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Lessons From the Past

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Ask anyone – even the company veteran – if they’ve experienced any business disruptions that stack up to our most recent one. Chances are you’ll get a no. Even the 2008 financial crisis pales in comparison, according to most. We sat down with several leaders to discuss lessons of the past and how they have been informing current strategies.

Please enjoy the latest iteration of Navigating Disruption.

Planning For the Unforseeable

In this series we’ve heard the importance of emergency preparedness. But in talking with the CEO of a regional potato growing operation, we learned that institutional contingency plans are still a fairly new concept, having become more prominent after the terrorist attacks of September 11, 2001.

“And we do have those types of emergency plans, but they make more sense and are maybe more designed for a tornado or a fire or something like that, where you wake up one morning and you’ve got this big thing to deal with, whereas in the case of COVID-19, it was more of a gradual escalation.”

They also commented about the Atkins diet craze of the early 2000s and how they approached that disruption with a “back to basics” mindset.

“Remember the core of your business and do it well. I think in a time of crisis or major disruption, that’s the place to focus … At the time of the Atkins diet craze, we were just in potato chips, so we did some more fresh potatoes and have since gotten into sweet potatoes. We looked at things and said, ‘OK, we’ve got all of our eggs in one channel, maybe we should be broadening our channels a little bit.’”

The Great Recession

The 2008-2009 financial crisis was the biggest business disruption until recently. Many of the leaders we spoke to recounted the moves their companies made and how things played out over the last decade.

The CEO of a consulting design firm with clients across 32 states talked about their push to diversify after the ’08 downturn.

“The big challenge during a good economy is you don’t need to have robust business development systems because you’ve got more work than you know what to do with … Coming out of the 2008 crisis we really focused on diversifying our business more. We tried to develop different practices that would benefit us.”

Similarly, the CEO of a regional engineering and consulting firm told how their operations are more geographically complex years after the Great Recession and how that means they need more flexibility in dealing with the latest disruption.

“During that timeframe, our business was much more regional, probably 75% plus within a 100-mile radius of our headquarters. Now, more than 75% is spread all over North America.”

They also looked back on tough lessons learned from pay cuts following the ’08 crisis.

“In that 2008-2009 timeframe we made some salary staff reductions and did salary reductions on a broad basis. I would say that latter step hurt us more than if we had just made deeper cuts. We found that our more talented staff took advantage of other options, and so, our thinking coming out of that was, we’re going to identify different levels of criticality to our staff, and their relationships, and their ability to be productive partners in our work with our clients.

“But one of the surprising things about what we’re dealing with right now is we’ve not had to make any of those choices because we’ve remained busy.”

Finding Opportunity in Disruption

Making it through a business disruption is often about finding a new opportunity for growth.

The CEO of the outdoor furniture and design company we spoke with told how their organization found new business in the wake of the 2008 financial crisis, if only temporarily.

“We know a lot of people had negative impacts, but we think people were canceling vacations and were staying home more. That is where the staycation came from as far as I remember. And so, they were spending some money on their outdoor space, on their own home. We saw an impact, but then it seemed to go away pretty quickly.”

Where We’ve Been and Where We’re Going

The latest business disruption was unlike any in recent memory. But there’s enormous value in the lessons we’re learning about emergency preparedness, flexibility, communication and so much more. How these ideas will be applied to new strategies in the coming years has yet to be determined. Even looking back, we are still learning new things about past crises and feeling their impacts to this day.

Some key takeaways from our sources:

  • Stay adaptable
  • Focus on your core business
  • Look for opportunities in disruption

We hope you found worthwhile insights in this article. For more, read other articles from our Navigating Disruption series.

Thanks,

PRIME46


Are you a business leader seeking to adapt, change and grow following a business environment disruption? Let’s talk about how Prime46 research and strategic advice can help.

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