How to tackle the pandemic crisis
This article appeared in March 2020, in Romanian, in BIZ magazine
The current crisis is advancing at a hallucinatory pace. I am writing this article on March 23, and yesterday I finished examining the projects of MBA students from the Maastricht School of Management, projects in which they had to solve a real problem in their businesses.
Most of them carried out the assignment in the first week of March (02-08) and it is shocking how problems like employee turnover or renting some spaces seem to me, after only two weeks, from another world. This article will appear in a few days and I think that the world then will also be fundamentally different from today’s world.
The speed with which things change around also makes our minds more flexible. We accept the change more easily, because we have no other choice. Rusty business models which were moving slowly, with effort, are now hit by the market blockage and suddenly reveal their weaknesses, forcing us to get rid of the “that’s fine too” attitude. One way that seems wrong to me is to plan everything for an “U” evolution, in which we temporarily change the approach, thinking that in X months things will get back to normal.
I believe that the business environment will be fundamentally changed after the immediate crisis is over. Ok, but how can we adjust a business plan created in normal times to the current situation? In a discussion with Sergiu Neguț, I received a good advice: we don’t adjust the old one, we make a new one.
Sergiu advises us to think that we just took over the business from someone else, we lack a business plan and we need to build one from scratch, a plan which is sustainable in the coming difficult period. This approach can not only make us think more pragmatically and radically, but it can reveal ways to optimize the business we would never have thought of.
Let’s assume we’re in that moment. We have the old plan in front of us, we realize that it is science fiction, so we open a new Excel page and we take it from scratch. Given these times, I believe it’s perilous to think about the new strategy with an exclusive focus on disaster prevention.
In a famous paper (1997), the Psychology professor E. T. Higgins from Columbia University explains how people can adopt in their actions a prevention focus (focused on safety, avoiding negative results and fulfilling obligations) or a promotion focus (focused on growth, ambition and achieving the desired goals). Higgins’ theory, the regulatory focus theory, generated many subsequent studies that showed the connection between motivational focus and effectiveness, innovation, risk inclination, well-being and so on.
Two important conclusions of this research should be mentioned here: first, the motivational focus (promotion / prevention) also works on groups (team, board) and organization. The second conclusion is that this type of attitude isn’t a characteristic of a person, group, company or even project, but it can be changed if wanted. In the bestseller Decisive, the authors Chip and Dan Heath make an analysis of several researches on regulatory focus and conclude that the best way is somewhere in the middle, in which we combine, alternatively or simultaneously, the preventive attitude with the one focused on growth.
In our case, with the crisis in full swing, the old plan inoperable, and the new Excel pending, I believe it’s dangerous to adopt an exclusively preventive focus and to only think about keeping the company alive by cutting costs and optimizing cash flow.
Obviously, after we’ve taken the most pragmatic measures to avoid the catastrophe, I think that we should deliberately allocate some time for reflection on how we can generate some growth in the next period, no matter how small – maybe by approaching clients in a different way, maybe by accelerating a secondary activity that better matches the current situation or even by starting a new project.
If you are in a meeting where you notice that the overall focus is on prevention, take the discussion to a constructive area through a well-placed question or a change of tone. Even if you don’t immediately identify potential ways for growth, the simple discussion of this possibility will boost everyone’s motivation.
Radu Atanasiu teaches Critical Thinking and Decision-Making for Business at Maastricht School of Management Romania and The Entrepreneurship Academy. He is a business angel and founded the volunteering platform DeBunavoie.ro.