The Gift of COVID-19 Constraints

Leadership, Management

— by Mike Sharrow

I still recall the rosy outlook of the January 2020 ITR Economics forecast for +2% US GDP growth and the talent wars associated with <4% unemployment. The societal vertigo of Q2 2020 will be legendary. And like a multicellular thunderstorm, it will be some time before we’ll know when the overall eye of the crisis storm has passed. A previous post on the 4th Industrial Revolution rightly described the VUCA nature of the environment with events like COVID-19 as shots of nitroglycerin to the already dynamic context.

When COVID-19 first caused the tsunami alarm bells to sound, we leapt into forward-looking broadcast mode with a weekly cadence of “executive briefings” for a rapidly expanding audience. It felt like launching a newspaper business (which gave me appreciation for real pioneers in that space) with the continual pressure of figuring out “the story” and then curating the news briefing for entrepreneurial audiences in actionable formats. Like many CEOs, while I had the luxury of spending four months in 2019 building my 2020 operating plan, I built four new ones in three weeks as the tectonic plates of the marketplace shifted under COVID-19 pressures. The leadership and consulting schtick of how the Chinese (ironic) word for “crisis” is equal parts danger and opportunity could not have a better exhibit! 

Within weeks it was evident that the great long-term risks of the virus are equally its co-morbidity diseases: fear, paralysis, despair, delusions of “returning to normal,” and myopic survival focus at the expense of long-term strategic plays. As hockey great Wayne Gretzky famously said, “I win by skating to where the puck is going, not where it is.” 

In late April, we launched a survey of lower-middle market CEOs across the US to get a snapshot of COVID-19 impacts and insights by geography, industry, size, and other indicators. In two weeks, we captured responses from 586 CEOs. Looking at industries and states with variance begin to tease where B2B entrepreneurs might shift customer targeting and product positioning. The data was even helpful for the US Congress looking for “main street” business insight as they evaluate successive stimulus strategies.  Some of the insights include:

 

  • While 59% had no knowledge of any COVID-19 cases in their social circles, 50% saw a significant revenue decline.
  • Businesses in the $25-100M revenue range seemed to consistently retain/recover revenue at a superior rate.
  • Businesses in agriculture, food services, construction, and engineering/architecture sectors favored significantly better than other sectors.
  • 90% attributed change in their outcomes to the power of their peers.
  • 55% saw dramatic increase in employee ministry opportunities.
  • Despite significant revenue loss, 55% of companies found creative ways to retain or grow their workforce (often at ownership sacrifice).
 

  • 34% had cash reserves for one more month of crisis; 71% could weather three to six months.
  • 42% had identified innovations that would make their business stronger post-COVID-19.
  • 12% launched new products to gain market share.
  • 6% realized their “old way” of doing business would be obsolete in the new market.
  • 27% seized opportunities to minister in their local communities, 17% even ministering to their industry.
  • 60% are aggressively working on future business model plans.

 

Uncertainty ranked as the big zinger on outlook. 

The greatest challenges CEOs are facing:

uncertainty (37%), cash flow (25%), profitable revenue growth (16%), employee care (14%), peer interaction (8%)

VUCA is on steroids, so now what? As Will Mancini said recently, “You don’t fight the fire of uncertainty with elusive certainty, but with the fire of vision clarity.” 

We played off the old “Strategic Inflection Point” paradigm to develop the “Tulip Tunnel of Uncertainty” to challenge leaders to press into the uncertainty haze.

Bob Johansen has written very helpful books around pivoting from VUCA as a negative to a “VUCA Prime” framework (Leaders Make the Future and The New Leadership Literacies).

VUCA Prime is about responding to volatility with vision, uncertainty with understanding, complexity with clarity, and ambiguity with agility. We’re finding that the VUCA Prime framework is a productive grid that can bring the clarity needed to navigate uncertainty, particularly when combined with a discipline of balanced scorecard risk mitigation and opportunity identification.

These are painful times for sure. As followers of Jesus, however, we have both imperatives and advantages to serve with power. Paul wrote a charge to the young leader Timothy that we, too, should remember: “For God has not given us a spirit of fear and timidity, but of power, love, and self-discipline.” (2 Tim. 1:7). This is not a time for faith-driven entrepreneurs to bunker down and wait for the storm clouds to blow over. The gospel calls us to restorative, redemptive entrepreneurial engagement in shaping the emerging new reality.

 We are seeing “gifts” from the crucible of COVID-19:

  1. Resets. It wasn’t all roses before, it was just a better market. This is a chance to change things that needed changing.
  2. Purpose clarity. If that was a tacked-on feature before, it’s a chance to invigorate purpose clarity and mission. Why are you in business anyway? Why is the world better? Why are people impacted? How is the business part of an eternal impact story? 
  3. Gospel demonstration and proclamation. We’ve seen more reports of workplace salvations, discipleship, and compassionate care in April than any month prior. Crisis creates opportunities to give a reason for the hope you have (1 Pet. 3:15) and to love teams, customers, and communities.
  4. Busted market concrete. The old forms of market leaders are disrupted, so it’s an opportunity for new models, products, players, and classic “innovator’s dilemma” maneuvers.
  5. Pruning for agility. Some of us needed to “adjust the sails” of our life and leadership. There’s a growing class of resilient leaders who are not only surviving COVID-19 but have retooled and pruned the business for future orientation so that when the market winds return, they will catapult. 
  6. Learning. Whether it’s rapid pivots, adaptations, or genuine innovation, this is a sprint of learning that could define the winners and losers of the next decade. Some will have coasted, others will have been building and preparing (Prov. 6:6-8).

There’s a “whole lotta shaking going on” in this VUCA reality—how are you leaning into it and leading through it? 

  • Kevin Miller Bio

    With over a decade of experience in marketing leadership, brand management, and business development, Kevin has helped numerous companies refine and implement plans to create exponential growth.

    Prior to joining C12, Kevin led a successful Florida-based brand strategy consulting business focused on growing small and medium-sized businesses. Entrepreneurial in spirit, Kevin also has a diverse background in launching start-ups as well as helping struggling or stagnant businesses develop a new course of action. His experience incorporates knowledge from multiple industries including textile manufacturing and design, medicine, real estate, technology, web development, and the creative arts.

    After attending the University of Central Florida where he studied Music Performance, Kevin became involved in worship arts and youth ministries, serving for several years in various leadership roles. He and his wife Beth, an elementary school administrator, have been married since 2000. Together with two sons Kyle and Kamden, they enjoy a wide variety of outdoor activities including hiking, hunting, fishing, and backpacking.

  • Troy Blackmon Bio

    Troy came to The C12 Group in 2008, with a diverse background in executive leadership, sales development, team building, and operations. Through his role as VP of Field Operations, he is committed to serve, equip and encourage CEOs and business owners to lead thriving companies that honor the Lord and serve people.

    During his tenure at Chick-fil-A, Inc. Troy learned that business excellence and glorifying God in the marketplace go hand in hand. Troy managed a P&L of $35+ million in revenue and coached business owners in operational excellence and improving financial results.

    In addition, Troy has been involved in leading small group ministry, including planting a church in Seattle, WA. Troy was formerly Partner at OneAccord, a management-consulting firm focused on accelerating revenue for mid-market companies. While at OneAccord, Troy was privileged to work with numerous technology companies in senior leadership positions, managing sales, marketing, and business development activities. Troy most recently served as the President of a technology private equity group, where he led the management teams of 4 portfolio businesses.

    Troy is married to his high school sweetheart, Shanna, and has been blessed with 4 children. He enjoys golf, cycling, and mountain biking with his family.

  • Mike Sharrow Bio

    Mike joined C12 as a member in 2010 while serving as an executive pastor for a large church in Texas and owner of a healthcare strategy consulting group.  Prior to that, he had served in a variety of leadership roles in both operations and sales corporately for the Walgreen Company, financial services as well as strategic development work with Health by Design.  In 2011 he exited his commitments to join the local C12 practice in San Antonio as an associate chair serving CEOs across that market.  In 2013 he and a partner acquired the greater Central Texas region and stewarded it as it grew to a team of 8 full-time chairmen serving nearly 150 leaders.  Mike is passionate about collaboration, strategic planning, Gospel initiatives and BHAG endeavors.

    With a background spanning Fortune 50 corporate settings, startups, non-profit and local church, Mike has been discipled into an integrated life perspective around the calling all believers share to be disciple-making disciples and ambassadors of Christ across all vocations and contexts.  It was in 2005 when God revealed to Mike the perils of a “sacred versus secular” duality in life and since then he’s been on the adventure of living one life in Christ, with work as worship, business as ministry and life as mission.

    Mike grew up in Alaska, graduated from Trinity International University and the Loyola Graduate School of Business.  He married his bijou of an Iowa farmers daughter, Jacqui, in 2002 and they have 2 girls, Elayna and Sophia.