“Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it, or work around it.”
– Michael Jordan
Managing a business through what could be the economic crisis of our lifetime is daunting, yet we all know of businesses that have been able to thrive during difficult times. Was it because they were there at the right time and in the right place? Perhaps, but I have also seen examples of businesses in already challenged industries, including hospitality, that defied the odds and achieved sustainable success through the use of innovative thinking to keep ahead of the curve on their competition.
Success, especially during these times, requires deliberate planning and action. Doing nothing is risky and not an option. At Abbey 5 Star, we believe that delighting your customers has to be central to your planning process. Defensive initiatives, designed to protect business and ensure survival in the short term are, of course, important. However, these must be balanced with offensive initiatives that capture market share and future growth. Tempting as it may be to slash cost in a bid to survive, consider where and how deep these cuts should go. This is an opportunity to clean house and retool for growth: rightsize, not downsize.
While ‘rightsizing’, you’ll need to stay aware of the impact on culture to keep your team engaged and with a sense of belonging. But remember, without a good team, the battle is already lost before the fight. Surrounding yourself with a motivated, empowered workforce is a significant competitive advantage alone which will drive your business forward. However, the right tools are also vital- the right team empowered with the right tools will be doubly more capable in delivering transformational results.
The competition will likely be cutting cost, retrenching and perhaps disappointing their clients in the process. So how can market gaps be used in your favour? Some have changed marketing plans, locations, product range and pricing to exploit gaps. Being proactive and researching your market and competitors can help inform offensive strategies.
As a finance professional, I can’t help but think of cost and cash. I have to say that in a crisis, cash is undoubtedly your friend. You may find that cash is strapped in areas such as obsolete inventory and receivables. In most cases, it would be wrong to slash working capital as this will drive your customers away. It may be wiser to consider updating your products and services to stay fresh and relevant. You may also look closer at your supply chain, is there any way to enhance value by engaging with your core suppliers? I found that vendors may be more receptive and flexible during crises.
The best time to invest is during a crisis, yet many do not have the means or appetite. More than likely, you will find a war on resources; hence, choose your battles carefully. Invest if you have the means, perhaps focus investment where it positively impacts and delights your customers.
Despite all the best intentions and efforts, businesses are sadly failing every day. Sometimes this is inevitable and, from an economic perspective, results in a healthy reallocation of resources. The best businesses, though, will survive and be left to enjoy the rewards of a larger market share. Their success hinges on adapting to a new reality and surgically pulling multiple levers to effect change.
If you’d like to find out more about what proactive steps your hospitality business should be taking to thrive while lowering risk, please get in touch.
