How To Reinvent Your Business To Thrive After The Coronavirus - Forbes

How To Reinvent Your Business To Thrive After The Coronavirus - Forbes


How To Reinvent Your Business To Thrive After The Coronavirus - Forbes

Posted: 26 Mar 2020 08:32 AM PDT

Business has changed, perhaps forever, due to the coronavirus. Once we emerge from this crisis, business managers can reinvent their product offerings to survive in the post-coronavirus economy in four steps: deconstruction, imagination, testing, and prototyping. At the heart of this method is evidence-based decision-making.

To start, let's admit the obvious disruptions to existing businesses: supply chains are missing a link; company owners have little cash on hand; employees are eager but scared; consumer confidence is low except for staple products and services; and consumer habits haved shifted to online-only channels.

After business managers have made immediate decisions to reduce cash burn, you have a lull during self-isolation to contemplate what the future might hold. Here are the four steps managers should take now to plan for a post-coronavirus economy.

First, reinvention can be subtle. You could keep most of your core operations to deliver most of your core value to customers, and tweak a few pieces of your business. For example, a company making high-definition computer monitors might still see strong demand for its product, but the customer segment may shift from young tech professionals, who might be running low on cash, to retirees who have discovered the joys of video conferencing with distant friends during the crisis. This latter group does not care about nits, refresh rate, resolution, or next-day delivery. Instead, they seek ease of setup, true color, integrated speakers tuned for delivering crisp voices, and payment via installments. While this represents only a slight shift in the product's features, it would require that the company entirely alter its marketing message and channel, adjust its prices and supply chain, and establish different reseller partners. 

In order to consider these shifts, the first step in reinvention is deconstruction: understanding each of the constituent pieces of your business. The tool that most business schools (including mine) use to help managers deconstruct their businesses is called the Business Model Canvas (see explanatory video and this page for a free chapter from its authors). This Canvas contains the nine elements that are common to traditional businesses: customer segment, value proposition, channel, customer relationship, key activities, key resources, key partners, revenues, and costs. If your business does not make anything itself, but instead acts as a platform to connect buyers and sellers, you should use the Platform Model Canvas (see description, video and website), which focuses on the facilitation of the interaction between buyers and sellers in a marketplace.

The second step is to employ your imagination to create a long list of alternatives for each of these elements. Brainstorm with employees and friends. To return to the example of computer monitors, might there also be a sudden need for toddlers to have a screen for physically distant play dates? If so, the screen must survive lots of fingerprints and paint splatters. Or the company might focus on selling screens in pairs for professionals who have migrated during the crisis to multiple monitors. Or the company could relabel its products by profession: the Accountant's Screen, the Gamer's Screen, the Video Conferencing screen, etc. 

At this stage, do not filter or criticize these possibilities. Just make lists. This step requires managers to transition from decision-maker to facilitator in order to solicit ideas from employees and business partners. This can be a difficult transition. One of my colleagues, Megan Reitz, has written persuasively about ways for managers to recognize how they might intimidate people around then, undermining the flow of imaginative ideas.

Unfortunately, many managers leap from brainstorm to launch because they are convinced that one of their ideas has the promise to succeed. This kind of reinvention is based on epiphany, and rarely succeeds. Much of my research shows the subtle, pernicious effects of "confirmation bias", leading managers to make poor decisions. To avoid this trap, the third step in reinventing a product, service, or entire business is to conduct rigorous testing of each one of your ideas independently without spending any money by having conversations directly with customers. This process, you might now realize, parallels the Scientific Method. Testing should occur in three separate phases.

The first phase is an exploration of the problems that the customers anticipate they will face after the virus abates.  The company selling computer monitors could ask 100 random people about their computer habits during self-isolation. If these open-ended discussions reveal that customers in a particular demographic segment do not have a problem, then you should not try to solve it, and instead should shift the core value you intend to provide. 

From these initial conversations, in the second phase of testing you will narrow your list to a handful of options that seem to address real customer problems and re-state each of these as a testable hypothesis that adds some concrete predictions to your guesses. Here is an example for the computer monitor company: if we ask 100 grandparents in the U.S. if they would consider upgrading to a large monitor that would help them see and hear their grandchildren more clearly over video conference, the company would expect that at least 20% would say 'probably' or 'definitely'. The power of this sentence is that it is now ready for analysis with evidence. 

In the third phase of testing, you return to your customers – ideally new contacts – to ask them these simple sentences and track their answers. This will help you collect vital evidence to determine if your assumptions were valid. It generates useful, actionable evidence to improve decisions, and it costs almost no money.

Allow me to give you two notes of caution based on my observation of 2-3 thousand students. First, this advice to seek demand may sound obvious to you. Yet, the majority of entrepreneurs do not heed it. Too many managers would select a single, seemingly attractive options from the brainstorming session and proceed directly to launch without collecting evidence. Second, at least based on my own emotions, your customers are scared right now. They do not know what will happen to the economy, to their business, to their job, to their family, or to their own health if the virus spreads. They are probably not yet accurately predicting their own needs after coronavirus. You might need to delay testing, or focus your conversations on potential customers who seem to be calmly assessing their future based on evidence, perhaps because they have followed this same method.

The final step for reinventing your business is to create simplified versions of your product or service to offer to paying customers. These prototypes might offer your pre-coronavirus product with post-coronavirus marketing and pricing. For example, the company selling computer monitors could advertise a Grandparents version with an installment payment plan to a limit sample of people with targeted ads on Facebook. 

This gradual go-to-market strategy continues your collection of customer evidence at low cost. Because you are delivering a solution that helps customers solve a problem that they have already declared they face, you should encounter a higher-than-normal purchase rate with minimal marketing budget. If the "soft launch" of your prototype met the expectations that you defined in your hypotheses, you can be more confident that a "hard launch", complete with product re-engineering and full marketing support, will be successful. 

In this time of crisis and reinvention, my summary is that evidence matters. Perhaps now more than ever. This not should motivate the way that you seek to improve your business, but also should filter the advice that you consider. The approach that I've outlined above relies on not just own research, but also the rigorous, thoughtful work of others. For further evidence to support an evidence-based approach, I urge you to explore Discovery Driven Planning, pioneered by Rita McGrath; the Lean Startup Method, crisply described by Ash Maurya; and Design Thinking, first articulated by David Kelley.

What all of these approaches share, in addition to emphasis on evidence, is a well-found faith in the power of business ingenuity, especially during periods of crisis, to not just create resilient ventures but also to address and ameliorate real human need. Be well and reinvent.

5 reasons entrepreneurs should consider getting their MBA - AZ Big Media

Posted: 26 Mar 2020 03:35 AM PDT

There has been a lot of controversy around the MBA over the last recent years and how relevant it is. But the truth is that tech companies and Silicon Valley "unicorns" are hiring MBAs in droves today, with companies like Amazon, Google, and Facebook leading the way. As a matter of fact, Amazon is said to be hiring over 1,000 MBAs per year. So, if the MBA is not relevant, the world's largest online retailer clearly didn't get the memo.

The truth is that the MBA is a powerful qualification for anyone who has to direct a team, no matter how big or small it is. It also gives you a holistic foundation and understanding of every aspect of business that only a few can boast about. Let's take a look at a few reasons why all entrepreneurs should consider getting an MBA in 2020.

You'll be Able to Mitigate Risk

Risk is part of any business. However, when you understand risk and how to perform risk analysis, you can also figure out when risks can reap rewards and when risks are unnecessary. You'll be able to build, understand, and follow through with business plans. You'll be able to conduct market analysis to see where markets are going and decide whether you should change directions even if you were already heavily invested in one strategy.

While some entrepreneurs will sometimes rely on their gut feeling, in some cases, only cold hard data can tell the truth. Emotion and passion do play a role in entrepreneurship, but you still need to have a certain degree of professional preparation.

Business Schools are Great Incubators

If you want to be able to test business ideas without the risks associated with it, while being surrounded by some of the sharpest business minds in the world, then there's nothing better than business school. The number of courses that are dedicated solely to entrepreneurship have skyrocketed over the last few years, and B-schools are the perfect place to test your most outrageous, groundbreaking, and creative ideas.

You'll have the chance to fail without the consequences. As a matter of fact, failing in that context is a valuable learning tool. You'll then be able to tweak your business models, all with the guidance of teachers and mentors.

It's Easier than Ever to Get One

While the MBA is still as challenging as ever, online MBAs have made it possible for people to get a world-class education from virtually anywhere in the world, and they're growing in popularity too. Here are some of the reasons why so many students love online MBAs:

• Flexibility

• Affordability

• Convenience

• Diversity

• Access to state-of-the-art technology

But one of the most underrated benefits of online MBAs is the type of student they attract. Online MBAs bring students from all over the world and from different backgrounds and industries. A lot of executives and entrepreneurs also go for the online MBA because of convenience, giving you access to their perspectives and wealth of experience.

Institutions like Suffolk University Online have some of the best online MBAs that you can find. Getting an MBA via Suffolk University allows you to get an accredited degree from one of the best business schools in the world without leaving your home – and the best part is that you'll be able to do it on your own time while you still take care of your business!

You'll Develop a 360 Understanding of Business

One of the greatest tragedies in business is when someone has a brilliant idea but doesn't have the knowledge or skills to execute it. According to CEO and business school director Maurits Van Rooijen, some entrepreneurs, by character, may not be great at being managers.

"You need all round knowledge and managerial skills to develop a business successfully," he said. "You need an understanding of things such as finance and marketing, to how to assess, develop, and find talent, and interact in an effective way with your clients and your staff," he added.

The MBA is the only course that gives you a 360 view of the business, and the ability to get involved at every level. Here are some of the things you'll learn as part of an MBA:

• Management and leadership

• Marketing

• Business operations

• Finance

• Entrepreneurship

• Networking

• Accounting

• Business law

These are all aspects that play a crucial role in any operation. Understanding these principles will also give you more independence and allow you to be in the loop in every situation, whether it's accounting and compliance issues, intellectual property, human resources, or financial forecasting.

Entrepreneurs Are Not Born, They Are Made

While many entrepreneurs will have a common set of traits, such as grit, resilience, and tenacity, there is more evidence that great entrepreneurs are a product of their environment. Having these traits is good, but they aren't enough to be successful in the long term as you still need to know how to build and manage your business effectively once your idea is implemented.

According to business school professor Andrew Godly, there is no real evidence that certain personality traits are precursors of a successful career as an entrepreneur. "All evidence supports that great entrepreneurs are not born," he said. "Instead, all evidence supports that their environment plays a much more important role. It's about what they've learned, either through formal education or otherwise."

And there's no better environment than an MBA to earn your entrepreneur chops. Being able to rub shoulders with like-minded driven people will open you up to all sorts of different perspectives. An MBA is the perfect way to build on your existing aptitudes and qualities, and complement them in order for you to build actual business capabilities.

So, as you can see, the MBA is still a game-changer for business owners and a qualification that they should definitely consider if they want to take their business to the next level. If you are an entrepreneur or were thinking of becoming one, we suggest you speak with someone who'll be able to lay out the benefits of an MBA in detail and show the best possible path for you.

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