Strategy at the Precipice

At one time I kicked off my keynote speeches by saying that I had put together a short video that summed up how many executives are feeling about the state of retail today. Then I showed a clip from Poltergiest II that mostly features 15 seconds of a teenage girl screaming, “What’s happening?” Aside from the cheap laugh, I was making the point that for many retail organizations, be they retailers, wholesalers, or service providers, and irrespective of country, format, or product category, it’s a time of great confusion and sometimes outright panic.

Companies can take little comfort from having been around a really long time and being well known. While not unimportant, these factors by themselves scarcely provide any protection against the harsh reckoning of this new retail world order. Many of the companies that have gone out of business in just the last few years were formerly enduring household names. Today large iconic brands like Macy’s, Hudson’s Bay Company, and many more are struggling mightily to stay relevant. The situation is no different outside North America, or among local or regional chains or independent retailers. A mom-and-pop operation may have the advantage of local ownership, deep roots in the community, and personalizing their offering to their customers, but that hasn’t stopped large numbers from shutting down.

Much of retail now finds itself standing at a precipice. And unfortunately the impact of the Coronavirus will only accelerate the demise of many.

Clearly designing and executing strategy at the precipice is far from ideal. Most people and organizations don’t make good decisions when they are overwhelmed, confused, or consumed by fear. In addition, companies approaching dire circumstances typically have highly constrained options. One problem may be lacking a sufficient runway to execute a transformation even if a really good plan has been designed. Another is that available financial resources are usually quite meager. Moreover, troubled companies usually have very limited ability to raise significant additional capital.

Obviously, the best way to avoid these challenges is to work on becoming—and staying—remarkable well before a business model begins to lose relevance. If you have yet to reach a full-on crisis, the key is to have a clear view of where you stand and accept the reality of how much change will be needed and how quickly it needs to be done. And then–and this is the crucial part that many fail to grasp–start taking aggressive action. Not next week. Not tomorrow. Now.

As it turns out, whether you are trying to be ready for a pandemic, avoid the dire consequences of developing a severe chronic illness, fight tyranny or confront any variety of other harsh potential outcomes, it’s best to push through our denial and take the required actions before we find ourselves in a crisis. Chances are pretty good the bullet’s already been fired; it just hasn’t hit us yet.

And, as Carlos Castaneda reminds us in Journey to Ixtlan, “the problem is, you think you have time.”

This post is adapted from a sub-chapter in my forthcoming book available for pre-order at most major book retailers, as well as great independent merchants like BookPeople in Austin, TX.