Deciding between keep or cut
This month we review recent news about mobility related ventures that got impacted by the pandemic. While there are quite some bad news, it should also not go unnoticed that there’s good news as well. Seemingly, it is not about “all or nothing” but about “the right” thing.
Here we are, summer 2020 — probably a summer that many of us had different plans for, and some of the recent business news are really not uplifting: Uber cutting a quarter of its workforce; major OEMs also cutting jobs and partnerships. Autonomous vehicle testing has been on hold for some 3 months now. In venture land the word is that startups have 6 months of runway left. So we might be up for a challenging second half of 2020. More specifically: transportation and the San Francisco Bay Area lead the field in startup layoffs — nothing to be proud of, but indicative of the situation.
How long is this going to last? Well, the answer is “nobody really knows!” It might be a long endurance race, not a sprint. But don’t forget, also your competitor doesn’t know — and BTW, neither your stakeholder. Let’s don’t get gloomy here, there is also good news: Tesla, autonomous driving investments, shared mobility pivots, successful IPOs — not bad for a crisis! Think about it: there is quite some bad, but also good news. Seems like it is not about “all or nothing”, it is about the “right” thing! The question to ask is ”how to decide between keep and cut?”, ”how to prioritize?” It is important to take a perspective “what to keep”. Because, after all, you should assume you made right decisions at some point, right?
To prioritize — first, it is important to have a metric to compare different tasks, projects, ventures. This can be points, plusses and minuses, colors, or whatever works for you. There are probably many things to assess: funding, technology readiness, market chances, brand fit, other commitments, available subsidies, and much more.
Second, rank the candidates from the top to identify high priorities. As you go down that list, keep an eye on the constraints; for instance your total funding, staff, projects, and so on.
Third, once you reach your constraint, ask yourself if the above is actually what your new portfolio should look like. If not — revise your metric and prioritization. This is where gut feeling matters, too. It is important for clarity why do this and not that. You see that those decisions and prioritizations are very individualistic. Rarely does it look the same for you and your competitor. Now — none of this is rocket science! But it also shouldn’t be bean counting, either. You might want to use this as a reminder or a checklist how to decide what to do. The key in this exercise is to focus on why you do things as opposed to think too much about what not to do, what to cut, what to let go.
Fourth, communication is important. Ask yourself: would you want to hear something like “stop doing that” or “let’s focus more on this”. What would rather motivate you? And actually — mean it, don’t just say it! Because, guess what, despite all financial and strategic considerations, it’s still the team that gets us through the downturn. This is about coaching people. It is key to boost motivation to make it to the next stage.
Finally, speaking about the next stage: we actually know something. If we look at S&P 500 performance over months during past recessions. It can take up to 1½ years to the bottom and as little as 1 year to full recovery. There might be our future path. To put that into perspective we are about here. Of course, this one might be different.
Therefore, let me close with what one of my clients often says these days: “This too shall pass, maybe like a kidney stone, but it will pass.” With this, let’s focus on the priorities and don’t chop off the future, know why you are doing what, and make sure you communicate it well — the team will pull it through.
Thanks for reading, see you next time — bye …
The video recording of this is available on Youtube
https://youtu.be/4pRUG2_HxAk
Stay tuned for more insights from Silicon Valley Mobility. We’ll be in touch…
