By Allon Raiz
The scale of the national COVID-19 lockdown is unprecedented in living memory. The repercussions – personal, professional, national and international – will reverberate for years to come. As entrepreneurs, we need to be making the right decisions for right now to ensure that our businesses and our people’s livelihoods do not become another casualty of the virus. In this series of articles, Allon Raiz, CEO of top business incubator Raizcorp, shares his views and insights on weathering the storm and even thriving after it.
When the COVID-19 system shock first hit, the initial – and correct – reaction by most entrepreneurs was to become defensive and protect what they had built. As more details surrounding the impact of the shock – both negative and positive – have started to become more apparent, entrepreneurs are starting to stick their heads out of their bunkers to try better understand where all this may be going, and what future opportunities and threats may be presenting.
In my previous article of this series, Make time to think, I highlighted the importance of entrepreneurs trying to understand future scenarios and aligning their business strategies with their predictions about where their market opportunities and threats may lie. Having done so, it’s now critical to take the next step which is to go on the offensive and become aggressive about driving your business in your newly-identified direction.
Ben Horowitz, the author of The Hard Thing About Hard Things, recently wrote an article in which he speaks about the difference between “wartime” and “peacetime” leaders. The thing that stood out for me about this article is his view that peacetime leaders focus on increasing the size of their markets, while wartime leaders concentrate their efforts on expanding their market share within stagnant or declining markets. This requires a strong level of aggression and, in my view, the right timing. You need to confidently drive your marketing and sales offensives before your competitors recover from their dazed and chaotic states. The more quickly you bring yourself to a state of rationality, the more quickly you can realign your business strategy and the more quickly you can become aggressive.
Now is the time to narrow your strategic focus. In my opinion, core competencies are the rudiments that create your unique selling proposition (USP). Going back to basics, so to speak, going back to refining and continuing to build your core competencies is where you will build your confidence to become more aggressive.
Our natural instinct right now – to be defensive and randomly opportunistic – is going to hurt the medium- to long-term prospects of the business. I am encouraging the entrepreneurs who I work with to have the discipline to reject their so-called natural instincts and double down on refining, perhaps even redefining, and building their core competencies. It is these core competencies that must be combined to create the much-needed USPs we will use to compete within the market.
The next step is to find the “sharp end” of your value proposition, the part that is genuinely and discernibly unique. Very much like a magnifying glass focusing the rays of the sun to ignite a fire, your marketing and sales offensives must be rallied around a particularly narrow view of your USP. Of course, it’s important to bear in mind that this chosen, narrowed-down USP needs to talk to a market that both finds it compelling and also has the ability to pay the right price for it. There is no point in concentrating on a USP that may have been compelling prior to the system shock but has since lost its lustre, relevance or profitable market.
Once you have started gaining traction in the market and built your confidence, then and only then should you start broadening your lens and add more elements to your USP.
Going on the offensive requires the confidence that you have a weapon to fight with (your narrowed USP), the confidence that you are facing the right direction (your new strategy that considers your new current context), and the confidence that, once you gain market share, there will be sufficient spoils to nurture the business (a profitable market). Too many entrepreneurs in these times remain metaphorically holding up their arms in a defensive pose, their faces tucked tightly behind their bruised arms with their eyes closed, waiting for the next punch to be delivered by the market. Or they are taking wild swings at the market without a game plan, and certainly without any thought of saving their energy to wait for the ideal moment to deliver their renowned upper cut.
This is the time to become strategically offensive.