Business acumen (“Business savvy” and “business sense” are often used as synonyms) is keenness and quickness in understanding and dealing with a “business situation” (risks and opportunities) in a manner that is likely to lead to a good outcome (Wikipedia, 2020).
We all hope our business leaders have some of this today.
How do you survive a business crisis? Best answer: before the crisis. Survival relies upon many things that are already set in stone when a crisis happens:
- Cash position – to both weather the storm and to invest in your response
- Customer/industry diversification – to spread the risk and maximize the opportunity for success
- Best clients & great relationships – who are likely to be successful and engage with you
- Skills & capabilities of the organization (people, process, technology) – to do things quickly, effectively, and efficiently
- Agility and flexibility of the organization – to move to new opportunities and solutions
- Creativity – to identify solutions to new problems with new value propositions
- Contingency planning – “chance favors the prepared mind!”
If you’ve neglected any of the items above, all is not lost. Your task is just more difficult. Now your options include:
- Leveraging the strengths above that you do have to their fullest
- Rightsizing/expense reduction
- “Pivot” your product/service/skills to something that is now in demand
- Quickly finding new customers that have money to spend
- Borrowing money to weather the storm and to invest
PriSim was formed in 1997. We’ve survived Y2K (Dot-com), 9/11, and the Great Recession of 2008. In 2008, I wasn’t concerned much about PriSim’s survival (we had great clients and a “tight” organization). What mystified me in 2008 was the “why” (it was happening). So, I created this Driving Forces Analysis for myself and other interested parties (I model things, so it seemed like a sensible thing to do).
In 2008 we launched our first series of “Business in Crisis” simulations. The idea was simple: take a simulated business – and tank everything (e.g., tsunamis, disappearing markets, disrupted operations) – and see what happens and how the participants respond. It wasn’t pretty to watch, but many of the participant’s companies survived to compete another day. And their secret: apply business acumen in your decision-making and have your company in a strong position for the crisis… before the crisis (see list above).
With Coronavirus 2020 I understand the “why” of the crisis, and I recognize that this one really challenges the survival of many organizations. And my heart and best wishes go out to all that are struggling. On the other side of this crisis, a normal will return and PriSim will see you there. What you need to do – in addition to addressing this crisis – is to commit to transferring what you learn during this crisis onto your next generation of leaders. In addition, you need to vow to always strive to build an organization that has decision-makers with great business acumen, and that is capable of handling whatever the world throws its way – because it will – again.