies and individuals tend to gloss over threats because it’s hard to think about negative consequences. But did your business consider a plan to be shutdown for two or more months because of government lockdowns? What other unanticipated actions – political or regulatory – could threaten your business as you reopen? For innovation, will you be able to acquire R&D professionals when the healthcare and pharmaceutical industries will have special government funding? If you work with the disabled, what threats are there to communication when people wear face masks? Are there disruptions to business from riots or violence that might emerge as protesters refuse (unconstitutional?) government lockdowns? Is there a threat of war with China? To anticipate the unanticipated, we have to cast a wide net in scenarios that could disrupt our businesses.
As much as I wish we could, we cannot expect “business as usual” after government lockdowns end. But all of us can take advantage of what we want our companies to be as we emerge into a different world. What will your strategy be for your business? How will your innovative products, services, and applications meet these business goals? Check out our sample SWOT analysis for a small business reset in 2020. Click here.
Learn more about how to use a SWOT analysis to determine your unique strengths, areas of weakness, external opportunities to advance above the competition , and threats from further government regulation. To learn more about resetting your strategy and planning for product innovation, please contact me for a complimentary 30-minute innovation coaching session. I can be reached at firstname.lastname@example.org or +1, area code 281, phone 787-3979.
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Building Innovation Leaders
I am inspired by writing, teaching, and coaching. I tackle life with an infusion of rigor, zeal, and faith. It brings me joy to help you build innovation leaders. Teresa Jurgens-Kowal is an experienced innovation professional with a passion for lifelong learning with a PhD in Chemical Engineering and an MBA in Computer and Information Decision Making. My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator. Contact me at email@example.com or area code 281 + phone 787-3979 for more information on coaching for entrepreneurs and innovators.