It’s strange isn't it?
As soon as the economy gets tough or the world goes into crisis, people seem to have a logic lobotomy!
They justify their sudden change in logic by saying they are going into survival mode; that the decisions they are making are prudent or expedient; that by taking these actions they are being responsible and they will mitigate any external impact on their strategy or on their ability to deliver this year’s budget.
And they may be right. But the chances are that these decisions are made more as a knee jerk reaction to drive an immediate change in fortunes. A quick fix to stem the flow of bad news, rather than a balanced decision that will help they remain true to their strategy but deal also with the here and now.
They forget the rigour they used in determining their original strategy- a rigor that seemed appropriate when times were better and when there was less revenue or margin pressure. So they make quick decisions with far reaching strategic impact and usually based on little data or no facts.
The immediate action – to them the logical action - is to cut back. They cancel travel, they cancel new hires, they cut costs where they can and they drastically reduce their budget and projections for the next financial years. “These are interesting times” becomes almost a mantra – often greeted with knowing smiles and delivering a false sense of bonhomie – a phrase that allows everyone to feel a common degree of enduring the same hardships, whilst still trying to put a positive spin on things.
There is no doubt that no action is more dangerous than some action but I would argue the wrong action is even more dangerous than both of these. Of course budgets have to be rebalanced, costs revisited. If there is less coming in then logically there needs to be less going out - it is the mathematics of the simple balance sheet and is not to be ignored.
But – and here is the difference – those companies that win in the long term (i.e. beyond the crisis) will be those companies that make these decisions in line with their strategy rather than at the expense of it.
Nowhere is this more true than for the web or eCommerce where the high levels of capital investment in platforms and software often means that those projects are an early target for the corporate scythe. The perception of the web as a cheap channel to market is, I would contend, outdated. Long gone are the days of low cost simple websites that anyone with a few spare hours or a little bit of enthusiasm to put up and maintain.
Today’s we all expect more – sites that are fast, highly intuitive and easy to use – sites that remember who we are and what we like. But the sheer volume of the content, that ability to allow the user to customise or personalize their experience and our ability to recognise them, to cross–sell to them or allow them to contribute is just the tip of the iceberg. Below the water line lies the large, complex world of Software, middleware, integration suites and servers. And of course a technical price tag to match.
So is there an easy solution to dichotomy? Should we forget our long terms plans and deal with the Here and now or should we follow this long-term strategy and hope that our near term issue will not worsen?
Well of course there is no short answer to this because it will depend on a whole host of factors, conditions and circumstances unique to your company, your strategy and your appetite for risk. What is clear though is that people make decisions and people tend to be emotional rather than rational under pressure. And if we recognize that then we can ensure that we make measured decisions that if they must be a compromise or a risk are done so consciously and in full sight of its long-term potential impact.
But there are a number of factors that will make a real difference and that can help.
The first is the need for strong leadership and for that leadership to encourage everyone to validate every decision and to determine whether it will accelerate or impact the existing strategy. Under pressure people tend to look for strong leadership, to be told what to do, almost to absolve themselves from direct accountability for fixing the problem, because of course if they had their way they would do it differently, wouldn’t they? So one of the actions must be to empower the individuals to make the decision, but also to hold them accountable for the decisions that they make.
Secondly if you have a clearly articulated strategy that everyone can understand it will greatly increase the likelihood of making a decision in the right context. If you cannot recite your strategy in 4 or 5 sentences then the chances are that is too complex, and people will be confused about how the decision they make will support or weaken it. SO if in doubt, seek clarity around the strategy or the key priorities that the business must deliver, and check whether the change you are proposing supports this or not.
Thirdly we mustn’t forget that we are in business to make money, so all our decisions must pass through a sound commercial filter. For eCommerce we are probably going to judge the outcome in increased customer visits, higher conversion or higher average order values. Are we really sure that this decision will be game changing. Will it really deliver the commercial benefit both immediately and long term or have we got the correct balance between strategic and tactical benefits.
And fourthly we often fall into the trap that the next piece of functionality will be a silver bullet and its immediate introduction will be the very thing that can stimulate web sales in the short term and avert the impact of the economic crisis. The assumption often is that they would be better off just introducing that functionality rather than sticking to the strategy. Right?
Wrong.
Often there is an impatience to introduce the latest widget, gadget or tool because some customer research suggests that it is needed. Yet often the critical building blocks of that careful articulated strategy are ignored. In a world when technology and opportunity is changing so fast and where everybody is a web expert - at least in terms of being a web customer - it is tempting to "keep up with the Joneses" - To introduce the latest trend or idea to show that your strategy is more advanced than the competition.
But this logic is often flawed. Very few large corporations have the luxury of a truly stable or up to date flexible technical platform or the deep pockets that allow them to constantly re-engineer their processes or architecture to fully exploit that latest and greatest idea.
Most of us sit in businesses where IT budgets are seen as too large, where development always seems to cost more or take longer. Very few focus on getting the green fees right at every stage of evolution - scalable eCommerce platforms that they are able to exploit the opportunity that web services provides, - and delaying yet again the thorny issue of that legacy system or the complex bespoke integration with other systems.
The logic lobotomy hits and we throw out long term thoroughly research plans or projects in favour of tactical short term solutions that make everyone feel better that they are taking action, but usually without clear deliverables or measurable objectives. Often these get half implemented and then the next set of short term measures are introduced
The idea of a strategy - whether eCommerce or another function - is that it is plots what success will look like over a mid to long term vision and usually contains a number of key streams of work - usually inter-related - with some key objectives and milestones to help track progress.
Of course, we need tactical plans. But when everything is tough like it is now, the time taken to quickly review your strategy and to make sure any new plans are aligned with this will save you thousands or millions of dollars/pounds.
More than that. The chances are if you hold your nerve, whilst others are panicking, then you will emerge stronger and in a far better position to exploit the new opportunities and your competitors weaknesses.
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