Survival of the Fittest
Covid 19 has highlighted the vulnerability of small and medium businesses and subjected them to the principles of Darwinism. The fit survived and the weak failed. But what determined the difference between the weak and the fit? Was it who had deep pockets and who did not? Perhaps it was who had an online presence and who did not. We could postulate on many theories such as this but the one common factor is that they all imply that Covid was the underlying cause.
The truth is that business by its very nature is subjected to ongoing change and there will be ones that can adapt and ones that cannot, as this change is occurring in shorter and shorter timeframes. Many of the business that failed during Covid may have failed in due course anyway. Covid is just one of many changes that businesses need to learn to live with.
The one thing we know is that change is inevitable and that in this modern technological world this change is getting ever quicker. Presently, knowledge is doubling every 13 months, but it is forecast that in the very near future it will double every 12 hours. Therefore, even without Covid, businesses are going to have to learn to live with rapidly changing business circumstances.
This need for businesses to learn to live with constant change was recognised by Peter Drucker, a famous consultant in the late 20th Century. He postulated that unless business reinvented themselves every 5 years, then they were setting themselves up for failure. Of course, every 5 years is just an approximation and in my own experience working with businesses, the successful businesses were the ones making major changes every 4 to 6 years. It cannot be a coincidence that Venture Capitalists tend to work on a 5 year timeframe for their investments. I am sure if he was talking about today’s businesses his timeframe would be even shorter.
Think about the businesses that did well during the Covid shutdown. They were the businesses that let their employees work from home. The expectation was that they would be less efficient. On the contrary, I have seen figures that outlined that employees worked more efficiently and in addition worked 2.5 hours of overtime or more to ensure that projects were done on time. They were the retailers who sold online, restaurants that arranged home delivery. Would they have made these changes without the impetus of Covid? Maybe but maybe not. The important point is that these were the ideas and changes they should have been thinking of anyway based on our premise that you should always be thinking of ways to reinvent your business to keep it current and thriving.
But how to think of these ideas. In our next blog we will outline a way of thinking that helps you to lay out alternatives so that whatever happens you always have an alternative route to take.