While the coronavirus pandemic, the struggling stock market and the new remote working paradigm will strain most companies, some will adapt and position themselves to scale in this environment. Even in the face of cost cutting-- as competitors fall apart and the market declines-- you can reposition your company to scale.
While it might seem highly counterintuitive, now is a time of opportunity. The weaker companies will be shaken out while the strong will entrench and survive. Historically many well-known businesses, such as Google, Facebook and Airbnb, have risen from the ashes of recessions. The key is to adapt.
How can you adapt? Well one of the silver linings of the social distancing measures is that many teams have figured out how to navigate remote work. What seemed untenable to most management teams has now been demonstrated to be highly functional. Offices closed but companies adapted and kept operating.
As the co-founder of Spoke, a business process outsourcing company with a distributed global team, I've experienced remote work to deliver excellent results for years. Remote working is here to stay and I suspect that many companies will consider not taking office space after the stay in place orders are long gone. And that presents an opportunity. With remote work as a viable option, companies can both cut costs and scale their operations by leveraging lower cost labor.
Many Fortune 1000 companies, such as Amazon, American Express and Apple, figured this out long ago. They already leverage enormous remote workforces. According to the investment banking firm Baird, the remote workforce industry is 30 years old, generating $150 billion annually. The strategy that they use has an official name, and it's known as Business Process Outsourcing (BPO).
Here are two important advantages for outsourcing operations:
First, there's obviously cost efficiency. Outsourced service providers can complete business processes at lower costs due to economies of scale, specialized processes and employ low-cost country workers.
Second, remote working offers more flexibility. Outsourcing non-critical functions allow organizations to use their internal resources for core competencies and essential business functions.
If you want to lean into the gaps being created by this declining market, you should consider leveraging distributed teams. Not only will you be able to scale your operations now, but as the market returns you'll be poised to yield higher margins.
But what if you're a smaller business and not ready to invest in a BPO?
First, conduct weekly huddles with staff. Eat the frog first and go over performance first, then talk about social things, like what TV show everyone is watching. Wrap up performance and the week ahead at the end. Send the notes to everyone so there isn't a meeting push and everyone knows what their deliverables are.
Then, do culture maintenance. Force participation on Slack channels. For instance, if we're having a virtual happy hour, have people create a poll and vote. The more votes we get, the bigger the budget.
Finally, be sure to use technology and accountability tools, like Trello or Airtable, to automate who is responsible for what. Have a clear structure of who people can talk to so they don't feel trapped by one particular manager. There will be less face to face meetings so make these tech platforms the meeting rooms.
Remote working is here to stay and the best companies will embrace it. Companies that manage distributed teams will be better positioned to cherry-pick the best talent around the globe, navigate geographical uncertainty and manage costs.