As scary and disruptive as the COVID-19 pandemic has been, it’s not without its silver linings. As business consultants, we tend to focus on those positives that involve businesses.
For instance, while many state governments tried to differentiate between “essential” and “non-essential” businesses, many American business owners focused on finding ways they could continue providing their goods and/or services without endangering the public or their own employees.
For example, restaurants moved to offer socially distanced outside seating and curbside pick-up or “to go” orders, while grocery stores and other retail businesses limited the number of customers allowed in their stores at one time. Best Buy set up sales counters outside its front doors, so customers could pick up orders they’d purchased online quickly and safely.
How did these businesses adapt to an unexpected business disruption so quickly and effectively? They had a clear business strategy.
Simple answer, yet it’s an approach that many independent advisory firm owners can learn from; it also can make it easier for advisory firms to adapt and respond to current and future disruptions.
Advisory businesses thriving during these disruptive times are clear about their business strategy. While a Google search will result in myriad of conflicting definitions of that term, we simply tell our clients it is: “The working plan that carries out your vision.”
That may sound simplistic, but it really doesn’t have to be complicated. Think about it — what do the physical Best Buy stores do? They sell electronics for those who can’t wait for them to be delivered by mail.
When the pandemic hit, it was a no-brainer for Best Buy to keep selling electronics to those who didn’t want to wait for their Amazon deliveries, and it moved these sales curbside.
Local restaurants may be an even better example. Those thriving today are clear about their business strategy. They make great food — usually of a certain kind — and they provide a nice place for people to eat it.
When the physical restaurants were ordered to close, many restaurant owners fell back on their central business strategy and asked themselves, “How do we continue to make great food and get it to customers?” The answer was selling it curbside and delivering it.
Why You Need Clarity, Too
Having a clear business strategy is essential for you as an advisory owner, particularly during disruptions such as the present one. When we look at a firm, we can tell right away whether its owner knows what its strategy is (or not) — and it’s particularly evident these days.
Diving deeper, we view a business strategy is a framework that guides your decisions, such as how you allocate time and resources.
Growing a business confronts you with a series of choices, and having a clear business strategy can help you make those choices — particularly those that compete and/or conflict with each other. The larger a firm is, the greater the importance of a strategy to help it allocate resources, since there’s more to lose.
For instance, consider how you intend to grow your firm. You likely want more clients. Do you grow through organic growth (growing from within) or inorganic growth (growing through acquisitions)?
Fast organic growth requires generating high levels of client referrals, while inorganic growth typically takes generating leads of business owners.
Each focus takes leadership, managerial time and firm resources. Where are you going to apply those resources, and at what level? You need to decide which strategy fits best with your business vision.
At the other end of the spectrum, firms and owners without clear strategies tend to lose focus fast and often lose more focus in disruptive environments. They might start new projects on a whim and then lose interest in them when success doesn’t come fast enough, prompting them to move on and try something else.
Not only is this approach hard on a firm’s resources and on its owner (whether he/she knows it or not), it’s usually even harder on staff moral, as employees see their time and effort wasted — making it hard for them to get enthusiastic about future projects.
Surprisingly, since the beginning of the COVID-19 pandemic, many firm owners have been changing their so-far successful strategies for no apparent reason.
This may be because, when confronted by a situation that has no clear outcome and that they have very little to no control over, leaders lack focus and feel the need to “try something different.” This response is the direct result of them never really taking the time to commit to a real business strategy.
Setting a Firm Plan
What’s a good strategy? It can be whatever you want it to be, based on the vision of where you’re taking the business. Again, what’s important is to have a strategy and genuinely commit to it.
Good leaders are objective when making decisions for their businesses. And emotions can get in the way of success if you don’t have a strategy to guide you toward where you want to go and keep you focused.
Most owners want to grow their businesses. The key to successful business strategy is that you believe in it and commit to it.
This means choosing a course of action to grow your business that you believe in, commit to and will make every effort for it to succeed. Rarely does a business strategy get disrupted overnight, and while COVID-19 was disruptive, it’s wasn’t real disruption.
How do you know if you have a “bad” strategy? Not getting the help you need in the business and not having enough time are the biggest red flags. They mean you aren’t clear or focused enough to get everyone headed in the same direction.
It’s likely that you’re trying to do too many new things or to be too many things at the same time. By centering yourself and staying focused, you’ll help everyone else, too.
Remember, you’ll be more successful if you get — and keep — everyone in your firm working toward the same goal.
When to Change Strategies?
While it’s important to commit to implementing your strategy, there may come a time when you need to change it — when it becomes clear that your strategy won’t work out the way you wanted it to, that it’s too costly or you come up with a better idea.
Just be absolutely sure before you act; constantly changing your mind is the mark of a poor leader. And changing your strategy in times of a threat and/or disruption, like we have today, is usually a bad idea.
Remember, as a strategy, delivering financial advice is a sustainable business through all markets. The only disruption that advisory firms face today is not having clients come into the office.
Consequently, the only part of your current business strategy that has changed is no in-person client meetings.
If you hold true to the strategy you’ve always had, you’ll win. And the good news is that advisors with current technology can work with anyone, anywhere, increasing their ability to compete with all advisors 24/7.
Angie Herbers is an independent consultant to the advisory industry. She can be reached at [email protected].