As an entrepreneur, business school professor, and corporate board member, I've seen how strategic thinking--in both the short and the long term--can mean the difference between a company's demise and its survival. That's especially apparent now that the Covid-19 pandemic has forced every business to change its strategy. In my new book, Post Corona: From Crisis to Opportunity (Portfolio/Penguin), I offer advice to leaders faced with difficult decisions in this new era. Here are three essential insights from the book.
The pandemic is accelerating existing trends.
Covid-19 has initiated some trends and altered the direction of others, but its most enduring impact will be as an accelerant. Take any trend--social, business, or personal--and fast-forward 10 years. Even if your company isn't living in the year 2030 yet, the pandemic has spurred changes in consumer behavior and markets. This is clear in the rapid increase in online shopping, in the shift toward remote delivery of health care, and in the spectacular increase in valuation among the biggest tech firms.
The more disruptive the crisis, the greater the opportunities--and the risks.
Some firms, like big tech, are positioned on the right side of business trends and will be the primary winners of the pandemic. There's also an opportunity for positive changes in society. Remote learning, for example, could reverse the shameful trend toward scarcity and exclusion that has dominated higher education for 40 years. My optimism on this is tempered, however: Many of the trends the pandemic has accelerated are negative, chiefly the widening inequalities of wealth, health, and opportunity. Policymakers will need to take concrete action to prevent a flawed economy from becoming a free-for-all.
Key traits will determine who survives the crisis.
Companies with variable cost structures and asset-light models are more likely to make it through revenue declines. Products and services that give back time to people juggling work and schooling at home will be highly valued. And leaders who can increase employee satisfaction and innovation during the "great dispersion" of remote work will emerge with a potent new tool in their management toolkit. Most businesses that endure will benefit from some or all of these characteristics.
There is no better time to start a business than about six months into a recession. Talent, rent, and operation costs are low, and prudence and grit are embedded in each new company's DNA. Founders who start in lean times throw nickels around like manhole covers, even when the revenue starts rolling in, and learn by necessity the virtue of hard work. With the most venture capital available in 20 years, it's a great time for entrepreneurial talent to shine.