Business Lessons in Lockdown #4

Target fixation is a common reaction in a crisis and, whether it's in our personal or business lives, the consequences can be disastrous. Researchers have conducted many studies on this, which is tied to the basic function of the brain that leads us to respond with “freeze, fight or flight” when encountering a dangerous situation. For example, when learning to ride a bicycle, children often crash into obstacles, such as trees or fences, because they spot the danger, but become fixated by it and end up riding straight into the object they're looking at. 

Something similar happened to one of our service-providers during lockdown. Early on, they became totally fixated on protecting their business from the financial impact of government restrictions and, as a result, they ignored the effects of their actions on customers. They furloughed 75% of their staff to reduce costs, which meant that they could only offer a skeleton service. So focussed were they on cutting overheads that they didn't consider how their customers might feel about the reduced service level, especially as they were still expected to pay in full. 

When challenged by disgruntled customers, the supplier then switched into fight mode, desperate to defend every last penny of their income, rather than enter into negotiations to reflect the reduced service. The outcome was entirely predictable; the supplier created a lot of bad feeling and their previously good reputation was damaged, when previously loyal customers settled their accounts and switched to different providers.

Advanced motoring instructors teach us to look away from the threat and instead aim for the escape route. This is equally true in business. While you can be laser-focused on a specific objective, this should not come at the expense of all other priorities - in this case, maintaining customer satisfaction. This was a hard-learned lesson for the supplier - the escape route was there for them but their fixation on maintaining short-term profits ultimately had the opposite effect on their long term prospects.