Episode 1,000: Why now is the time to double down, with Stephen Woessner
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Good Morning Onward Nation \\u2014 I\\u2019m Stephen Woessner, CEO of Predictive ROI and your host.
Welcome back, and today\\u2019s episode is going to be a solocast \\u2014 it will be just you and me exploring a topic with some real depth.
If you\\u2019re new to Onward Nation \\u2014 I tend to record a solocast every 5 to 6-weeks to share some insights, perhaps some research, or examples I gathered from hanging out and talking with agency owners, business coaches, and strategic consultants just like you.
Or sometimes \\u2014 I\\u2019ll pull some data points and results from the most recent experiments we\\u2019ve been running inside the Predictive ROI Lab so you can take and apply the new strategies or tactics to fill your sales pipeline with right-fit prospects.
Okay \\u2014 let\\u2019s shift our attention to today\\u2019s topic. I titled this episode \\u201cNow Is The Time to Double Down\\u201d for several specific reasons. Almost exactly to the day \\u2014 one year ago \\u2014 I shared with you a distillation of over 400 pages of research around how business owners marketed their way through a recession like what we were facing back in March 2020\\u2026and candidly\\u2026are still facing right now in April 2021.
But \\u2014 the data I shared with you then wasn\\u2019t focused on the survival of business owners of just the last recession but the last six recessions.
If you listened to\\xa0Episode 933\\xa0\\u2014 you and I would have walked through all of that data\\u2026and more specifically\\u2026how the owners doubled down and made progressive decisions so they could navigate their business through the choppy waters and be in the exact right position to come roaring out the other side of their respective recession.
The last 13-months have certainly taught us many lessons about navigating ourselves through a crisis \\u2014 painful lessons personally \\u2014 and of course \\u2014 inside our businesses.
We learned what it feels like to hurt \\u2014 and to hurt in a big way \\u2014 to hurt as family, as friends, as a country \\u2014 to just hurt and to not feel like there was anywhere to turn.
What it means to truly have grit.
What it means to be compassionate and to take a stand for what we know is right.
What it feels like when we can\\u2019t hug a loved one when they need it most.
What it means to look into the eyes of your team and tell them everything\\u2019s going to be okay \\u2014 when you know behind the curtain \\u2014 you\\u2019re struggling to keep your head above water.
In 2020 \\u2014 we learned so many valuable lessons. And my hope is that through all of the mess that the year was \\u2014 and the challenges that still linger today \\u2014 that you also saw some silver linings.
That you took the most overused word of 2020 \\u2014 which was most likely \\u201cpivot\\u201d \\u2014 and you put it to good use.
That you reinvented.
That you asked your clients, prospects, and audience how you could be even more helpful \\u2014 and you stepped up \\u2014 and showed your teammates what leadership is all about.
That you jumped into the trenches \\u2014 back to back \\u2014 and you dug, slung, and moved the same mud as your team. And that you were open, you were honest, and you let them see you cry when you needed to cry.
We all had those moments. You didn\\u2019t \\u2014 and you don\\u2019t have to have all the answers \\u2014 because you\\u2019re human.
So for this solocast\\u2026we\\u2019re going to take a step back. I\\u2019m going to walk you through a small slice of the data from 12-months ago for a couple of reasons.
One \\u2014 I want you to see how far you have come\\u2026how you moved along that path\\u2026to reflect on the decisions you made\\u2026and the result outcomes. And yes \\u2014 nothing is ever perfect\\u2026but you\\u2019re still here. And there\\u2019s victory in that.
Two \\u2014 we\\u2019re going to celebrate a few businesses and their owners who really crushed it. And I don\\u2019t mean necessarily from a revenue perspective\\u2026but I mean from the perspective of being the beacon of hope when we needed them to be.
Being there every time their clients or customers had a question \\u2014 and oftentimes a difficult one \\u2014 there they were \\u2014 being helpful.
Let\\u2019s celebrate that because in good times \\u2014 or in bad, like a global pandemic \\u2014 it\\u2019s a great recipe for us to follow.
And three \\u2014 as we see the economy recovering \\u2014 and we see momentum beginning to come back \\u2014 what are some things you could be doing right now to fill your sales pipeline with right-fit prospects?
I\\u2019ll share some insights that you can take and apply.
So you see? Now\\u2019s the time to double down.
Now\\u2019s the time to push even harder. Now\\u2019s the time to say to your team\\u2026\\u201cWe\\u2019re going to plant our flag of authority in this niche so that during the next crisis \\u2014 we will have even further future-proofed our business.\\u201d
Now. Right now. Now\\u2019s the time to double down.
Okay\\u2026deep breath.
I have one more thing to share with you before we dive in.
And it\\u2019s a really big, super awesome, and very sincere THANK YOU! If I could give you a big hug \\u2014 I would.
Today\\u2019s episode is number 1,000 of Onward Nation. And that doesn\\u2019t happen by accident.
It happens because you and all of our subscribers around the world have shared feedback with us, asked questions, cared enough to point out ways we could be even better, and you shared our episodes with your colleagues, family, and friends. THANK YOU \\u2014 it has been my honor to sit in this seat for the last 6 years and to have the opportunity to share the insights and wisdom from our guests\\u2026with you.
There is also a very long list of family, teammates, mentors, and friends who have made these 1,000 episodes possible.
They were there in the beginning \\u2014 they prodded me along the way \\u2014 they encouraged me when I was down \\u2014 and they held me accountable to get done what I promised to do.
Needless to say \\u2014 I have a lot of phone calls and thank you cards to write because what John Wooden said was so true \\u2014\\xa0\\u201cYou will never outperform your inner circle\\u201d\\xa0\\u2014 and I feel fortunate and blessed to be surrounded by rockstars.
So sincerely, Onward Nation\\u2026THANK YOU!
Okay\\u2026
I built this solocast to act as a beacon around why \\u2014 in my opinion \\u2014 Now\\u2019s The Time to Double Down.
What can we do to rebuild \\u2014 and if we work hard at it \\u2014 could it be possible to come out of this recession in an even better position than when we went in?
I will \\u2014 and will continue to argue \\u2014 yes \\u2014 it is possible.
And that is what drove me to do the research. To look back through past recessions, past recoveries\\u2026to study the winners and the losers\\u2026and to share with you what they did\\u2026so we can all take some lessons out of their playbooks and put them to work right now.
I\\u2019m going to give you the data points and examples to show it\\u2019s possible.
And \\u2014 I\\u2019m going to share the next steps that you and your team can take to make it happen as well as share some free resources.
And all of the research citations that I will quote can be found in the endnotes section of today\\u2019s show notes on PredictiveROI.com.
With all that said \\u2014 let\\u2019s start stepping through why Now\\u2019s The Time to Double Down.
Let\\u2019s start off by reviewing three research studies and articles published in the\\xa0Harvard Business Review. Again all linked within today\\u2019s show notes.
The first article is entitled \\u201cPreparing your business for a post\\u2014pandemic world,\\u201d which was published by HBR on April 10, 2020 and was written by Carsten Lund Pedersen and Thomas Ritter, both professors at the Copenhagen Business School in Denmark.
I pulled golden nuggets out of Pedersen and Ritter\\u2019s work because of their emphasis on planning before and during a crisis \\u2014 and how if your planning process was sound, Onward Nation \\u2014 you will come roaring out the other side of the current recession and future proof your business so you\\u2019ll be even more prepared for the next crisis.
But in order to prep the proper response plan with smart strategic decisions, you must first understand the position your business holds in the market.
You can do that by asking yourself and your team some fundamental questions like, \\u201cwho are we in our market,\\u201d \\u201cwhat role do we play in the market? (Are we price-sensitive suppliers, are we market leaders, do our clients and prospects see us as thought leaders, etc.?).\\u201d And \\u2014 what if we double down make immediate course corrections\\u2026could we emerge as a market leader fueled by developments, new ideas, service offerings, or invest in new markets while the recession is still here \\u2014 so that \\u2014 we come roaring out the other side?[1]
Onward Nation \\u2014 the right plan should not just map out the where but also the how. You need to map out your action steps and milestones for today, next quarter, and for the remainder of the year.
And it\\u2019s been my experience \\u2014 this is where business owners get snagged. In fact \\u2014 I just got home after several days in Chicago attending a live and in-person workshop for agency owners hosted by Drew McLellan, CEO of Agency Management Institute.
Okay \\u2014 quick detour \\u2014 can I just say \\u2014 holy frickin\\u2019 bananas \\u2014 it was so awesome to be live and in-person with other owners. To sit, listen, share ideas\\u2026share a meal\\u2026oh\\u2026my\\u2026word. Amazing.
Alright \\u2014 well \\u2014 one of the exercises during the workshop was the one-year business plan. All it took was a quick show of hands for who actually had a one-page\\u2026or any length\\u2026written business plan. And only a few hands were raised.
Why? Business oftentimes \\u2014 we owners create lofty ideas without any of the tactical detail our teams can challenge, make better, and then implement \\u2014 or worse yet \\u2014 there\\u2019s no plan at all because we rely on winging it. Winging it may work during good economic times \\u2014 but what we learned in 2020 was that winging it falls super short during a crisis.
Like the former heavyweight champion, Mike Tyson famously said,\\xa0\\u201cEveryone has a plan until they get punched in the face.\\u201d\\xa0Your high-level, half-baked plan quickly falls about without the right operationalized strategy.
And that is exactly why when the U.S. Navy SEALS create a mission plan along with 13 contingencies for each mission they execute. Yes \\u2014 13.
The SEALS anticipate that there will be an ebb and flow to the mission plan as the situation evolves and changes with new data points, variables difficult to predict, or sudden changes. They never expect to not encounter changes to the plan.
But if they didn\\u2019t have a plan \\u2013 they wouldn\\u2019t know what gear to take, how much gear, transportation, extraction, and the litany of other things that need to be considered. The mission doesn\\u2019t change but how you accomplish it will most likely need to ebb and flow along the way.
And yet \\u2013 I know many business owners who bristle at the thought of planning because they don\\u2019t want to feel boxed in or the constraint on flexibility. The Seals would tell you that it is because of how they double down on the planning process that they can be more flexible on the battlefield.
Because of their planning \\u2014 they have already anticipated and thought through their options \\u2013 and \\u2013 have everything they need to quickly proceed with a new direction.
Your business can be just as nimble with the right planning.
Yes, COVID has been confusing. It\\u2019s been stressful. And there have been times when working with my leadership team at Predictive over the last 12 months when I felt overwhelmed and just wanted to start doing things to see if anything would stick.
But \\u2014 we didn\\u2019t until we had a plan.
So as we start to see the end of this tunnel we\\u2019ve been in \\u2014 I\\u2019m pushing you to take a step back\\u2026have discipline\\u2026look around\\u2026ask yourself and your team questions\\u2026look at today\\u2026this week\\u2026this month\\u2026and map out\\u2026IN WRITING\\u2026the steps you intend to take quickly for both the short\\u2014term \\u2014 and \\u2014 identify how those steps will set your business up for success in 12-months as it relates to your 3-year mission.
Now \\u2014 another lesson about planning. The plan is no good unless you have shared it \\u2014 taught from it \\u2014 marinated your team in it \\u2014 and then repeated the process over and over again. You need to communicate the details of the plan as well as the process used to create the plan \\u2014 with your entire team.
If you or your leadership team works through the planning process in a vacuum and doesn\\u2019t share highlights, milestones, or progress as the plan is evolving \\u2014 I\\u2019m telling you \\u2014 your team will feel lost\\u2026they won\\u2019t know how to implement it\\u2026you will have lost your opportunity to create buy-in\\u2026and your culture will suffer.
Your team was just as confused, scared, and concerned as you were when COVID first hit. And now \\u2014 many of them\\u2026if not all of them\\u2026are looking forward to the possibilities that await you and your business on the other side of this recession. And you building the plan will help them not only see those possibilities \\u2014 but \\u2014 ensure that they see your vision \\u2014 and \\u2014 they will know how to make it become a reality.
But to be clear \\u2014 I\\u2019m not suggesting that your entire team needs to be involved in the creation of the core plan.
But what I am suggesting is that you take a lesson out of the book, \\u201cExtreme Ownership\\u201d where you and your leadership team create the core plan \\u2014 brief your entire team on the objectives and intent of the plan \\u2014 and then ask junior members of your team to meet and work out the tactical details for implementing the plan.[3]
Your job is to make sure you are clear on the objectives and the intent of the plan. Then set your expectations for the timing for the completion of the plan \\u2014 quickly\\u2026like 24\\u2014 to 48\\u2014hours \\u2014 and have each of the junior team members present their portion of the plan back to you and your leadership team. Then everyone asks questions and in doing so \\u2013 does some stress testing of the plan. It\\u2019s crucial to create space for the plan to evolve but that doesn\\u2019t mean your planning process needs to take weeks. It can be days and you will be off and running.
I assure you \\u2014 your greatest challenge during the planning process will be to prioritize. You need to be careful that you don\\u2019t start numerous projects that all depend on the same critical resources. If you do \\u2014 you will burn out your team and nothing will get done with excellence. Instead \\u2014 take your five, six, or 10 great ideas\\u2026apply pressure to them\\u2026and distill them down to one to two great ideas with clear steps for the next 30-days. And then keep a list of all of the other ideas and come back to it in 30-days and re-evaluate what should be next.
And if you go to today\\u2019s show notes \\u2014 you will be able to download a super helpful calendar from our good friends at Elite Entrepreneurs \\u2014 it will help you visualize each and every meeting you should be having with your team throughout the year so that you can communicate the details of your plan.
Now let\\u2019s shift our attention to the imagination \\u2014 because we need it now more than ever.
Martin Reeves and Jack Fuller, both part of the Boston Consulting Group\\u2019s Henderson Institute, wrote a brilliant article entitled, \\u201cWe Need Imagination Now More Than Ever\\u201d which was published by the Harvard Business Review on April 10, 2020. A link to the full text of the article can be found in the endnotes section of today\\u2019s show notes.
Reeves and Fuller put forth the argument that imagination \\u2014 in the face of uncertainty, economic recession, and the historic challenges we\\u2019re facing right now \\u2014 is exactly what we need to solve the problem. But it is difficult to apply imagination and all of its benefits when we are in full-on crisis management mode.
Why?
Because when something unexpected and significant happens our first instinct is to defend against it. Then we later move to understand and manage whatever caused the crisis so we can get back to the status quo.
The authors believe \\u2013 and I agree \\u2013 \\u201cthat your capacity to imagine\\u2026to create, to evolve, and to pursue ideas \\u2014 is a crucial factor in seizing and creating new opportunities, and finding new paths to growth.\\u201d[4]
But the challenge is \\u2014 and my guess is when I impressed upon you the importance of planning a few minutes ago \\u2014 you may have said to yourself \\u201cStephen\\u2026there\\u2019s no time for planning \\u2013 I need to double down and take action now.\\u201d
Same thing with imagination \\u2014 because of the pressure of COVID\\u2014 it will be one of the hardest things to keep alive in your business \\u2014 both now and into the future.
However \\u2014 imagination \\u2014 rethinking how you can double down in what you deliver to be helpful to your clients and prospects is exactly what can help you come roaring out the other side of this recession.
For example \\u2014 in recessions and downturns, 14 percent of companies outperform both historically and competitively because they invested in new growth areas.
Apple released its first iPod in 2001 \\u2014 the same year the U.S. economy experienced a recession that contributed to a 33 percent drop in Apple\\u2019s total revenue. Still \\u2013 Apple saw the iPod\\u2019s ability to transform its product portfolio so the company increased R&D spending by double digits, which sparked an era of high growth for the company.[5]
But \\u2014 let\\u2019s shine a bright light on some non-Apple companies because sometimes it\\u2019s super easy to discount these types of case studies because most of us don\\u2019t have several hundred billion lying around that we can invest toward R&D.
That said \\u2014 if you were to take a look inside the communities of Agency Management Institute, Elite Entrepreneurs, and Smart Real Estate Coach \\u2014 you could find business owner after business owner who had their best year in history during 2020. I know many business owners who doubled sales, team size, and profit in the last 12-months.
How on Earth is that possible? Were they just lucky \\u2014 in the right place \\u2014 at the right time \\u2014 with the right silver lining?
It would be lovely if it were that simple \\u2014 but no.
They re-imagined the possibilities.
They doubled down on being helpful.
They asked their clients and prospects what they needed?
They shared their insights and wisdom by teaching generously.
And \\u2014 they didn\\u2019t just focus on service delivery. They marketed. They created content. They stepped up in a big way to be a solution. They rolled out new offerings. Retired old offerings. And they made it even easier to do business with them.
They reimagined every aspect of their business, Onward Nation \\u2014 and you can too.
And there\\u2019s still time.
If you can rally your teams \\u2014 create an imaginative plan that everyone buys into because they had a hand in building it \\u2014 you will likely be way ahead of your competitors as we come roaring out of this recession.
Right now \\u2014 because of everything that has happened over the last year \\u2014 you might be the only one serving your niche who is actually thinking about how best to double down on being helpful.
The rest of your industry might be thinking about that next promotional push\\u2026something\\u2026anything in order to get a few dollars in to make Q2 look promising.
But \\u2014 I\\u2019m encouraging you to IMAGINE a completely different path.
A path where you generously share your smarts, your insights, where you teach the best of what you have and how it aligns with the business issues and challenges your clients, prospects, audience face \\u2014 in good times or in crisis. You do all of this while everyone else is simply reacting.
You\\u2019ll be on a completely different level. Why? Because you allowed yourself the time to imagine the blue ocean of possibilities \\u2014 and \\u2014 you worked your butt off to make it happen.
Okay \\u2014 so let\\u2019s dial this in a little further.
How do you do all of that?
Let me help by giving you a push from the authors. Instead of asking yourself and your team passive questions like \\u201cWhat will happen to us during this recession?\\u201d \\u2014 flip the script \\u2014 by asking active, open questions like \\u201cHow can we create new options?\\u201d
Or \\u2014 \\u201cHow can we double down and be even more helpful to our clients and prospects during this crisis?\\u201d
What could we teach?
What research and strategic insights could we share?
What online event, webinar, or forum could we host for our clients, prospects, and audience that would share the best of what we\\u2019ve got to help them navigate what\\u2019s next?
And yes \\u2014 I agree with you \\u2014 there are no easy solutions or silver bullets. This is a ton of work.
My Predictive team and I have wrestled through many options when we were building out our 1-year Strategic Plan. We\\u2019ve worked through everything I\\u2019m recommending to you\\u2026I have seen it in action. So yes \\u2014 it\\u2019s hard \\u2014 the discipline you need in order to essentially force yourself to imagine the possibilities \\u2014 create a plan \\u2014 and see it through \\u2014 will \\u2014 no doubt \\u2014 be challenging.
But \\u2014 all of this work \\u2014 I assure you \\u2014 will help you plant your flag of authority in the niche you serve \\u2014 and \\u2014 you will be of greater service to your clients, prospects, and audience\\u2026and\\u2026when you do this the right way\\u2026and your heart is in the right place\\u2026you will attract an abundance of right-fit prospects into your sales pipeline.
And you will come roaring out the other side of this recession.
Okay \\u2013 the last nugget I want to share with you was a game-changer for me. I have been a student of mindset, attraction theory, and the power of the mastermind for years. I\\u2019m a firm believer in that which we focus on we get more of. Perseverating over negative thoughts produces negative results and I have seen the reverse happen, too. And when blended with a great plan, intentional execution, and hard work \\u2013 the details within the plan become reality.
However \\u2014 what I learned from this article and wanted to share with you is how this actually plays out in the world of statistics, too.
For example \\u2014 \\u201cwhen we lose hope and adopt a passive mindset, we cease to believe that we can meet our ideals or fix our problems. In statistics, what\\u2019s called \\u201cBayesian Learning\\u201d involves taking a belief about a statistical distribution \\u2013 the prior results in other words \\u2013 and then updating it in the light of each new piece of information obtained. Essentially \\u2014 the outcome of the entire process can be determined by the initial belief. Therefore Onward Nation \\u2014 in a very real way \\u2014 pessimism can become a self\\u2014fulfilling prophecy.\\u201d[6]
In the show notes \\u2014 I cite the section of research from the article I just shared with you so you can do a deep dive into the justification for it if you like.
So let\\u2019s go high level for a minute \\u2014 if you focus on being imaginative, being open to the possibilities, giving your team grounds for hope, encouraging them to be innovative\\u2026and all of this is done with the intent of being helpful to your clients and prospects in a way you never have been before\\u2026you will make progress.
Meanwhile \\u2013 your competitors will be bogged down in the myriad of thin things and trapped in a short-term survival mentality that requires them to TAKE from their clients and prospects\\u2026and guess what\\u2026it won\\u2019t work.
There were many silver linings of the last 12-months if we look hard enough \\u2014 and I will tell you that one of the biggest \\u2014 is that we as people are even more attuned to generosity, transparency, truth, and it has become super easy to sniff out a fake.
So \\u2014 imagine yourself generously playing the long game and your clients and prospects will love you for it because they will see you are genuinely playing the game for their benefit.
Trust me when I say that the trench you\\u2019re fighting in every day \\u2013 that trench of pressure, doubt, fear, anxiety, and at times\\u2026overwhelm\\u2026yep, I know that trench well, too. And I\\u2019m right there \\u2014 right here \\u2014 with you\\u2026slugging it out, too\\u2026and working hard.
One thing I\\u2019m grateful for is that because of the last 12 months \\u2014 at Predictive \\u2014 we sharpened our leadership and planning skills. We were forced to quickly build a plan. My fellow leaders and I prioritized\\u2026we mapped out how we could be helpful to our clients and prospects\\u2026and we did all of that from the spirit of imagination.
And then we shared it with our team.
Now \\u2013 taking you behind the curtain in full transparency\\u2026we did all of that in 48\\u2014hours.
This is not a 4\\u20146 week process.
Don\\u2019t get bogged down. Get moving.
Let\\u2019s keep up the momentum of the planning process and begin to think about how you could deal with the myriad of business pressures right now.
Do you continue to look to cut operating costs.
Do you reduce staff?
Do you work to open new markets and invest in R&D, or some other combination of strategies?
And \\u2013 is there an ideal combination or blend of the strategies \\u2013 and if so \\u2013 what have been the result outcomes from other companies as they worked to navigate past crises.
Thankfully \\u2013 there is some excellent research available on all of the above.
With that said \\u2013 it might seem a bit odd that I am going to now turn our attention toward an article / published study in the Harvard Business Review from 2010.
Why would I pull from an article that is 10\\u2014years old?
The article is entitled, \\u201cRoaring Out of Recession\\u201d and was published in HBR on March 3, 2010.
I\\u2019m encouraging you and your team to study it because the data points within the article provide a whole lot of context that will be helpful to what you\\u2019re working on today.
Back in 2010 of course \\u2013 the country was looking for any and all help in pulling itself out of the\\xa0Great Recession\\xa0of 2008 and 2009. But in order to make smart recommendations to their 2010 readers \\u2013 the authors went back and gathered data from the past three global recessions:
- The 1980 crisis (which lasted from 1980 to 1982)
- The 1990 slowdown (1990 to 1991)
- And the 2000 bust (2000 to 2002)
They studied 4,700 public companies, breaking down the data into three periods:
- The three years before a recession
- The three years after
- And the recession years themselves.[8]
It took the researchers over 12-months to complete the research and they focused on publicly traded companies because of the availability and access to data.
Here are some of the strategic insights from the research\\u2026
17 percent of the companies in the study didn\\u2019t survive their respective recession.
About 80 percent of 4,700 companies in the study (3,760 companies) had not yet regained their pre-recession growth rate for sales and profits three years after the recession.
40 percent of the 4,700 companies (1,880 companies) hadn\\u2019t even returned to their prerecession sales and profits levels by the end of the three years post-recession.
For the majority of the companies \\u2013 the financial impact of the recession were long-lasting.
Only 9 percent of companies flourished after a slowdown and did better than they had before and outperformed rivals in their industry.
Interestingly \\u2014 companies that cut costs faster and deeper than their competitors didn\\u2019t flourish.
In fact \\u2013 these were the companies in the study with the LOWEST probability \\u2014 21 percent \\u2014 of pulling ahead of their competition when the economy rebounded.
Counterintuitively \\u2014 the company leaders that decided to double down and boldly invest more than their rivals during a recession also didn\\u2019t fare well.
They only enjoyed a 26 percent chance of becoming leaders after a downturn and then into an economic rebound.
And most surprising to me when I studied the research was learning that 85 percent of growth leaders heading into a recession were toppled because of the crisis.
So if you\\u2019re not currently the leader in your niche \\u2013 then right NOW could absolutely be your perfect opportunity if you lead your team correctly, plant your flag of authority, and be the expert your clients, prospects, and audience need you to be.
The post-recession winners were companies that mastered the art of making progression decisions and balancing cutting costs to survive AND investing to grow tomorrow.
And the proof is in the results with 37 percent of the post-recession winners breaking away from the pack.
\\u201cThe post\\u2014recession winners were the companies that cut costs selectively by focusing on increasing operational efficiency \\u2014 meanwhile \\u2014 they invested relatively comprehensively in the future by spending on marketing, R&D, and new assets.\\xa0This is the best antidote to a recession.\\u201d[9]
The researchers called the segment of companies that had taken this strategic approach, \\u201cProgressive.\\u201d
Okay \\u2014 so let\\u2019s define that a little further.
Progressive companies deploy the optimal combination of defense and offense.
Conversely \\u2014 the \\u201cprevention-focused companies\\u201d in the study were the ones whose leaders quickly implemented policies that reduced operating costs, shrunk discretionary expenditures, eliminated frills, lowered headcount, and preserved cash. They also postponed making new investments in R&D, developing new businesses, or buying assets such as plants and machinery to expand their capacity.
Prevention-focused leaders cut back on almost every item of cost and investment and reduce expenditures significantly more than competitors.
Focusing solely on cost\\u2014cutting causes executives and employees to approach every decision through a loss\\u2014minimizing lens and pessimism permeates the organization.
Prevention-focused companies did exactly what Brett Gilliland, CEO of Elite Entrepreneurs, warned us against back in\\xa0Episode 929\\xa0when he shared the lessons around flee, fight \\u2014 and the most harmful to business owners \\u2014 and that\\u2019s freezing and doing nothing.
Prevention-focused companies were the ones that suffered the most during the recession \\u2013 and \\u2013 took the longest to recover. Or \\u2013 never recovered to their pre-recession levels for sales and profit.
So let\\u2019s flip that \\u2014 is doubling down on promotion the right strategy\\u2026right now?
No \\u2013 it\\u2019s not that simple.
When companies in the study focused purely on promotion \\u2014 essentially having the mindset of we\\u2019re going to advertise our way out of the crisis by just shouting more often that our customers need our stuff \\u2014 it developed a culture of optimism that led companies to deny the gravity of a crisis for a long time.
They ignored early warning signs, such as customer\\u2019s budget cuts, and were steadfast in the belief that as long as they innovate, their sales and profits will continue to rise.
They didn\\u2019t notice that because the pie was shrinking and that they must capture an even larger share from rivals to keep growing. And this typically leads to intense price competition and a zero\\u2014sum game.
No one wins in a race to the bottom.
However \\u2014 progressive companies \\u2014 which is where I\\u2019m urging you to begin thinking, Onward Nation \\u2014 they are the companies that cut costs by improving operational efficiency rather than by slashing the number of employees.
Only 23 percent of progressive companies cut staff \\u2014 whereas 56% of prevention\\u2014focused companies do\\u2014and they lay off fewer people.
And the offensive moves by progressive are even comprehensive.
Progressive companies developed new business opportunities by making significantly greater investments than their rivals in R&D and marketing, and they invested in expanding their capacity.
Progressive companies developed new markets and invested to enlarge their asset bases. They took advantage of depressed prices to buy property, equipment, etc.
All of that combined is why the post-recession growth in sales and earnings by the progressive lead companies was the best among the 4,700 within the study.
Okay \\u2014 let\\u2019s do a quick recap of what we have covered so far.
First \\u2014 by the data \\u2014 you need to have a plan that involves your entire team \\u2013 you cannot afford to wing it through any crisis\\u2026and definitely not this one.
Second \\u2014 you need to find ways to stay open to imagination and let it impact your R&D and how you approach doubling down on being helpful to your clients and prospects.
And third \\u2014 if you want your business to make it through the other side of this crisis\\u2026and potentially\\u2026be in an even better position than when you entered it\\u2026now is the time to be progressive. Yes, reduce your operating expenses to boost efficiency\\u2026keep your team intact the best you can\\u2026and make investments in your marketing and R&D so you can be even more helpful to your clients, prospects, and audience.
Let\\u2019s take the ROI around marketing investments a bit deeper with some data points collected from a study commissioned by the Advertising Specialty Institute (ASI).
\\u201cASI studied 2,662 firms from 1970 \\u2013 1991 to determine the effect of marketing on a company during a recession. Firms that marketed during a recession increased in value and got more marketing bang for their investment. In some cases \\u2013 up to three years after the recession had ended. It seems like common sense \\u2013 if you market when everyone else stops marketing \\u2013 your message is more likely to be noticed due to a less cluttered market and your business is more likely to be remembered once your competitors begin marketing again.\\u201d
In my opinion, Onward Nation \\u2014 this NOW\\u2019S THE TIME for you not to be silent.
You need to be in front of your clients, prospects, and audience \\u2014 and yes \\u2014 that is marketing.
But \\u2014 not pitchy and salesy.
Focus on helping. Drew McLellan and I mapped out a complete blueprint for how to do this \\u2014 and how to do it well \\u2014 in our book, \\u201cSell with Authority.\\u201d And if you want a free paperback copy \\u2014 all you need to do is send me an email at\\xa0stephen@predictiveroi.com\\xa0and I will ship you a copy. No shipping fees \\u2014 nothing. Just let me know you want a copy \\u2014 and we\\u2019ll ship it straight away.
I want you to have a progressive mindset about how to lead your business to the other side of this recession \\u2014 and \\u2014 I want you to be very thoughtful about the content you and your team creates and shares.
This is why I also want to share some highlights from a special report from Edelman because the context here will help guide the context of your content.
You can access a full copy of the\\xa0report from the Edelman website\\xa0using the link at the bottom of today\\u2019s show notes.
Edelman is a global communications firm that partners with businesses and organizations to evolve, promote, and protect their brands and reputations. Edelman employs 6,000 people in more than 60 offices. And they have been studying, researching, reporting on the topic of trust for the last 20\\u2014years. Their report has become the standard for excellence on the topic.
Edelman conducted a 12\\u2014market study on the critical role brands are expected to play during COVID.
They interviewed 12,000 people in Brazil, Canada, China, France, Germany, India, Italy, Japan, South Africa, South Korea, the UK, and the U.S.
I\\u2019m going to walk through a high\\u2014level overview of just a handful of key insights\\u2026
71 percent said if they perceive that a business is putting profit over people, they will lose trust in that business forever.[10]
84 percent said they want advertising to focus on how brands help people cope with pandemic\\u2014related life challenges.[11]
77 percent said they want brands only to speak about products and services in ways that show they are aware of the crisis and the impact on people\\u2019s lives.[12]
And the study showed that there\\u2019s a deep desire for expertise.
84 percent of respondents globally said that they want businesses to be a reliable news source that keeps people informed. They want to receive this information from multiple sources, in part because they are skeptical about any individual medium given the proliferation of fake news.
Taking that further \\u2014 85 percent of respondents want you to be an educator, offering your audience instructional information.
With that said \\u2014 I\\u2019m not suggesting that you play doctor or infectious disease expert.
But what I am recommending is that you pick up the torch and lead the conversations in your niche about the business impact COVID has had \\u2014 and is having \\u2014 on your customers, your vendors, your industry as a whole.
And \\u2014 continue to champion the distribution of resources, research, or anything else you think will be helpful to your community of clients and prospects who are desperately seeking answers.
If you\\u2019re on our email list \\u2013 you likely received updates from me when PPP was first a thing \\u2014 and then the series of resources, calculators, applications, tax resources, etc. that were all made available shortly thereafter.
Our expertise isn\\u2019t in the public health arena \\u2013 but \\u2013 we absolutely believed we could be helpful to business owners within our community by sharing resources we have curated.
And you know what? The response from our community was incredible because we shared the right resources, at the right time, with absolutely no expectation of return.
Helping, Onward Nation. Not selling.
The team at Edelman believes that COVID has \\u2014 and will \\u2014 fundamentally change how we think, behave, and consume.
Business owners that act in the interest of their employees, clients, prospects, and other stakeholders will reinforce their expertise, leadership, and trust and immeasurably strengthen those bonds.
Your community is looking to you to share your thought leadership and expertise \\u2013 and you can\\u2019t do that by shrinking or by being quiet. They want you to demonstrate your authority.
Don\\u2019t be promotional \\u2013 be helpful. Don\\u2019t focus on selling \\u2013 but be solutions-focused.
NOW\\u2019S THE TIME to Double down on sharing your expertise like you never have before.
I assure you\\u2026creating an authority position will deliver a financial return on your investment.
Okay \\u2013 let\\u2019s begin to wrap up and come in for a landing by circling back to some additional framing about what makes someone an authority.
Thought leaders don\\u2019t write content that anyone else could claim. Thought leaders don\\u2019t write about anything and everything. And thought leaders don\\u2019t compete on price. And because of COVID, the data from Edelman, the data from our own\\xa0ROI of Thought Leadership\\xa0study (we\\u2019ll add a link in the show notes so you can download a free copy), and many other relevant sources \\u2014 I will argue \\u2014 that NOW\\u2019S THE TIME TO DOUBLE DOWN and plant your flag of authority.
Churning out generic content to get ahead in Google rankings may have worked 20 years ago \\u2013 but it doesn\\u2019t work today and it\\u2019s not helpful to your audience.
In our book entitled, \\u201cSell with Authority\\u201d, Drew and I shared highlights from the\\xa02019 Trust Barometer\\xa0study from Edelman, a global PR agency, which has conducted the study each year for the last 20\\u2014years. It\\u2019s a worldwide study with 33,000 consumers participating in 27 countries.
One of the biggest takeaways from the study was that buyers assign a high level of trust to people they believe are just like themselves. When you think about the impact that ratings, reviews, and influencers have with their audiences, you begin to see the power of that belief.
But Edelman\\u2019s research isn\\u2019t about the celebrity influencer. This study documents the rise of the common man influencer \\u2013 business owners just like you and me, Onward Nation.
It\\u2019s noteworthy because it gives statistical validity to the idea of real people as influencers and the impact they can have on the beliefs around a brand.
The one attribute that ranked higher than the trust we have in people like you and me is the trust we have in highly educated experts. The only three groups of people we trust more than people like ourselves are company, industry, and academic experts.
Experts are afforded the highest level of confidence and trust\\xa0because they have a depth of knowledge in a specific industry or niche.\\xa0So why in the world wouldn\\u2019t you capitalize on that?
Instead of creating generic content that looks and sounds like everyone else during this crisis \\u2013 take the opportunity to create thought leadership content that is unique, different, and helpful \\u2013 not promotional.
A true authority has something specific to teach us, and they want to be helpful or illuminating.
They\\u2019re eager to share what they know because they have a genuine passion for it, and they don\\u2019t fear giving away the recipe to their secret sauce (or so it\\u2019s perceived).
That confidence and generosity are contagious. Their expertise is something specific groups of people (their sweet\\u2014spot prospects) are hungry to access.
Call them an expert, a thought leader, an authority, a sought\\u2014after pundit, advisor, or specialist. They\\u2019re all words for the same thing\\u2014a trusted resource that has earned that trust by demonstrating and generously sharing the depth of their specialized knowledge over and over again.
Drew and I would argue that a true authority has a strong point\\u2014of\\u2014view or belief that influences how they talk about their subject area. A narrow niche, a strong point\\u2014of\\u2014view, and being findable in multiple places are the hallmarks of an authority position.
And \\u2014 they have a plan for creating content that is helpful to their niche and not focused on selling.
All of the data points to the validity of leveraging your own thought leadership as your core strategy to proactively market your way through the recession and to make it through to the other side in a stronger position than when all of this happened.
You need a plan, with some imagination, some hard work, progressive ideas, and the willingness to invest your time and attention toward execution.
But if you do that \\u2013 and your clients, prospects, and audience can see that you are being helpful\\u2026when they are ready to enter the market again\\u2026you\\u2019ll have put yourself in the best possible position for a new trajectory of growth.
Your competitors aren\\u2019t doing this hard work. And that should be the most compelling reason why NOW\\u2019S THE TIME TO DOUBLE DOWN.
The data is all on your side, Onward Nation.
Okay \\u2013 whew \\u2013 was that a lot?
Holy bananas \\u2013 it sure felt like a lot.
And remember \\u2014 all of the research sources can be found in the endnotes in today\\u2019s show notes on\\xa0PredictiveROI.com.
As always \\u2014 I look forward to your feedback. The emails you send me \\u2014 and your comments on social media \\u2014 all help us get better every day \\u2014 so thank you for that Onward Nation and keep them coming.
Thank you for taking the time to listen to this solocast and to make Episode 1,000 that much more special. I\\u2019m grateful!
And if you need me \\u2014 you can reach me directly at\\xa0Stephen@predictiveroi.com.
That\\u2019s my actual Inbox and I read and reply to every email.
Okay, Onward Nation \\u2014 until our next episode \\u2014 onward with gusto!
____________________________________________________________________________________________________________________
[1] \\u201cPreparing Your Business for a Post\\u2014Pandemic World\\u201d, Carsten Lund Pederson and Thomas Ritter, Harvard Business Review, April 10, 2020.
[2] \\u201cPreparing Your Business for a Post\\u2014Pandemic World\\u201d, Carsten Lund Pederson and Thomas Ritter, Harvard Business Review, April 10, 2020.
[3] \\u201cExtreme Ownership\\u201d, Jocko Willink and Leif Babin, St. Martin\\u2019s Press, 2015.
[4] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[5] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[6] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[7] \\u201cWe Need Imagination Now More Than Ever\\u201d, Martin Reeves and Jack Fuller, Harvard Business Review, April 10, 2020.
[8] \\u201cRoaring Out of Recession\\u201d, Ranjay Gulati, Nitin Nohria, Franz Wohlgezogen, Harvard Business Review, March 3, 2010.
[9] \\u201cRoaring Out of Recession\\u201d, Ranjay Gulati, Nitin Nohria, Franz Wohlgezogen, Harvard Business Review, March 3, 2010.
[10] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
[11] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
[12] \\u201cTrust Barometer Special Report: Brand Trust and the Coronavirus Pandemic\\u201d, Richard Edelman, Edelman Trust Barometer Special Report, March 30, 2020.
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