By Brian Klingbeil, Chief Strategy Officer, Ensono
The competition for attention in modern media has caused words like “unprecedented” and “historic” to lose some of their impact. But every once in a while, a period arises that warrants such hyperbole. In the last two years, businesses have faced a crisis the world has not seen in the modern era. The COVID-19 pandemic shattered millions of people’s lives and shut down large parts of the global economy. Unprecedented and historic, indeed.
The disruption this crisis triggered was immediate, universal and profound. Old ways of doing things were rendered useless almost overnight. New ways had to be found just as quickly. As usual, humans displayed an uncanny ability to adapt to their situation. Even late adopters of technology began engaging digitally for commerce, communication and entertainment. Digital transformation took off to an unprecedented degree in the pandemic, with cloud computing helping firms to rapidly scale up their technology programs. Sometimes this “uncanny ability to adapt” showed the dark side of human nature with opportunistic security challenges emerging.
Not all companies made it through that initial tsunami of disruption. But many that did survive and even thrive were able to do so by being agile and adapting to the changing circumstances. The pandemic has faded somewhat from view, but new challenges have arrived in its wake to threaten businesses: Geopolitical conflict, economic instability, the threat of recession. We’re not out of the woods yet, and chances are there will be yet another forest waiting just beyond the next clearing.
The prospect of yet more crises and disruption can be a daunting thought, even to a veteran CEO. But it can also be an exhilarating one. It all depends on how you, your leadership and your business choose to respond.
The sprawling talent crisis brought on by the pandemic often referred to as the Great Resignation has posed significant and ongoing challenges to businesses worldwide. As demand has soared, companies have consistently struggled to fill the job roles to meet their needs. The problem is particularly acute in the tech sector. In the U.S. alone, there are approximately 3.9 million unfilled IT roles.1 Meanwhile in March, a record 4.5 million U.S. workers quit the labor force.
Explanations for this trend vary. Some point to burnout during the pandemic, others highlight a search for higher pay or a search for more meaningful employment or simply people opting for early retirement with new priorities. Tackling the problem is clearly front of mind for executives— a recent Fortune-Deloitte survey2 found 73 percent of CEOs saw a labor/skills shortage as the most likely external issue to disrupt their business in the next 12 months. This aligns with the findings of a recent Forrester Total Economic Impact™ (TEI) report (see infographic), in which 74 percent of interviewed executives said they are planning measures to counter the talent and cost impacts of the Great Resignation.
One such measure should be to differentiate your organization from the competitors your ideal candidates are looking at. If people are sitting in companies that cannot or will not embrace change and new ways of working, take this opportunity to offer something better (see our related article, “The ESG edge: An essential key to thriving in the Great Resignation”).
At the same time, the market pressures currently at play will inevitably force many companies to scrutinize and reprioritize expenditures, including headcount. And crises aside, the rise of the shorter-tenured employee is a trend that’s here to stay. The blunt truth is, you will not save everyone in this environment. Seize this moment as an opportunity to concede and accommodate this fact by coupling your focus on attracting and retaining the highest-impact talent with a reduction in your dependence on tribal knowledge. This means enhanced processes, and rapid and robust training and education programs.
1 Lucas Mearian and Galen Gruman, “How many jobs are available in technology?” Computerworld.com, July 2022. 2 Sam Allen, “The good news about the Great Resignation,” Fortune.com, November 2021.
Looking back to previous crises, we can learn valuable lessons from companies that failed to adapt to the challenge. In the 1918 Spanish Flu crisis, businesses were ravaged by disruption as the pandemic swept the globe, killing an estimated 40 million people. Sharp falls in economic activity led to, in most countries, around a 6 percent fall in real GDP per capita.
Adapting to a changed environment can be difficult, especially for companies that have had great success doing things one particular way. Blockbuster Video is a prime example. By all rights, they should have become Netflix, but their established business model meant that an overwhelming majority of their time, attention and investment dollars were absorbed by that established model— the classic “Innovator’s Dilemma.” Their crisis happened slowly, making the call to action less obvious. A rapid crisis like the one we experienced in 2020 can be useful.
Finding and nurturing the seeds of opportunity Einstein saw nestled in the corners of crisis requires a cool head and a willingness to rethink norms. Breaking habits or routines is hard and uncomfortable. It takes both courage and conviction.
To start, don’t worry about perfection. You don’t need to be perfect to succeed—you need to drive change and do it faster than your competition. In this new world, speed matters more than ever. It is imperative that organizations embrace the fact that failing fast is not just an ideal, it is essential for success. The next steps businesses take must be guided by innovation.
Companies that thrive in times of mass disruption do not use it as a moment to throttle back. Instead, they double down on their foundational vision, scan the new landscape for revealed opportunities that align with that vision, and retool their strategy and execution accordingly. Here are three to reflect on:
#1) Amazon – The powerhouse retailer has located and leveraged the inherent opportunities in multiple disruptions: In the dot-com bust, the 2008 financial crash and Great Recession, and now again during the COVID-19 pandemic. Amazon survived the first crisis with their skillful CEO at the time, Jeff Bezos, raising enough money right before the market crashed to give the company a cushion to ride out the early 2000s.
But, interestingly, what made—and keeps— Amazon successful was invented after the dot-com bust and revolves around relentless innovation and automation. For example, Bezos has tried to nurture innovation within Amazon by breaking the company into “two-pizza teams”—teams small enough to feed with two pizzas—that operated autonomously and were held accountable for their results. Another key insight, that crystallized only after the dot-com bust, was the idea that Amazon could be a platform to support other businesses. Amazon Marketplace, Amazon’s platform for third parties to sell used books (and, later, lots of other stuff), launched in November 2000. Amazon debuted Amazon Prime in 2005, and later opened its two-day shipping technology to some third-party sellers. Amazon Web Services, which allow third parties to build websites using Amazon’s own infrastructure, didn’t launch until 2006.
Fast-forward to 2020 and the lockdowns of the COVID-19 pandemic. Everyone was stuck inside their homes, and Amazon was better positioned than just about anyone on the planet to serve them there. Orders skyrocketed, which fueled Amazon to start offering even faster same-day shipping and using robot “drives”—droid-like devices that lift “pods” full of items to speed up picking time in the warehouses to a per-worker average of 360 items an hour—one every 6.7 seconds.
#2) LendInvest – Born from the financial crash of 2008, LendInvest is a UK technology platform set up to connect customers with short-term property financing. In the new world order of finance post-2008, LendInvest zoned in on its core mission to “make property finance simple.” It did not attempt to compete in too many areas and with industry incumbents that had the advantage of scale, but instead steadily moved the dial with a transparent, tech-driven financial solution for customers. The results speak for themselves—it broke through the £500 million funding milestone in 2016.
#3) Mailchimp – This now-eponymous marketing platform had humble beginnings way back in 2001. After a steady first few years, the company’s big moment arrived in the heart of the 2008 Great Recession, when Mailchimp managed to grow its customer base from 85,000 to 450,000 in the space of a year. How? It recognized the needs of the customer in challenging economic times and shifted from a retainer-based approach to a freemium model. It stuck to its core mission but stayed innovative, growing the business at a time of crisis and laying the foundations for long-term success. In the words of Mailchimp CEO Ben Chestnut, a crisis is not “time to kind of sit on your front porch and sip mint juleps, you know. It’s time to build your business strong, build the roots strong.”1
Charting a way forward through a crisis is not straightforward for any organization. Leaders need to be clear-eyed and meet the moment head on. They need to crystallize their vision and build a company committed to making it a reality. This is a key moment to overcome “impostor syndrome.” You have this job for a reason; you’re here for moments like these. Have conviction in your call for change, and you will rally others to the cause.
1 Peter Griffin, “Mailchimp founder on weathering a crisis and the power of freemium” UmbrellarConnect.com, September 2021.
What is critical to understand is that, fundamentally, what got you here will not get you to where you need to go. Alongside new strategies for sourcing and keeping the best talent, and new ways of delivering on your vision, you need to tap into new technologies to make it all come together. No company should be under any illusion: You are a tech company, even if you’re not a “tech” company. Success in this digital economy relies on doubling down on AI, hyperautomation, and high-performance compute. The cloud has opened the door for many firms to access these capabilities to an extent not possible even five years ago (see our related article “Is your organization ready for hyperautomation?”).
If none of this sits in your company’s zone of genius, that’s okay. You don’t have to go it alone. Partnering with an ally to support this journey can be particularly impactful to deliver better business outcomes. Of the executives interviewed in the Forrester TEI report who currently work with an MSP, 95 percent agreed that the partnership enabled their business to focus on higher value initiatives, and 83 percent agreed that the resulting enhancements to technology and tech services improved employee retention.
The COVID-19 pandemic, the Great Resignation it ignited, and the various crises that followed have set enormous changes in motion. Businesses, and those of us who lead them, have no choice but to respond, and have two options for doing so. As my colleague Scott Grossman calls out (see our related article “The “Great Realization”: Differentiate...or else”), we can apply the old rules to a game that has changed completely and risk going the way of horse-and-buggy operators and VHS vendors, or, we can rise to the moment and view it as Einstein would—through the lens of opportunity that will reveal paths to growth, transformation, and success that have never before been possible and are there for the taking.\\
