Plans imply certainties; strategies imply flexibility. Which do you think works best for us now?
We’ve just had a week in Devon. We wanted a quiet holiday nearby, so we could get back should lockdowns occur, keep away from crowds in holiday mode who may not socially distance, and find places open, not least to make sure we could eat..
What we planned to do and what we did changed every day. It was dependent on what was open, how many people were there, how they were behaving, and the weather. None of these factors could have been controlled by us. But because we adapted we managed.
Fundamentally, we didn’t plan. We set a strategy to base ourselves away from likely problem areas, go and see, stay if we like it, leave if we didn’t.
Finding a way forward
We’ve always lived in times of uncertainty, but this is in sharper focus because of the virus. There may be a second wave, we may not be able to go abroad with any certainty for some time, there may be local lockdowns, we may not be able to get everybody back to work, there may be issues with schools, and other unknown factors. We simply do not know. But we can’t leave it at that. As in life, in business we need to find a way forward.
Plans don’t work
A constant complaint from business people is that business plans do not work. They are quite right. A business plan is a model based upon a series of assumptions. It is generally used to raise funds and quickly becomes fairly useless because some assumptions will be wrong. You could change your assumptions in your model, re-run it, and see what the result is and that has value. Warning!
Simply changing your assumptions and re-running your business model in the current climate is crazy.
There are too many assumptions, and they’re too broad. Normally, we could say we expect our sales price to be between £100 and £200, and we expect 100 people a month or 50 people a month to take this offer up. We can run our model and see if we can live with the results or tweak them a bit. If we are in a local lockdown sales prices are irrelevant because we won’t be selling anything. We think there is a better, easier way.
Why plans are not helpful
This is why I say make fewer plans. They are too rigid. You need more flexibility which implies strategy and building resilience.
When we are in areas of extreme uncertainty as we are now, our natural reaction is to try and control whatever we can. We dive into more and more detail. Most of the time, we are controlling things which give us an illusion of benefit but no more. Don’t bother. We are only pandering to our emotions. Do something which gives you real control, and as far as is possible, is virus proof.
Building a flexible strategy – a local story
What do you do when your dance school has to close? Cut costs where possible, get a loan? That’s the accepted wisdom. Typically, costs for salaries, marketing and training go first. But that savages your ability to service customers when times change. It can take years to recover as you lose collective knowledge and momentum in the business. So maybe cut some costs. Keep your community going? Definitely. How can you do that? – after all, dancing is close contact, people from different social bubbles, and in an enclosed space.
What did the Piccadilly Ballroom do? They went online, with daily stretch classes, twice weekly masterclasses, one dance at a time, held a weekly Q&A session, and individual workshops where dancers practised at home. The business maintained just enough income, and dancers got so much better, because online they concentrated on technique. So, when the school reopened clients had improved a lot and loved the results so much so that some online classes are continuing.
If there is another lock down, dancing will carry on, income will drop but not catastrophically, and it can all be picked up again when lock down ends. It’s a flexible strategy and can cope with the unexpected. That is the key – flexibility and resilience.
Risk and reward
Before lockdown, we ranked our clients for risk of failure. Then we helped wherever we could with all the Government support schemes, and crucially, adjusting strategies to cope with the existing and future environment. It was exhausting. But worthwhile as every client is still in business. We’ve just ranked them again. Overall, their risk of failure has reduced, even though we expect that life will get more difficult once the Government schemes end. Building resilience has helped them all survive and adjusting their strategies to whatever normal may become has shown that their chances have improved over these last few months.
Recovery tool
We believe in strategies, not plans, that are agile, flexible and resilient. We have built strategies for our clients that do that, and that’s why all our clients are still alive and kicking. Now, we have a new Virus Recovery Tool to help you unearth ways of thinking about your business and the threats and opportunities the next months and years will bring. It only takes less than one hour to complete. Call us on 01202 520010 or email office@hixsons.co.uk to secure a place on your recovery journey. We are offering it for £100, half price, in the spirit of helping our business community.