“Nobody is gonna hit as hard as life, but it ain’t how hard you can hit. It’s how hard you can get hit and keep moving forward. It’s how much you can take, and keep moving forward. That’s how winning is done” – Rocky Balboa
COVID-19 has thrown a sucker punch to many businesses and unfortunately, even knockout punches to some. With the gradual reopening of the Indian economy, businesses are figuring out how to get back up from the mat and fight the next round. Taking a cue from some inspiring sports comeback stories, we have highlighted a few best practices that we have adopted at our portfolio companies to help combat this crisis and emerge fitter and stronger!
Hygiene is now hygiene – As businesses open-up, the importance of taking all the prescribed precautions cannot be overstated. Hand sanitizer stations, office sanitizing procedures, mask-wearing protocols will all now become part of day-to-day office functioning. That said, everyone needs to follow the correct protocol to ensure that it is effective. Michael Jordan once said, ”You can practice shooting 8 hours a day, but if your technique is wrong, then all you become is very good at shooting the wrong way.” The same goes for ensuring that health protocols put in place at your business do not become token safety measures. One best practice is having designated “health officers” who ensure that staff follow the protocols and train others when needed. Crucially, businesses need to have a clear plan and protocol in the case of an infection. Just as fire drills are now standard across companies and everyone in a hospital knows the protocol in the event of a Code Blue, businesses need to have a robust and rehearsed plan if an infection is detected with clear ownership and accountability on action steps
Cultivate a flexible and agile organization structure – Employees need to function in the new-normal and organization structures have to become more flexible and agile. One needs to evaluate shift schedules and rotations to minimize exposure. Do not assume that everyone in your team will feel safe enough to come back to work – colleagues will have different sets of constraints. Start thinking now about how you will handle operations if many people want to continue to work from home (WFH), and how you will treat all employees fairly in this case. Create diverse teams that focus on key priorities across business functions, such as finance and human resources, to resolve new or unexpected issues. Quickly identify and invest in cross-skilling. As in cricket, organizations will need a few strong all-rounders in the team who can play different roles if someone falls sick or is unable to perform their role for a short period. Identify your Garfield Sobers and Jacques Kallis. Another challenge will be handling meetings where participants are partly WFH and partly in the office. Consider adopting Shopify’s idea of everyone being in their own tile during meetings to not only enable social distancing but also ensure that the experience is the same for all employees whether they are at home or at the office
Communicate, communicate, communicate – Mike Krzyzewski led the Duke University basketball team to 5 NCAA titles and was brought in as coach of the USA National basketball team after the disastrous 2004 Olympic campaign when the “Dream-team” barely managed the bronze medal after having won gold in 12 of the preceding 14 Olympic basketball competitions. His simple motto to win with a team of superstars – “Effective teamwork begins and ends with communication.” Krzyzewski’s approach helped the National team win gold in the next three Olympics. You may have the most motivated and most qualified team, but a lack of communication in this uncertain environment is fatal. Regular communication with your internal stakeholders (employees and investors) and external stakeholders (customers and key service providers) is critical. The simple rule of thumb is that communication frequency needs to double. If you had a monthly review meeting, it needs to be run every fortnight. Consider the formats of communication as well – daily morning meetings, weekly AMA (Ask Me Anything) sessions, end of week milestone emails, 1-1 calls scheduled with key members of the team etc. A lot of the pain and anxiety lies in the uncertainty. Clear, compassionate, and confident communication reduces this anxiety by bringing some certainty – even if it is of a bad outcome. For example, Brian Chesky’s message to his team announcing the unfortunate layoffs at AirBnB was a masterclass in communication and corporate empathy
Keep your eye on growth – Ayrton Senna won his first Formula 1 title in Japan in 1988. Even though he was on pole position at the start of the race, his engine stalled and he barrelled down to 16th place. However, in extremely wet conditions, he raced all the way up to 1st place and clinched the F1 championship. He later said – “You can’t overtake 15 cars in sunny weather… but you can when it’s raining”. The storm of COVID-19 has presented that opportunity for high-quality businesses. There is market share waiting to be gained across every single industry. For the first few months post reopening, only focus on market share growth. Rethink how your sales function can work in this environment and how they can be digitally enabled to sell your product/service. Once the storm settles, you will be in a much stronger position than weaker rivals in your space
Scenario plan and change tactics when needed – Companies need to proactively run demand planning so that they can activate supply and resources accordingly. Given the range of potential scenarios, companies will need to be prepared to change course on a dime. Any steps that are taken to reopen should, therefore, be both scalable and reversible depending on whether you are playing offence or defence. Even consider having an extreme downside scenario in case you need to shut down again either due to external conditions or an internal outbreak. Develop an early warning system that alerts you to such a downside scenario. Commit to an elastic cost structure that allows you to scale up or down depending on the situation. Ensure you have adequate cash by raising equity, factoring receivables, selling under-utilized assets, or adding debt if the company can service it. Also, prepare for opportunistic M&A. In certain sectors, it may also make sense to have a small team focused just on identifying targets that will add value to the business. It is important to be flexible and nimble with your plans. A good example of this at play is Liverpool’s story in the 2005 Miracle of Istanbul. After falling 3 goals behind in the first half of the final, Liverpool changed formations from a defensive 4-4-1-1 to an attacking 3-5-2 and overcame the deficit. By changing their tactics, formation, and mindset, they won the UEFA Champions League against a much-vaunted AC Milan side.
The challenge posed by COVID-19 is clearly daunting – especially since no one can predict how the “Great Isolation” will end. However, the good news is that entrepreneurs are uniquely qualified for this exercise, as having a vision and defying the odds are part of their DNA. After the critically panned Rocky 5, everyone had written off Sylvester Stallone’s 6th edition of the Rocky movie franchise, ‘Rocky Balboa’. But ‘Rocky Balboa’ was a roaring success. Building on that success, Sylvester Stallone went on to make ‘Creed’ (Rocky 7) where he was nominated for an Academy Award nearly 40 years after he made the original Rocky. A wonderful comeback where life imitated art by following the script of his movies! Hopefully, these lessons from sport (in real and reel life) will help us all make that impressive comeback from the COVID-19 enforced time-out and craft a new story for others to tell.