Don’t waste this crisis
Winston Churchill’s famed quote: “Never waste a good crisis” has been a constant theme at various points in my entrepreneurial journey. Building Rent the Runway, inevitable ups and downs led us to use this phrase as a way to learn, grow, find the silver linings and add perspective in any down moment. The Corona virus has put new emphasis on this phrase, and added new meaning for me as I think about the various ways that business leaders can make the most of this moment.
1. What can you learn from this moment? Did your business have a particular weakness? Is appropriate crisis / contingency planning in place? Can you add suppliers, distribution channels or product categories to prevent future vulnerabilities? In many crisis situations this line of thinking is where most of the work is done — the ‘what could I have done better’ bucket. In the case of Corona this bucket is still meaningful, but less so versus your run-of-the-mill crisis. Take Rent the Runway as an example. We started this business in the peak of a recession and always thought of our concept as ‘recession proof.’ Either consumers are more cost-conscious and apt to consider renting in times of economic downturn, or they have more events in times of an upturn. Win — win. Especially as we broadened beyond special event wear, our conviction that all consumers need to get dressed seemed very resilient. While this unique moment has changed that, what remains true is the essence of our brand — the confidence our product inspires in customers, the close knit community centered around female empowerment, and the ability for a great outfit (or even an outfit change these days!) to make you feel pulled together. Where can we broaden the value that our brand delivers to consumers, diversify supply and distribution and build a lean, adaptable team to flex in these moments? That line of thinking makes sense, as does bolstering your business with a strong balance sheet for ‘rainy’ days like these so that you can weather the storm. That said, the unique, unanticipated and largely indefensible nature of this unique crisis calls us to think deeper.
2. What does this moment give you permission to do? The next type of question we should consider in times of crisis is what business adjustments we can make that let our business be healthier in general. Adjustments that are often hard, like reducing workforce size or changing supplier relationships, are expected in these moments. Right sizing and re-orienting the economics of a business is always important, but times like these accelerate those needs. With cash harder to come by, and top line revenue decreasing for most businesses, taking action on business adjustments that are painful but necessary is the norm. If you take these actions swiftly, you can make progress to keep your business alive and build a stronger path for the long term.
3. Are there alternate paths to reaching your pre-existing goal? What pivots should you consider? Perhaps you have a top-line revenue goal that will be hard or impossible to reach unless you add a business line or adjust your offering. There are typically many ways, to skin a cat and one of the core skill sets I look for in an entrepreneur is the way to decode many paths towards to success — odds are you will need this flexible, optimistic and creative mindset in times of crisis or even normal startup life! A company I advise, Origin, is physical therapy and support around pregnancy, post-partum, and menopause. Their business has relied strongly on physical locations as much of this work is so based on physical guided exercise. While they had always planned to launch telemedicine, increasing their geographic reach and scalability, Corona pushed them to launch sooner and accelerate this part of the business. They have made quick progress in this area and let them brainstorm on what else the business could consider in this moment: Women are going through pregnancies under new circumstances, more eager than ever for guidance, information and advice from the small set of others who has lived through it themselves in this condensed timeframe. What is it like at the hospital? What if I have Corona? Will they test me? Can my baby contract it? Can my spouse stay in the room? Can I leave the hospital sooner than had been the case previously? What’s more, those who have lived through it are eager to share and be helpful, wearing their newfound badge of honor. Consider new opportunities of the current environment and lean into how they enable your brand to connect with consumers to service your broader brand ambition in new ways. Given that there is a built in expectation that most businesses will have an off year, and slip from their core goals, what other learnings or pivots can you explore that your deliverables might have otherwise prevented? Enabling your team to embrace this creative thinking and push them towards and optimistic approach also adds energy and enjoyable work to what is easily a depressing moment for many companies who will likely miss or need to alter goals they have long been working towards. I’d actually argue that the byproduct of work and energy around this thinking is the biggest benefit of pivot thinking.
This line of optimistic thinking can be applied to most every situation. Identify the end goal and map the many paths to get there. While recently hosting Harvard Business School Office Hours, I turned our discussion to a brainstorm asking students about pain points that they had newly experienced in their lives as students so that together consider how to problem solve. One student mentioned their concern missing conferences. Sure, you won’t have in-person conferences for quite a while, but what is the end goal of attending those conferences? Networking? Job offers? What other ways can you go about achieving those goals? Professors and alumni networks are a great alternate resource and one that is likely to be more available and open to helping in this moment in time. Classmates also can’t attend typical conferences so they may have more time to discuss topics at hand virtually. The wealth of information on various digital platforms and time being poured into thought pieces at this moment is greater than ever so just taking time to digest those materials is likely as valuable as much of the content from a conference. With the time and expense saved in traveling to and from, think about what else you can invest in or achieve. Considering the various alternate paths to reach a goal is the essence of entrepreneurship — it’s what leads to great ideas in the first place as we imagine new, more efficient ways of serving a consumer need and competing in an existing market.
4. My favorite aspect of Churchill’s quote is the flip of perspective it encourages — calling people to see the opportunity even in a dire moment. This crisis in particular is a chance to put things in perspective. While the day to day of our business lives may be shaken to a core, the fundamental health concerns that so many around us are dealing with, and the daily reminders of our own safety are poignant reality checks. Visual ques of masks and gloves, constant hand washing and all-consuming health-related news offers constant perspective that makes business woes seem less all-consuming. This is an important reminder in general and one which I often share with other entrepreneurs considering starting families and wondering about the elusive work-life entrepreneurial balance. Reminders not to sweat the small stuff are a key piece of entrepreneurial success and sanity in any moment. We can all benefit from this moment as an extreme reminder of that.
The essence of Churchill’s statement is that our perspective on every situation determines how we will come out of it, the energy leaders will project onto our teams, and the ability for us to move forward with the fast pace of entrepreneurship and an optimistic outlook that will let us make the most of the moment. That is the energy that makes great businesses.
