As scary and disruptive as the COVID-19 pandemic has been, it's not without its silver linings. As business consultants, we tend to focus on those positives that involve businesses.
For instance, while many state governments tried to differentiate between "essential" and "non-essential" businesses, many American business owners focused on finding ways they could continue providing their goods and/or services without endangering the public or their own employees.
For example, restaurants moved to offer socially distanced outside seating and curbside pick-up or "to go" orders, while grocery stores and other retail businesses limited the number of customers allowed in their stores at one time. Best Buy set up sales counters outside its front doors, so customers could pick up orders they'd purchased online quickly and safely.
How did these businesses adapt to an unexpected business disruption so quickly and effectively? They had a clear business strategy.
Simple answer, yet it's an approach that many independent advisory firm owners can learn from; it also can make it easier for advisory firms to adapt and respond to current and future disruptions.
Advisory businesses thriving during these disruptive times are clear about their business strategy. While a Google search will result in myriad of conflicting definitions of that term, we simply tell our clients it is: "The working plan that carries out your vision."
That may sound simplistic, but it really doesn't have to be complicated. Think about it — what do the physical Best Buy stores do? They sell electronics for those who can't wait for them to be delivered by mail.
When the pandemic hit, it was a no-brainer for Best Buy to keep selling electronics to those who didn't want to wait for their Amazon deliveries, and it moved these sales curbside.
Local restaurants may be an even better example. Those thriving today are clear about their business strategy. They make great food — usually of a certain kind — and they provide a nice place for people to eat it.
When the physical restaurants were ordered to close, many restaurant owners fell back on their central business strategy and asked themselves, "How do we continue to make great food and get it to customers?" The answer was selling it curbside and delivering it.
Why You Need Clarity, Too
Having a clear business strategy is essential for you as an advisory owner, particularly during disruptions such as the present one. When we look at a firm, we can tell right away whether its owner knows what its strategy is (or not) — and it's particularly evident these days.
Diving deeper, we view a business strategy is a framework that guides your decisions, such as how you allocate time and resources.
Growing a business confronts you with a series of choices, and having a clear business strategy can help you make those choices — particularly those that compete and/or conflict with each other. The larger a firm is, the greater the importance of a strategy to help it allocate resources, since there's more to lose.
For instance, consider how you intend to grow your firm. You likely want more clients. Do you grow through organic growth (growing from within) or inorganic growth (growing through acquisitions)?
Fast organic growth requires generating high levels of client referrals, while inorganic growth typically takes generating leads of business owners.
Each focus takes leadership, managerial time and firm resources. Where are you going to apply those resources, and at what level? You need to decide which strategy fits best with your business vision.
At the other end of the spectrum, firms and owners without clear strategies tend to lose focus fast and often lose more focus in disruptive environments. They might start new projects on a whim and then lose interest in them when success doesn't come fast enough, prompting them to move on and try something else.
