Zac was asked by Frances Cook, NZ Herald journalist and host of the Pivot Pod, to join her on a podcast to talk about the state of business and what SMEs can be doing proactively to negate the effects of Covid on their business. You can listen to the podcast (for free with our special link) HERE or read the full transcript below.
Frances Cook, NZ Herald: Welcome to the Pivot Pod, where we’ll figure out together where to next for small business. The rate of change right now is frankly scary for some of us, but there is a type of freedom that comes with moments like this as well. When you’re forced to try new things and adapt, you also bring in the possibility of striking gold in a way you never expected. So how do you hone your efforts and embrace change in the right ways so that your efforts are most likely to bear fruit? Well, I’m joined now by business coach Zac de Silva from Business Changing. Zac, you’ve certainly spent a lot of time your time helping local businesses trying to figure out what’s next. In the last few weeks, what would you say are the biggest dangers for small business in the new post Covid environment?
Zac de Silva: There’s a few dangers. I think one of the biggest ones is listening to all the doom and gloom, because even in challenging times there is still opportunity. Let’s say the economy does contract by, let’s say 15%, and let’s say that that affects your industry… Well arguably there’s still 85% of your industry there, it just means that you actually need to take more market share. So I don’t think it’s all doom and gloom. You actually do have power to do things. I think another danger is being like a possum in the headlights when actually there are a lot of things that you can control.
I remember talking with David Downs who – you might be aware – had terminal lymphoma cancer about three years ago. David said the way that he got through it was by making a list of the things that he could control and the things that he couldn’t control and he just worked on the things that he could control. So I think in business during this time, identify what you actually can control and make sure you make some progress on those things.
I think another danger would be making decisions based on emotions rather than metrics. And what I mean by that is, as humans when we’re up against the wall and if we haven’t had time to think about things, we can make a split second decision and sometimes it’s not the right one. So during these times of potential danger, companies and businesses should be creating several scenarios around, let’s say, these sales levels and I’d suggest predetermining what steps and what hard decisions you actually need to make at each scenario. Pre-plan, take the emotion out and actually base your decisions on metrics.
I think another potential danger or weakness would be not being ready to take advantage of there being potentially less competitors in your industry. Some businesses are not going to survive the next several months or the next couple of years so whilst your market might be smaller than pre Covid times, there’s going to be some great opportunity for you to actually pick up new customers because some of your current competitors aren’t going to survive. To make the most of that, you’re going to need to have a really good practice plan of how you can actually be the first port of call for potential customers who have to choose a new company to deal with. Make sure that you’re top of mind for these potential customers.
I think another danger we need to face is making sure that you’re not actually forgetting about your current customers, in amongst the distractions of everything else going on. It’s critical that you think of your current customers and ensure that they keep doing business with you. Think on, how can you make your customer’s life just that little bit better? How can you add more value to them proactively? Think about things like how you can better service them and delight them, which actually doesn’t need to cost money. There’s a lot of things you can do for free that will make your current customers love you more and stick with you.
Lastly, we’ve all enjoyed some of the cultural and behavioral shifts that we had to make in business over lockdown. When I say we’ve all enjoyed, I’m probably exaggerating, but a lot of people have enjoyed things like remote working and more flexibility but I think it’s going to be a danger that we get back into our old ways of working and we lose that work/life balance, the flexibility and the fact that, “hey, I actually was pretty productive at home!”. So make sure you actually take the cultural and behavioral shifts that were good over the lockdown and make sure you bring them to life in your business going forward. Why? It’s all going to help engagement and when your staff are engaged, you know you’re going to have happier customers and your profits are going to be higher. It’s a proven fact that an engaged person is about 2.5 times more profitable than someone who’s not engaged.
In short, I guess, the biggest danger is that you actually allow this crisis to go to waste. It’s an opportunity to do things that you may have previously said were impossible.
Frances: Your points about looking after the people — both in terms of your staff and in terms of current customers welcoming in new customers — it strikes me that it really comes down to focusing on looking after the people involved in this. I (possibly potentially foolishly) bought some jewelry online. I’m supposed to be on budget lockdown currently, but I just wanted it and it was nice and it was a local New Zealand company and it was pretty and it made me smile. So I bought it online and when it arrived, they actually gift wrapped it and put in a little note saying, “Hi Frances, thank you so much for supporting us in this difficult time. Here’s 20% off the next time and thank you for sticking with local”. And I genuinely wasn’t expecting that. I thought it was really sweet and it genuinely prompted an emotional response to me and made me remember that there were real people, real New Zealanders, behind the brand. It’s exactly what you’re saying about delighting and looking after your customer. It wouldn’t have taken them much time. It wouldn’t have taken much money at all. But it genuinely made me feel an emotional connection to that company and I think that’s going to be surely quite important going forwards.
Zac: That’s a great example. And now you’re going to tell all your friends that you’re delighted. It’s a good test to apply to your business: would you be happy receiving your service or goods at the level that you deliver it? I think there’s nothing you can do more important than delighting your customers. Consider that you only have to go about 2% over what a customer expects to actually blow them away — and remember that most companies don’t even hit a hundred percent level of work, so that’s what you’re competing against. The question is, what is the additional 2% that you and your company can do, which will actually blow your customers away? I’m a strong believer in doing the 2%.
Frances: I love that. Yes, 2% over what’s expected can mean all the world to your customer. Okay. So when people are looking at their situation, the business leaders are trying to take stock and you’re trying to figure out what should keep in your business plan and what you should change, how do you figure that out in this constant ever-changing situation we find ourselves in?
Zac: The biggest thing is if you want to make a decision, all decisions actually need to be made with your current and your future customers in mind. And I think that kind of relates to the word pivot as well. So if I had to make decisions about what I keep, what I don’t keep, what I change and that sort of thing, I’d be considering what the new normal looks like for my customers. I would also be considering how my market’s actually changed and how you can adapt to your customer’s new needs. I think there’s going to be things that you need to move faster on to better adapt to your customer’s needs as well. So the closer you can get to your customers for this feedback, the better. Like a great example is Don Braid, the CEO of Mainfreight. He spends 35% of his time with customers or actually at the coalface. The reason he does that is to for two reasons: one is to find out how Mainfreight is actually going with, like, its customer service delivery or whatever, but also, when he gets close to his customers, he actually finds out what they’re going through, where they’re heading. This helps you to make decisions on where you need to pivot.
I’d also be focusing on, even today, anything you can do that will make your current and your future customers happier. That’s gotta be a good thing.
I think you need to have a really good look at what you focus on, that were planned pre-Covid. What projects were you doing that in reality don’t really have a lot of future? You’ve got to be super focused with what you put your time and energy into. It’s a great time to take stock of, Hey, what were those things we were doing pre Covid that actually might’ve taken up tons of our time, but the reality is they don’t actually have much of a future? So stop doing those.
I think in terms of working out what to change or you know what to focus on, you need to be very aware about where make your most profit. What I mean by that is, you know, you have certain products, certain customers in your business that are more profitable than others. You need to be putting your time into those sort of things. And certainly any loss-making customers or loss-making products that you’re not getting a decent ROI on, you need to stop doing those as well.
Speaking of time, something you need to really ponder is that time is actually your most valuable resources, your most limited resource, so as a business leader thinking about what to change going forward, what do you put in time into traditionally that actually is not giving you a good ROI? Write a “stop doing” list. Let’s be selfish. Let’s say I challenge everyone listening to somehow find another three or four hours a week of time and I don’t want you to work an extra three or four hours. I want you to actually identify how you can get four more hours back of your time. The way to do that is to do a stop-doing list then to obviously outsource or delegate some stuff. Free up the time so you can spend time doing the things that matter — that’ll be massive as well.
Speaking of freeing up time, one of the benefits, arguably, of working from home the last couple weeks through lockdown was that your team had a bit more time arguably to contemplate their navel. What I mean by that is I believe that everybody in your business, no matter what position, should have a bit of time to actually think about what’s going well — with their job or in the business — and what’s not going well, what can they improve. If you want to identify the best changes you can make in your business going forward, I think you actually need to give your top staff official time to just think about things. Think of things like, Hey, how can I make improvements? What questions do I need to answer? How can I answer them? How can you get your team to have that time so they can identify the right change?
So my summary would be if the changes you’re making are going to gain you market share or they’re going to, let’s say, take market positioning away from your competitors; if the change is actually going to change what people say about you and your market segment, that will help you to differentiate yourself; if the change will actually make you not just a competitor in your industry but a top competitor, then they are super worth doing. So I think as I say, keep the customer in mind with the changes you have to make and make sure you are focusing on the most profitable products and customers that you have, then you’re coming out of this in as good a position as you can.
Frances: I really think your point about the navel gazing time is such an important one. I always refer to that for myself as percolation time, but same thing. Right? The State-allowed walks during lockdown, I thought, were perfect for this and I actually really enjoyed my walks from home. I’m still trying to go for a walk in the evenings because you can’t force your brain to get creative — it just does its own thing. You can’t sit down and be like, all right, I’m ready to think of solutions! But if you take that time to just be for a moment and walk around your neighborhood, your brain will be busily doing its little thing in the background and working through issues. And sometimes you will have a problem present itself that you hadn’t even realized was an issue, or a solution that will present itself to a problem that you have been really trying to work on. It’s that downtime, that percolation time, that navel-gazing time, that allows your brain to do what it does best, without you getting in the way…
Zac: That’s very true. If you think about it, when could was the last time you had a good idea in the office? Pretty much never. All your great ideas come either in the shower, driving your car, going for a walk or run, at the gym or whatever you might do. So I’m a huge believer that companies should actually mandate that staff take — I’m gonna make this up — say, 20 minutes a day to leave the office, go for a walk and think about your job and think about your business. You’re not going for a walk to ring your mum or your dad or your mate or go on Facebook. You’re actually going to think about what’s going good, what’s not going good, what changes can I make? And I think the productivity efficiency and the great ideas that will come out of it would be massive, but you have to get out and about to get the good ideas. As you say, you can’t just command yourself, “Hey, at 10 25, I’ll sit at my desk and have five good ideas!” It doesn’t really work that way.
Frances: So you’ve mentioned a few things for business to focus on. You’ve talked about the focus on allowing your staff to focus on how they can be most productive. And you’ve talked about delighting your customers and really focusing on what works for you and ditching anything that doesn’t. What are the other top things that you think business owners should focus on right now?
Zac: Right now? I would say there’s a bunch of things. I guess the biggest one is how do you actually turn Covid into an opportunity? And ask yourself, are you moving fast enough? Are you adaptable enough? I think that’s really, really key.
Some other things, I mean obviously there’s a massive digital pivot at the moment. So I think you need to make sure that you are bringing digital even more into your business. And some businesses might think, well, digital has no part in my business. And I’d say, well, I don’t necessarily agree. I think digital has a part to play in every business. I’d have a big think on that.
I’d also be personally critiquing my own performance on how you think you’ve actually managed as a leader the last several weeks in these Covid times. Meaning there’s going to be some really good learnings that you can actually take going forward. Ask your key reports to give you honest feedback and make sure that you actually have a think about what you’ve done good, what you haven’t done so well, and what you can learn to take forward.
I think it’s really important going forward to continue communicating very, very regularly and more than we did in the olden days (olden days meaning pre Covid). You know, during Covid many companies have been having daily checks and meeting more regularly than normal. Keep up the communication, even if it’s an email from the boss or the owner or whatever. Keep communicating — people need to be communicated with.
I also think you really want to make sure that you’re happy that your team know exactly what their priorities are over the next month for the next 90 days. So don’t just let people turn up to work and just, you know, do their normal day job. I think you should give everyone in your business a special little project or contemplate their own special little projects and make sure that they actually do those sort of things.
I think it’s really critical going forward, as I mentioned earlier, as a business owner or a senior manager, to figure out how you can free up your time. Because you need to make sure that what you’re putting your time into is worth a lot of money. So get rid of the crap on Monday; the stuff you shouldn’t be doing, that someone else should be doing because they’re better at it than you. You want to free up the time so you’re actually there to make the most of Covid opportunities.
Certainly going forward, you want to make sure that you’re constantly updating your cashflow. You know, cashflow is arguably the biggest stress inside business you can have. Make sure you’re updating it a lot and if it’s not looking so pretty, do something about it.
As I touched on earlier, make sure you really look at your key customers, okay? And as we said, what can you do to add value to them? That’s really key.
The other big thing is the sales pipeline. I appreciate that some businesses have done no sales over the last several weeks and I get all that. But I think sales ability is going to be hugely impactful and important going forward so make sure you have very good sales ability in your business and you’re doing everything you proactively can to actually make your sales pipeline build.
I did mention earlier about creating those kinds of scenarios where you have a predetermined, I guess you’d say list of triggers, when you should actually make some decisions and do some stuff, so make sure you the key identify those.
Something else I think you need to do over the next few months: I’m a big believer in the way to be more successful is to be asked the right questions in the first place and obviously come up with a good answer that’s very plausible and relevant but often we don’t take the time to actually write down all of the hard questions that ultimately we need to answer in our business. So I think one of the highest priority things you should do is create a list of all the hard questions you wish you could actually answer — you’re not trying to answer them, you just try brainstorm a whole list of questions. So I’d be doing that and then obviously give yourself a timeframe to answer them.
Just a couple of other things: the first one is look after yourself. You know, it’s been a pretty challenging time the last few weeks and as a senior leader or senior person or business owner, whatever you are, I’d actually suggest that given what you’ve been through, stress levels for most people have definitely been higher than normal. Perhaps the highest I’ve had in business ever. Book yourself one or two chill days, take a few days off, have a long weekend — you actually need to recharge your batteries cause if you’re not looking after your own stress and your own health, your business going to struggle as well.
But I think if I was to say one thing summary, it’s that going forward you just need to be the best you can be as a company and if you can be the best that you can be then it’s highly likely you’re going to survive this thing, if not actually come out flourishing. Critique in your business. Where are you currently good and where are you currently great, where are you currently average? Try and get everything you can to be great, which is effectively world-class. And if you can be the best at pretty much everything, or at least the important things, you’re going to stand out against your competitors and your team are going to be focused on doing the most important things, then I think you’re going to flourish going forward. That’s my super summary I’d say, Frances, or what I’d be doing going forward as a business owner or a senior business person.
Frances: Yeah. And I really agree with what you say about this actually can be an opportunity. I mean, I don’t want to underestimate how this is for people, I’m sure a lot of people will be feeling the pressure right now, but genuinely I believe there are opportunities because it forces you to adapt, right? And you could stumble across something new that is huge for your business and businesses always have to change, to be honest. There’s always some level of change happening. And one of the bits of analysis that I thought was really interesting about this is that Covid has accelerated a lot of changes that were happening anyway. Things like the digital adoption have just been supercharged. But by really, really increasing the speed of change, obviously that does increase the pressure, but within that you could find something new for your business that is actually better than what you had before. Surely.
Zac: I definitely think so. I think, you know, the starting point is go back to what trends were actually happening pre Covid times because the reality is, probably 98% of those trends are still going to carry on. But I think, you know, as you said, everything is now sped up. So I think your business in five years’ time is highly likely is going to look quite different to how it looked a while ago. And obviously it looks different already, but what I’d be saying is, have a think about if you could click your fingers, how would your business look in a creative way? And when I say five years, for you it could be three years — and then identify what potential changes you need to consider to get to this dream space. You know, imagine if your business won Lotto — how does winning business Lotto look in three or five years’ time and then work backwards.
But I think you know, your speed is actually essential at the moment. A lot of businesses I work with, we’re working on, let’s call them 90-day sprints. Initially it was like a 24-hour sprint a few weeks ago. Then it became like a 7-day sprint, then maybe 30 days. But quite soon we’ll be able to work to maybe 90-days sprints and if you can do as much as possible in the next, say, 90 days, that’s going to give you the best chance of being uber successful in three or five years’ time. You could probably sit back and pat yourself on the back because if you can do that, there’s also a high chance that you’ll actually survive in the short term as well.
So I think pace is important. But as I said, I agree with you Frances — I think a lot of good things can actually come out of this. There’s some terrible hardships. Some obviously terrible tragedies as well, but you know, it’s up to you as a business owner and a senior person to have as much resilience and perseverance as you can.
And the ultimate summary is you just need to make sure that every single day you are doing the right things — the most important things — in the right order. For example, say there are a hundred things that you could actually do to be more successful as a business and you prioritize them. If you’re a normal human being, because we’re humans, we do what we want. You probably start with doing number 13, then number 38, then number 97 — no wonder you’re not as successful as you could be. You need to do number one, two, three, four, five. So I think the most critical thing you can do in the short term, if not forever, is just make sure you’re doing the right things in the right order and man, your future will be great.
You look at, you know, Apple, Steve Jobs, you look at Jeff Bezos, Amazon, why are they successful from a business perspective? Well, it’s because the leaders of the business obviously know the right things to do in the right order. So I think that’s how you can really stand out: have the discipline to do your one, two, three, four, five and, man, your business and your personal performance will be great.
Frances: Yeah. And we’re pretty much out of time — we’re definitely over time. But I’m loving this chat. I think that you’ve got so much good stuff for people. So I’m just kind of throwing the timeline out the window here, but as quick as we can… I think a lot of us have been so focused on survival through lockdown, that we’ve been focused on the day to day, and that’s totally fair enough. That is people trying to just get through an unprecedented time. But I think as we’re moving out of lockdown and even around the world, people are starting to say “what’s next” and try to start to look forwards a bit. So where do you think we might go in the next 90 days or even the next year, if that’s not looking out too far in times of such change? What do you think people should be looking for and thinking about?
Zac: I think the biggest thing that you need to consider as a business owner or senior leader is that if your business was not a particularly good business before Covid times, then you’re going to have some real challenges because at the moment you might be sitting pretty because you’ve got, you know, government wage subsidies or maybe you can borrow some money from the IRD or your bank — there’s all these different schemes that are around at the moment; let’s call them handouts. But these handouts are only going to go so far. So I think, going forward, if your business was not particularly good going into Covid, you have some really big decisions to make because it’s a proven reality that yes, our economy in New Zealand and the rest of the world is going to shrink. Is it going to shrink by 15% who knows but if you do nothing different, you are going to probably decline a bit in sales, okay? The only way to stay the same at sales is to do things differently and to be a better business, to be more proactive.
As I say, the biggest challenge is, if you weren’t strong going into this, you’re going to have to make some really big decisions and unluckily — and I’m all in to saving jobs and it’s all great that we’re handing out money; that’s what we have to do — but my only downside of that is that it does actually extend the decision-making process that some businesses might have had to have made earlier in terms of are they actually a viable business in the first place.
So I think the government subsidies are great, but if you need to make some hard decisions, you do need to face reality. Hopefully, most businesses were heading into Covid in a positive light because they were actually quite good businesses. I think there’s some great opportunities, but all you need to do is in a shrinking market, which is what’s going to happen, you just have to be super proactive. You have to do the right things, you have to have your team engaged. A case of bringing your team along for the ride. You can’t do it alone. You need your team to be a bunch of many Mini-Mes. You know, you need to have great culture. You need to have strong written core values that are alive and having people living them and doing business by them, so your businesses going forward in the right manner and your customers are happy as well. So yeah, I probably rabbited on too long, but that’s probably the summary.
Frances: No, not at all. I’ve honestly, we’re going to have to get you back for another episode because I could keep talking for hours. Thank you so much. That’s business coach Zac de Silva from Business Changing, and you can send to any other questions that you’d like addressed in the future or any other things that are just on your mind at the moment. We want to make sure the paper part is responding to your small business questions. Send me your questions. We’ll get them on a future podcast episode. You can also subscribe to the Pivot Pod, which pretty much everywhere. Until next time, have a great day.