The normal life of an entrepreneur and their team has always meant hard work to deliver on passionate beliefs under conditions of uncertainty and unpredictability. The odds are against success, even under favorable market conditions. This year has been anything but “normal” for just about any enterprise, whether startup or established, and market conditions are like none in our lifetime. People at the helm of startups are seeing their depth of belief and conviction tested, but so are leaders of established businesses that seemed stable and secure a year ago.
Research for The Change Maker’s Playbook: How to Seek, Seed and Scale Innovation in Any Company, revealed that even though startup and established business leaders may at times be dismissive of each other, leaders at founders and established enterprises have much in common, and stand to learn quite a lot from each other. Now, in particular, is a time for the CFO to seek and apply learning from startup peers who are achieving results through the pandemic, demonstrating resiliency even with the odds against them. They are doubling down on what has helped get their businesses off the ground in the first place, finding new ways to strengthen financial performance, sharpen their focus, and create value for customers.
Here are six practices shared in recent interviews with leaders of early-stage companies serving sectors as diverse as fitness, retail, commercial real estate, ecommerce and building materials. All hold lessons that the CFO can apply within the Finance function, and also bring to C-Suite colleagues to leverage across the organization as they anticipate what it will take to emerge strong from the pandemic:
1. Be guided by your organization’s purpose.
A clear purpose illuminates the path to success especially at times of severe challenge, ambiguity and uncertainty. Purpose enables a long-view philosophy of what an organization has set out to achieve and avoids distraction from short-term shiny objects. It keeps everyone focused on customers and their needs. It enables the exploration of new ways to innovate and invent around the business’ core offering. It creates clarity by providing a consistent North Star horizon point towards which to navigate. Purpose sets an organization up to be patient, deliberate, thoughtful and aggressive even under circumstances full of unknowns.
2. Know your priorities.
Be clear on what the priorities are and how they have changed from what they were pre-crisis, during 2020, and as you anticipate turning the corner in 2021. One startup leadership team shared that theirs are “Cash, Clients, Product.” Another team has formulated a strategy to “Grow, Keep, Protect” customer relationships. Beyond having an agreed upon clear list of priorities among the executive team, be sure to discuss these with your team. Align with colleagues to ensure their teams are hearing the same message. Get beyond the usual collaborations – including non-obvious ones — and form new working relationships to find fresh solutions to meet the organization’s goals.
3. Care for employees.
Earlier this year there were glowing reports in the media about increased productivity among remote workers. But all is not well. There are a multitude of issues with remote work that will take significant time, effort and investment to address.
Consider giving time back by shortening all meetings to less time than they would have been in the office. Insist on unscheduled time for creative thinking, learning and development, and de-stressing. Make it easier and more efficient for people to work from home by consolidating all applications to one integrated platform, abandoning the best-of-breed approach that worked well for in-office delivery, but which may have become burdensome in this new environment.
4. Tap into your team’s collective experience.
We all bring our past experience to solving any current problem. Granted, none of us have lived through or emerged from a global pandemic, but most of us can look back at how we responded to other crises. These combined experiences create a foundation to help us absorb and adapt.
Different perspectives will enrich the outcomes. Organizations with inclusive cultures are more resilient because they are better prepared to welcome differences that contribute to a toolkit for weathering all kinds of conditions and will be better prepared to move quickly towards the next horizon.
5. Remember that cash is king.
We are on a long and bumpy road to recovery, so continue to extend the company’s cash runway to allow for longer decision-making time frames, customer holds on spending, and changing priorities. No doubt you have and will continue to take advantage of any further government relief programs, taken internal staffing actions, negotiated rate reductions with vendors, and engaged employees in identifying and implementing ways to improve the company’s cash position.
Be sensitive to the impact on customers of internal changes. This is a time when brands can quickly add or lose equity with their customers who may be depending on your products and services even more than usual or they may well be looking forward to reengaging with you as soon as the daily restrictions on life ease.
Engage in dialog with Sales and Marketing on where resources are being deployed. Assess the weighting of resources on developing new prospects, where it may be difficult to get mindshare and budget for new commitments now, versus focusing on prospects where the door has already been opened, versus reinforcing, revising or even expanding your value-add to existing customers.
Many businesses across an array of categories have pivoted effectively or begun experimenting with selling direct to end-users from their earlier B2B strategies. While lower impact in the short-term and a longer build to scale, this strategy offers the opportunity to experiment with and learn about how to reach new, potentially attractive market segments. We are already seeing evidence of permanent shifts in direct-to-end-user selling and relationship development that were not envisioned a year ago.
The CFO has a critical role to play, working with colleagues, to understand and implement the business model implications of strategic pivots of this magnitude.
6. Be insanely customer focused and adaptive to new needs.
The pandemic has forced all of us to adapt rapidly, especially to new customer expectations. The CFO cannot afford to wait for pre-pandemic processes to play out for receiving customer feedback. Along with their C-Suite peers, the CFO must get closer to the customer. They must become a direct student of customer behavior and needs and the affect they have on the business model.
To make progress, adopt a personal development goal reflecting how to boost knowledge of and empathy for your organization’s customers. Brainstorm with colleagues or members of your network for ideas on practical methods to take on new habits that bring you closer to the customer and lower the barriers to understanding them. This will enable you to actively participate in making strategic choices on updating the business’ products, services and experience, and ensuring that capital and other resources are in place to make these strategies real.