• Avoiding the 5 D's of Decline
• How Covid-19 created 'Generation Novel'
• New customer loyalty habits in pandemic
• Small business optimism starting to rebound
• Flexible work: key to employee retention now
• Craft a headline that generates intrigue
• Increase your odds of getting a signed contract
• Timing makes a difference when sales prospecting
• Get high quality leads from YouTube videos
• Is your store communicating the info customers want?
• When you can't avoid a layoff
• Much more...
Avoiding the 5 D’s of Decline
Business decline is never inevitable, but there are predictable
dynamics that must be identified early.
by Steve McKee
IS 2020 A BUMP in the road or the beginning of the end? That’s not a trick
question. For some companies, the virus and lockdown have been inconvenient
and annoying, but navigable. For others, they have been devastating. And the
social unrest has troubled us all.
For nearly two decades, my firm
has been studying corporate decline and renewal. Why do some companies
survive and even thrive during tough times while others go under? Is it
entirely due to external circumstances and environmental considerations?
What roles do marketplace dynamics and corporate culture play? How (and how
much) does leadership affect the outcome? Is any of it preventable? Is there
a proven way back from the brink?
The answers, as you might imagine,
are complicated; every situation is different and every company unique. But
there are certain predictable dynamics we see at play in almost every case
of corporate decline — sometimes mild and, at other times, acute. And there
are also a handful of principles that, if followed, can greatly increase an
organization’s chances of survival, regardless of the circumstances it
Companies get derailed for a host of reasons but tend to
follow a predictable trajectory:
1. Disruption. Most
organizations operate reasonably well most of the time, until they are
disrupted by an external event. It could be a widespread interruption such
as a recession or a pandemic, or a localized disturbance such as a new
competitor, a technological advancement or an industry regulation that gums
up the works. Something knocks them off their game, and that’s when the
2. Distraction. People within the organization
respond differently to the disruption based on their unique backgrounds,
personalities and life experiences. Some step into the crisis; others step
back. Some see it as an opportunity; others view it as a threat. Some are
emboldened; others are frightened. Changing circumstances brought about by
the disruption create new frustrations and preoccupations, resulting in a
loss of focus and lack of productivity, at both the corporate and personal
3. Division. The disruption and its effects become a
log in everyone’s eye around which it is increasingly difficult to see. It
affects how, where and when they do their jobs, and often has an impact on
whether they’ll even have a job and be able to pay their rent or mortgage.
They fear the future. They turn inward. Communication begins to break down
and differences of opinion that were once considered minor and handled
diplomatically now become more divisive.
Healthy external perspective gives way to unhealthy internal friction.
Frustration turns into suspicion. Gossip buds and then blooms. Trust breaks
down. Blame games begin. Factions form. An “us versus them” mentality
develops. Power struggles emerge. Left unchecked and with circumstances
unresolved, what once was a collaborative environment can degenerate into
“Lord of the Flies” conditions.
5. Destruction. Without
intervention, the outcome is destruction. It doesn’t matter how noble the
mission or smart your strategy if your people are misaligned — or worse,
openly antagonistic toward leadership or one another. It’s even more
problematic if the aggression is passive, like playing whack-a-mole with an
Rarely do the five D’s of decline unfold as
quickly as you just read them; they typically materialize over a period of
months or years. But rarely does anybody see them coming, either, making
their ill effects even more likely. And as you may have experienced (or may
be experiencing), they can easily become all-consuming.
of Covid-19’s disastrous effects on business, and with limited openings
happening only in fits and starts, even companies with the healthiest
cultures are under extreme stress.
But note the thread that runs
through it all: culture. Peter Drucker’s famous admonition that “culture
eats strategy for breakfast” is palpable in moments of significant
disruption, when an unhealthy culture can become so ravished it not only
wipes the plate clean but bites the hand that feeds it.
the clue to overcoming the five D’s: If culture is the thread, agency is the
needle that determines where the stitch should go. Leaders have agency; all
human beings do — not only hands that do the work but heads that reason and
hearts with an awesome capacity for empathy.
People who are paying
attention and willing to step into a disruptive moment with courage and
humility can prevent or prevail over destructive internal dynamics,
regardless of their formal position in the organization. Distraction can be
overcome through determination. Division can be defanged with discussion.
Demonization can be disarmed by goodwill.
You have agency. I have
agency. We all have agency. We can stand by and watch as our companies
devolve into chaos, or step in and hold them together. It’s our choice. And
since a company is a microcosm of the broader culture in which it operates,
the question also applies to society at large during this difficult time: Is
what we’re experiencing as a nation a period of unrest or a permanent
The answer is up to us. Decline is never inevitable.
How Covid-19 created ‘Generation Novel’
Meet Generation Novel (Gen N), a growing cross-generational psychographic of
digital-first consumers galvanized by Covid-19. This emergent customer
segment isn’t just digital-centric, it’s also emotionally charged, as
pandemic-fueled fear, anxiety and worry take their toll.
consists of existing digitally savvy customers, but also includes consumers
who had been slow or unmotivated to adopt digital in all facets of life
before Covid-19. McKinsey & Company estimates that Covid-19 served as a
great accelerant, advancing 10 years of U.S. e-commerce growth in just 90
This sudden disruption has been an advantage for some
businesses. McKinsey discovered that 75% of U.S. consumers have tried
different stores, websites or brands during this crisis. Of those consumers,
60% reported that they expect to integrate new brands and stores in their
post-pandemic lives. In other words, new consumer sentiment, behaviors,
habits and values are not only forming, but are also likely to stick.
Is your business adapting? Carefully observe and experience the existing
journey and each touchpoint (physical and digital) through the lens of Gen
From there, explore opportunities to add new value to customer
experiences, at every step, that align with and enhance customer
progression. Take this opportunity to reimagine the customer experience for
a digital-first consumer.
If your type of business limits your
ability to provide a digital experience, explore other ways to provide
convenience and safety for customers. For example, can you provide
contactless shopping and engagement?.
Source: Fastcompany.com, Sept. 8, 2020
New customer loyalty habits in pandemic
While discounts, free samples and offers continue to be the main drivers of
loyalty programs, consumer perspectives on preferred ways to earn rewards
have shifted slightly as a result of Covid-19, according to Merkle’s annual
Loyalty Barometer Report.
Earning points to spend on rewards
continues to be the most appealing benefit, but consumers currently have an
increased desire for programs that provide clear financial savings, such as
getting a $10 reward when they spend $100, and consistent discounts, such as
“get a new reward every Tuesday.” The top dissatisfaction with loyalty
programs is the time it takes to earn a reward.
About 59% of
consumers say that the best way a brand can interact with them is through
surprise offers and gifts.
Baby Boomers are most interested in
writing online reviews, taking surveys or attending an event. They are less
likely to engage in social media or download an app. Millennials and Gen Z
enjoy competition and achievement. Thirty-five percent want badges as a
feature, and 27% want leaderboards as a feature. Gen Z prefers
community-focused program aspects — 22% want access to a community of
like-minded people and 19% want to compete against other members.
Source: Mediapost.com, Sept. 23, 2020
Small business optimism starting to rebound
The NFIB Small Business Optimism Index increased 1.4 points in August to
100.2, slightly above the survey’s historical average. Owners report
improvement in the small business economy, as job openings and plans to hire
are increasing. However, owners continue to manage their expectations of the
future economic conditions as the pandemic is expected to continue.
seasonally adjusted net 21% of owners plan to create new jobs, up 3 points.
The percent of owners thinking it’s a good time to expand increased 1 point
to 12%. Thirty-three percent of respondents reported job openings they could
not fill in the current period, up 3 points from July’s number.
negative 15% of all owners reported higher nominal sales in the past three
months, up 13 points from July. The net percent of owners expecting higher
real sales volumes fell 2 points to a net 3% of owners.
Just 3% of
owners reported that their borrowing needs were not fully satisfied, while
31% reported all credit needs met (down 4 points) and 53% said they were not
interested in a loan (up 2 points).
Source: Bankingjournal.aba.com, Sept. 8, 2020
Flexible work: key to employee
As a result of the pandemic, flexible work has gone “from being a ‘nice to
have’ to an absolute necessity,” according to a survey by FlexJobs.
Forty-eight percent of respondents with flexible work options rate their
work-life balance as very good or excellent, compared to 36% of workers
without flex work options who say the same. Many studies have pointed to the
value of remote work arrangements, both now and in the post-pandemic world.
Remote work enables worker autonomy, an important driver of employee
satisfaction, according to recent research. Employees with flexible work
arrangements are much more likely (57% versus 37%) to be able to change the
stressful things about their work. While you may be concerned about the
productivity of your people working remotely, various studies have shown
that employees feel they are equally or more productive while working from
Flexible work arrangements can be a lifeline for working
parents struggling to juggle childcare and work responsibilities during the
pandemic. In fact, 40% of working parents have had to change their
employment situation by either voluntarily reducing their hours (25%) or
quitting entirely (15%). Working parents say having a flexible schedule
(58%) would have the greatest impact on their ability to balance career,
distance learning and childcare, according to FlexJobs.
(66%) of all respondents in the survey said they would prefer to work
remotely full-time after the pandemic is over, while 33% favored a blended
approach. Less than 2% want to be in the office full-time.
Source: HRdive.com, Sept. 4, 2020; HRexecutive.com, Sept. 18, 2020
Craft a headline that generates intrigue by highlighting the prospect’s
dilemma. A dilemma seeks to reconcile two seemingly incompatible elements.
If the opposing forces are giving potential customers headaches, they can’t
help but go on to see how you solve the contradiction. Some examples:
“Become a household name while preserving a haven of privacy”; “Parents: Yes
you can have disciplined kids who regard you as their greatest friend”; and
“Are competitors gaining market share through social media yet you don’t
have time to master it?”
Increase your odds of getting a signed contract by asking the “expected
results” question, suggests business author Steve Slaunwhite. Ask, “What
exactly do you need this project to accomplish?” The more you position your
services around the wanted results, the more likely you are to get the job.
Be sure to restate their answer within your project proposal. The great
thing about this tactic is that it uses the client’s own thinking to
persuade them that the investment is worthwhile.
Timing makes a difference when sales
prospecting. Send introduction emails during morning hours when recipients
check mailboxes and are generally looking forward to something new. As for
sales calls, the best time slots to call are 11 a.m. to noon and 4 to 5 p.m.
on Wednesdays and Thursdays. On Mondays and Tuesdays your prospects are
usually warming up for the new week, so there will be some friction in your
conversation. Also, avoid trying to book an appointment on Friday when
prospects are mentally preparing for their weekend.
Get high quality leads from your YouTube videos. If
you’re only asking viewers to subscribe to your channel or visit your
website, you could be missing out on a lead-building opportunity. The key is
to add a solid call-to-action where you can capture contact information.
Examples include linking to a quiz (make it about the video), follow-up
webinar or live event, newsletter or collecting questions for a YouTube Live
Q&A. You can also have viewers sign up for a giveaway or complimentary
samples of you products. Put your call-to-action in the video description
and be sure to mention it multiple times in your video in case viewers miss
it the first time.
store communicating the information that customers want? According to new
research by Selligent, 70% of customers want the ability to know product
availability before purchasing online or in store, 76% want clearly
communicated safety protocols and 64% want mobile and contactless pickup or
check-in options. Also, reliance on phone customer support as a first point
of contact has become less important this year, underscoring the importance
of customer service availability across channels, including email, website
chat, social and SMS/text.
Can’t avoid a
layoff? Great leaders let people go in the same way they lead: with
compassion, according to award-winning business author Deb Boelkes. Be sure
to follow the “golden rule,” imagining how you would want to be treated. Be
honest and transparent — tell them what you know as soon as you know it. Get
the bad news out up front. Spell out exactly how you arrived at the
decision, respecting them enough to share your strategy and how the company
will move forward. Assure them that being laid off isn’t their fault and
that you care. Spell out their unique strengths and help them brainstorm
their next step, making yourself an ally as they begin envisioning their
Source: Heartfelt Leadership: How to Capture the Top Spot and
Keep Soaring (Business World Rising, 2020)
Use the “three-minute
rule” to serve your customers better. You can learn a great deal about
customers by understanding the broader context in which they use your
product or service. To do this, ask what your customer is doing three
minutes immediately before and three minutes after he uses your product or
service. For example, leaders of a company that provides investment analysts
with financial earnings data discovered, after applying the three-minute
rule, that a large number of analysts were painstakingly importing the data
into Excel and reformatting it. This observation led them to develop a more
seamless Excel plug-in feature with enhanced formatting capability —
resulting in an immediate and significant uplift in sales.
Employees will appreciate this affordable
perk. More employers are offering free or discounted income-tax preparation
as an employee benefit. Strike a deal with a local accountant to handle the
returns. Most will offer a discount to win your guaranteed work.
Face masks can impede good customer interactions
because both parties have half of their face covered up. But you can still
make customers feel welcome with these tips from Richard Delany, president
of Old Edwards Inn and Spa in Highlands, N.C. First, make eye contact
immediately and speak to the customer as soon as possible in an upbeat tone.
Despite wearing a mask, smile! The bigger the smile the more it can be seen
in the eyes. Consider having each employee wear an ID tag that includes a
photo of them smiling (this was a big hit at Richard’s business). Wear masks
that match the look or messaging of your business. Vet what masks employees
wear, for example, stay away from the big, black Darth Vader-looking masks —
they’re not very welcoming.
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