Top 5 Things CEOs Should Be Focused On 2H 2020
Larry O’Toole discusses the top five things CEOs should be focused on for the second half of 2020.
Angy Chin: Should we actually go through the five points and maybe some of our key questions that might come in. So should we do that?
Pamela Wasley: Why don’t, why don’t we move over into that?
So let me start up. The slides here. Okay. Starting with Larry. Let’s do your list first.
Larry O’Toole: Okay. So my list has five elements. The first one is really the master, recommendation, which is the playbook. And we’ve already talked about that based on some of the questions, the playbooks that I’ve had in my past have three primary chapters.
First chapter is titled Cash is King. Chapter two is titled Leadership is the Ace. And chapter three is Strategy is the Queen. So I’m a big advocate of playbooks. I’ve used them myself during a crisis. My recommendation is as you’re capturing your notes from your learnings from COVID-19 and starting to put your playbook together, or even just your outline of notes for future use, think of it in terms of those three chapters, Cash is King, Leadership is the Ace and Strategy is the Queen. The second thing that I recommend to people is, during a crisis we’re making decisions, which we always do, but we’re making a higher volume of decisions because they’re coming at us more quickly during a crisis.
We have to be thinking these forward by playing the movie forward. So when I was a CEO, I use to say to my team, when we had to make a decision, ‘Hey, let’s pick up the remote control, press fast-forward and play this, the various scenarios of this decision that we’re making pricing decisions – allowing customers to take extended terms, entering new markets.’
Let’s just fast forward this movie and it’ll help us think through the effectiveness of the decisions that we’re making on, not just the near term value or as I call it the net worth of your company, but also the longer term of your company. The other part of playing you’re movie forward is good executives know as much what not to do as they know what to do.
During a crisis, time is precious. We need to be able to quickly play the movie forward on some of the decisions that we’re having to face to determine very quickly triage the magnitude of the decision, because not all decisions are equally weighted in terms of impact on your cashflow or impact on your longer term, or the valuation or worth of your company.
So you always want to be thinking about playing the moving forward on decisions that you’re trying to make so that you can think about a future state and you’re comfortable with what that future state will look like around that position. The next area is to advance your culture.
So during a crisis, you learn wonderful things about your culture. You learn where your culture is outstanding for you, and you learn where your culture is challenged and needs to be addressed. My favorite definition of culture is what are your people doing when no one’s watching. It’s very relevant these days when we might have a larger number of people working different shifts, or we have people working remotely.
So in the chapter of Leadership is Ace, this whole area of culture comes up in the playbook. A few quick recommendations. Number one, don’t assume that your leadership style that worked up through early March is still the right leadership style today. Things have changed. Your meeting cadence is off, you might have people working remotely that used to come into the office before. You better rethink your leadership style to make sure it’s adjusting for the times. That’s starting to set the culture of your business or in your department, advance your culture in terms of, I love the expression, the best sailors are not created during calm seas.
This is a wonderful time to enhance your culture around identifying some key employees saying, ‘you know what? I want to empower them a little bit more. Now I want to throw them in the deeper end. I want to help them, but maybe I can use this crisis to further blossom them in their career’.
So my next recommendation here is to advance the culture of your business during a crisis. My fourth point is your data. There’s the expression of, it was a couple of years ago the Economist magazine had an article and it said data is the new oil. So what does that mean for us going through the crisis?
My recommendation is look at your data. What is it telling you since March, April, and May. Don’t assume that how your company performed through 12/31 or even through January and February of 2020 is the same as what you saw in March, April and May. So my recommendation to business owners is specifically look at the month of March, April, and May and do a data analysis.
See what your customers buying patterns are and see if they’ve changed or see if you’re seeing an opportunity to avoid disruption or be the disruptor. The other thing is leveraging your data. I recommend to people to think about your pricing strategy right now. Is it appropriate in this market? Think about your proposals that are going out the door.
Are they still effective in this crisis? For instance, your value proposition message or your proposals back in January and February, might’ve been – Hey, we are, the low-cost provider. If your proposals are going out the door now saying the same thing your customer may be going, ‘yeah, cost is important, but right now I need that widget and fast is what I need and you’re telling me about price.’
So you want to be making sure that the proposals that are going out the door are effective during this crisis. And one last quick action that the playbook reminders us to take is to revisit lost jobs. If you quoted something late last year, early this year, revisit it because who it was awarded to may not be able to fulfill on it.
And you therefore want to be able to revisit it and show that you’re strong enough to take it. And then last of my five points during a crisis, don’t just think about playing defense, have the mindset of what can I do. Possibly find little nuggets of opportunity to be the disruptor you heard me say earlier, ask new questions that can help you start to do that.
The other thing I recommend to business owners in terms of thinking about competing as a disruptor is right now is the time to be thinking, ‘is your business going to come back like a kitten and purrrr back, or is it going to come back like a lion and it’s going to roar back. If you plan that properly, you can either avoid being disrupted by competitors taking business from you, or you could be the disruptor just because you were better prepared for how your business will come back. So those are my five tips and all of them fall under the book, which reminds you of all these things. When the crisis hits all these reminders come to play.