We’re living in a world of much less that demands much more — especially for businesses facing changes in consumer demand, headcount, and financial resources. Particularly for those in the travel and hospitality industry, the pandemic has resulted in unprecedented change over a short period. 70% of hotel employees nationwide have been laid off or furloughed, with more than 8/10 rooms vacant according to the American Hotel & Lodging Association. While some have resorted to deep cuts (e.g. Hilton cut 22% of its global corporate workforce), others have adapted their offerings to suit current travel restrictions. Take Airbnb for example. The company shifted its focus from housing to experiences within the past five years, and in April, quickly pivoted to a virtual platform to help its hosts make up lost revenue and build for the future.
While many of us are living day to day, it’s never been more important to think about tomorrow. Business leaders should take the opportunity to pause and reevaluate their strategic priorities in order to build more resilient businesses for tomorrow.
Often, we find the time to fix issues after they occur, rather than building resilient systems that actively mitigate them. While the severity and scope of our current situation is unprecedented, presenting real and present risks to businesses and their employees, it has become increasingly clear that long-term survival requires a different approach that will continue to shift and adapt to uncertain circumstances.
Based on our experience working with leaders of various organizations from consumer retail to industrial manufacturing, here are a few guidelines for how to refresh and move forward with your initiatives pipeline.
1. Is your vision still relevant and sustainable?
Very few businesses will emerge unscathed in the COVID era. While your financial year strategy may have clearly delineated the vision, objectives, and activities for the year, changing consumer trends will have had significant financial ramifications for firms. Across all industries, consumer spending behavior is shifting to saving and extreme frugality. According to the Commerce Department, “consumer spending, which accounts for more than two-thirds of U.S. economic activity, plunged 13.6% last month, the biggest drop since the government started tracking the series in 1959.” Companies are finding that what worked before will no longer work today, and a more flexible, proactive approach is required to survive and thrive.
- Act quickly to deliver new consumer value and retain interest: As mentioned previously, Airbnb, which acted as a broker and online marketplace for offline experiences and housing, has shifted its value proposition online as have Google, Klook, and others that rely on tourism and travel. Many are questioning and comparing the value of these virtual experiences against their real-life counterparts. However, the speed and intensity at which these industries were impacted required an inventive, scrappy approach. And international travel is not expected to pick up quickly in the near future. In this case, moving quickly is preferable to making sure things are perfectly planned before implementation.
- Evaluate your corporate social responsibility and values: In light of recent social justice campaigns, it’s also important to ensure that your vision and objectives are in line with consumer expectations. As many as 71% of US consumers believe that companies have a social responsibility to their employees, environment, and community. While many companies are making statements in support of social causes, consumers are savvy enough to confirm that companies match their words with actions.
- Consider changing the system, if the fundamentals have shifted: International travel has largely ground to a halt, and domestic flights have decreased by as much as 90% in recent months. Travellers are wary to resume flying despite planned initiatives like installing plastic shields in between seats and social distancing measures, resulting in significant revenue loss for airlines and the entire travel industry. Moreover, different demographic segments are reacting differently. While travelers over the age of 60 with health concerns may stay away all together, travelers under the age of 30 are still scheduling summer trips. In travel and hospitality, fundamental shifts will need to occur to reflect a new reality that will be in place for at least a year, if not a few.
2. Do I really need to focus on this right now?
In times of crisis, you may be tempted to focus on what’s happening today at the expense of long-term strategic initiatives. With limited time and resources, do you focus on short-term initiatives to ride out the storm, or long-term initiatives that grant you a strategic advantage? It’s not always an either-or situation, but a balanced approach is required to mitigate issues down the road in case of future shocks to the economy and society.
Use the following considerations to reevaluate your existing strategic pipeline:
- Short-term (1–3 months) — will this activity keep the lights on? You will have the most certainty here, as these activities affect you day-to-day. Tactical activities associated with cutting costs or increasing sales revenue can be prioritized and split across the team to hit short-term targets. Ensure that your goals are clearly delineated and communicated to team members using a RACI to minimize redundant work and achieve quick wins. Weekly dashboards to track progress against goals can be helpful in providing visibility for the team to not only keep people accountable for their KPIs, but also to ensure you can provide support where needed.
- Mid-term (Up to a year) — will this initiative continue your growth trajectory? Initiatives that require more time and resources need to produce results that justify the investment. More than just keeping the lights on, how does each initiative in the mid-term help you hit your financial year targets and allow you to continue to grow in a sustained manner? For example, cost-cutting by reducing headcount does not set you up for sustained growth unless you find a way to automate repetitive tasks using Robotic Process Automation (RPA) or Intelligent Process Automation (IPA). Doing so can increase your operational agility and capacity so that team members focus on the tasks that matter the most to your clients and business.
- Long-term (1 year and beyond) — will this initiative enable innovation that sets you up for the future? With unpredictability comes the opportunity to try new things, think differently, and drive innovation that grants you a strategic advantage. Often, these initiatives will be pushed back or deprioritize in favor of short term projects or priorities. While innovation (at the best of times, and especially during a recession) can seem amorphous or even frightening to consider, it’s really about thinking differently to do things better, moving you towards your final goal or setting a new one. Take into consideration wider consumer and economic trends that may impact your business in future. Don’t forget that your competitors will be thinking similarly. Many are retrenching during the current crisis to emerge stronger than before.
For example, sustainability is a growing trend in the fashion industry, even more so in the current climate with people at home and not at stores. In terms of waste alone, 26 billion pounds of textiles end up in landfills each year according to the EPA. Trend reports also indicate that the sustainable market will continue to grow, with the U.S. sustainability market alone projected to reach $150 billion in sales by 2021. However, with consumers cutting spending during the recession, it can be tempting to cut spending on longer term initiatives to address current cash flow issues. Doing so requires sacrificing potential long-term gains to address the current emergency, making it more difficult to increase revenue.
3. Am I spending time on the things that matter most?
Not all things are equal. To prioritize and make effective use of time, we can leverage the Eisenhower decision matrix below, as popularized by Stephen Covey in The 7 Habits of Highly Effective People. Here, urgent refers to activities that require immediate attention, whereas important activities contribute to long-term objectives. The challenge in times of crisis is that it can be easy to focus on fighting fires day to day in reactive mode, rather than pushing forward strategic initiatives that create a sustainable advantage. After all, some of your competitors will still be making big moves for their business tomorrow. While these categories are not mutually exclusive, addressing urgent issues doesn’t necessarily move you closer to the end vision.
Tools like Hygger, Trello, and Asana allow you to prioritize tasks by value and effort to make efficient use of limited resources. You can also use 2x2 matrices that measure effort versus impact to find quick wins and Venn diagrams that look at the intersection between desirability, feasibility, and viability to be more deliberate about the trade offs you make. If an initiative requires more resources than do others, evaluate if it’s adding proportionally more value as well. Using visual tools to represent your decision making process can provide more visibility, for yourself and for others. When you have a big or new vision and are moving quickly, it’s vital to bring others into your thinking as much as possible.
How to get started
The time to act is now. Schedule a meeting with your senior team to cover the following items:
- Align on vision: Communicate the vision if it has changed, or reinforce it. While you might think that everyone is on the same page, this is not always the case, and this is not business as usual. Bring others into your thinking and practice transparency to mitigate any concerns from your team members.
- Set the team up for success: Help team members adjust to a new way of working that emphasizes agility and long-term thinking with short-term urgency by sharing new group norms. For example, what does a flexible decision-making process look like? Are fewer people involved? Encourage feedback on a regular basis, as this cycle will provide more visibility into potential issues, potentially preventing unpleasant surprises. It’s also important to have clear roles and responsibilities so that team members understand what is expected of them. If a re-organization is involved, establish a communication cadence that emphasizes proactivity and transparency.
- Acknowledge ambiguity: In the current environment (and beyond), certainty is hard to come by. Every day comes with new swift changes that you will not be able to control. However, setting up an agile organization that is equipped with the processes to react and initiate quickly, can set you up for success. Many organizations are shifting mindsets from everyday business to leveraging an innovator’s mindset.
Ready to start now? Get in touch to learn more about how we can help you do more with less. From acceleration workshops to our innovation and change management service offerings, we’d love to partner with you to keep bringing new ideas to life.