Covid-19 : Spend on selling!
The flip side to ‘conserving cash’, to manage the Covid-19 crisis!
Some years ago i had this great habit of listening to HBR Ideacasts during the metro ride to office.
One podcast i heard (and i’m unable to find it now) was an interview of two professors who had done research on some of the world’s best companies what made them great.
The differentiator — that these professors found — was that these companies were always focussed on growing.
Yes, they conserved cash; yes, they had their cost-cutting measures; yes, they focussed on efficiencies. But they never put any of these over higher revenues.
This was a very important idea that have shaped last few years of my leading Srijan.
What makes great companies, great, is their unrelenting focus on growth.
You may say that this is paradoxical to my earlier post where i speak about ‘conserving cash’ to manage the Covid-19 crisis.
No, it is not.
It is imperative to conserve cash during any financial crisis. It is prudent to control costs and ensure one is operationally profitable (yes, i do not understand the world of funded businesses which are yet to break even in 10 years of running their business! Neither am i capable of running such businesses, nor that is the nature of businesses i am speaking about in my posts).
And yet the central idea of this post — to stay focussed on selling and growing — holds true.
Conserving cash is a temporary measure to ensure good fiscal discipline. Postponing selling activity at any time in a business’ lifecycle, including in a crisis such as this Covid-19 one, will destroy the business.
This is exactly what we have done at Srijan. While we’ve taken pay cuts across 70% of the company to conserve our reserves built over last years, we’ve spent in hiring more people in sales including in the US. Infact, our pay cuts include covering the new sales managers’ extra costs.
The goal is clear. To sell and grow!
Even if in this year we are unable to grow much — and perhaps only survive with operational break-even — we will be in better shape and preparedness for the next year when economies and businesses around the world pick up.
