The COVID-19 pandemic continues to disrupt supply chains and reset consumer priorities. Many companies have been compelled to take a closer look at how they do business, and specifically how they will generate revenue in a rapidly changing marketplace.
“If demand is dropping quickly,” says CEO Coaching International Coach David Sobel, “do something about it.” Depending on the circumstances, “doing something” might include making a complete pivot in your company’s sales strategy, products and/or playbook.
With the help of their coaches, several CEO Coaching International clients have been able to successfully shift, some to meet immediate demand created by the pandemic itself, and others to accommodate new market realities from customers with tighter budgetary restrictions. If you are considering a pivot, there are three important things to keep in mind.
First: Reach out to Key Relationships
The very first step for every CEO should be to reach out to their Key Relationships: top customers, suppliers, even friendly competitors. The purpose of this is to collect market intelligence – and to calibrate what you are being told by your own salespeople – about product and pricing trends. However, it will also provide critical guidance, straight from the source, about your customers’ unanticipated needs, new opportunities that you hadn’t considered, and openings created by some competitors who are over-reacting, under-reacting and underperforming.
This practice helped David Thornhill, President of Integrated Textile (ITS) in Virginia, make his pivot. ITS is a traditional “cut and sew” business, that had come to rely heavily over the previous decade on fulfilling Department of Defense contracts for tents, packs and body armor. As he reached out to Key Relationships, a customer remembered buying masks from David 10 years ago and asked if ITS could set up a line quickly. David quickly shifted his lines and has now sold millions of units of “Made in America” masks, gowns, tunics and other PPE gear, shipped to government agencies and health care system clients. Automated machinery is now on the way to increase his capacity to tens of thousands of units per day.
“Nowadays, it’s obvious that masks are high in demand,” CEO Coaching International Partner and Coach, Chris Larkins, said. “But if David hadn’t reached out to his Key Relationships as this crisis began to unfold, he would have learned about opportunity too late to capitalize on it as quickly as he did. Now, ITS is the shining example of a company whose revenues are up year over year.”
For his part, David credits Chris’ guidance for pushing him to take full advantage of the opportunity. “As the crisis hit, I was urged to begin working the phones and it paid off quickly. Chris and I increased our call frequency to weekly, and it was extremely valuable to help me capitalize on this huge opportunity – from quickly launching a successful sales strategy, to freeing up cash to invest in machinery.”
If a CEO has neglected reaching out to their key relationships, Larkins said it’s not too late to make the connection now, though this experience should serve as a reminder never again to let this responsibility down.
“It’s one of your primary jobs as a CEO to own and tend to key relationships,” Larkins said. “What we think are the opportunities today – namely in PPE [personal protective equipment] – might be a wave that you can ride for quite a long time; but new opportunities that we can’t yet envision might emerge next month or the month after that.”
Second: Stick to core competencies
After reaching out to key relationships and brainstorming ideas, a CEO should be careful to stick to the ideas that are within the company’s wheelhouse, so to speak. The company is more likely to make a successful pivot if the change aligns with the skills that already set the company apart from the competition.
Take Bin Yu, for example. He’s the founder and CEO of HitLights, a leading provider of LED Strip Lights for trade shows and exhibits, and he knew he had to prepare for a pivot when those events were canceled. After reaching out to his key relationships, he reflected on what his company is good at and what its core competencies are, and he recognized that HitLights is good at sourcing and managing a supply chain.
In just a few weeks, Yu and his team were able to source masks and gloves from manufacturers in the US and China, and provide that gear to government agencies, hospitals, and other health care facilities.
“I’ve seen companies try to make a pivot right now and they’re failing fast because it’s not within their core competencies,” Sobel said, noting that pivots should not just be about making money. “You could make money selling any widget if you wanted to. You have to have the core competencies to execute on the plan.”
Similarly, Dan Oas, the founder and CEO of High Caliber Line, is an established supplier of promotional products. As trade shows were canceled across the board, and companies withdrew orders for promotional giveaways, Oas leaned instead on his core competency as an expert in sourcing just about anything cost-effectively from around the world. This expertise is central to the promotional products business in the first place.
“As he began to reach out to his key relationships,” Oas’ coach Chris Larkins remarked, Dan realized where the opportunities were, the ponds that not everyone was fishing in, so to speak. Because his business was already premised on finding high demand items, importing and putting a logo on them, Dan realized that he could do the same with PPE, but just skip the logo.” In just a few weeks, Oas got his hands on millions of masks, face shields and sanitizer, doubling his average bookings in just a matter of weeks.
Third: Act with a specific plan
Yet, just because a CEO has spoken with key relationships and has the core competencies to make a pivot, that doesn’t mean they’re ready to make a move. A CEO should not act without having a specific and detailed plan in place.
“That’s a pitfall that people would make in business ordinarily. It’s made quite a bit,” Larkins said. “Timing is of the essence, of course, but you should still follow the same discipline of putting together a sound plan.”
A plan helped Kerry Siggins pivot successfully. She’s the CEO of StoneAge Tools, a company that engineers and manufactures automated water blasting equipment. After reaching out to her key relationships and falling back on core competencies, StoneAge Tools was able to shift their sales strategy in a way that matched how their customers were budgeting expenses.
As the COVID crisis hit, the first thing Siggins’ customers did was freeze their CapEx budgets. Such a decision would normally stop an industrial equipment manufacturer in its tracks. Undeterred, Kerry shifted inventory to a newly created “rental fleet,” allowing her customers to get their hands on critically needed machinery to sanitize their work environments, and securing steady revenue for StoneAge Tools. By listening to her key relationships, Siggins was similarly able to direct her engineering team to modify this equipment quickly, to carry COVID-killing disinfectants and detergents.
“Kerry did an outstanding job guiding StoneAge through this crisis, on the strength of her leadership and commitment to her primary responsibilities as a CEO,” according to Larkins. “Gaining those market insights, having the courage to make quick decisions about previously established sales strategy, and encouraging her engineering team to pivot quickly combined to put StoneAge in an advantageous position that all companies would covet.”
For her part, Kerry credits the support of CEO Coaching International in impelling her to make these and other key decisions. “There’s no doubt that I wouldn’t be where I am today without investing in myself and my team through executive coaching. Chris Larkins has helped me tremendously, both personally and professionally. Through my disciplined scorecard and the creation of weekly micro-achievements, he has helped me remain laser-focused, and build an exceptional executive team that has been able to thrive, pivot, and set ourselves up for new opportunities in these trying times.”
The COVID-19 pandemic has proven to be a difficult time for companies across the country and around the world, and CEOs have been put to the test. But crises like this one can also be seen as an opportunity to try something new.
However, a CEO should not rush into making a big change. First, they should reach out to their key relationships. Then, their ideas should stay true to their company’s core competencies. Finally, they should act with a specific plan while making their pivot.
The steps laid out here are not a cure-all for a CEO considering changes to their company both internally and externally. However, these steps can help CEOs structure their approach to making a pivot during this time of tremendous uncertainty. That way, they can focus on what’s important: how to “Make Big Happen.”
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 500 CEOs and entrepreneurs in more than 25 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 66.4% during their time as a client, more than five times the national average. For more information, please visit: https://www.ceocoachinginternational.com
The post Three Steps CEOs Should Follow When Considering a Pivot During a Crisis appeared first on CEO Coaching International.