What should not change in a recession
There’s a lot that’s going to change in the next 12 months, so businesses need to adapt. Customer priorities will change. Government legislation will change. Employee needs will change. Technology specifications will change. The business landscape is going through radical transformation. But amongst all this turmoil, it’s important to understand what should not change in a recession.
Jeff Bezos, founder of Amazon, has something interesting to say about this:
‘I very frequently get the question: “What’s going to change in the next 10 years?” And that is a very interesting question; it’s a very common one. I almost never get the question: “What’s NOT going to change in the next 10 years?” And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time.’
This idea seems to go against the current narrative of “change”. There’s a lot of pressure for businesses to flexible. To identify what they should change. And there is undoubtedly a need to adapt. But it can be hard to establish exactly how.
However, change isn’t the only path to success in the future. Focusing on what’s important to your customers – what’s always been important – will provide a valuable reference point amongst the turmoil. (Jeff Bezos identified that the two factors that will always be important to Amazon customers are speed of delivery and price.) Customers are looking for consistency. In this situation it’s important to consider what should not change in a recession. The businesses that can provide consistency have a competitive advantage.
One thing that shouldn’t change is your brand. How you articulate it might change. How you deliver it might change. But what your brand represents – what you stand for as a business – that should not change.
Two of the foundations of your brand are your “purpose” and your “values”. These should not change. During the Financial Crisis in 2011, the supermarket Sainsbury’s recognised that the needs of their customers was changing. So they adapted, to reflect these needs. They dropped their strapline, “Try something new today”, and introduced “Eat well, for less”. They didn’t change their purpose or values, just the way they expressed them. This new approach helped Sainsbury’s increase their market share, reaching it’s highest point in almost a decade.
What is your purpose?
Your purpose is a statement of WHY you do business. It should describe what motivates you. Amazon describe their purpose as: “To be the most customer-centric company on the planet”. One of the factors contributing to the success of Amazon is a clear understanding of their purpose. It has enabled them to evolve and move successfully into new markets. Each new product or service launch is delivering a “customer-centric” benefit. The successful launch of products like Amazon Prime, Amazon Echo and even AWS (Amazon Web Services) are evidence of this.
What are your values?
Your values are a set of guiding principles that describe how you do business. They translate your purpose into a way of behaving, and it’s this behaviour that will determine the quality of your customers’ experience, when they do business with you. Research* has identified the nine most common value “themes” used by businesses: Agility, collaboration, customer, diversity, execution, innovation, integrity, performance, respect. Understanding what values are most relevant to your business, and how to demonstrate them, is vital in building loyalty with customers.
In an environment that demands so much change, it can be hard to remain consistent. But understanding what should not change in a recession is vital. The discipline to remain consistent is essential to building trust. The importance of trust, when there is so much uncertainty, is incredibly valuable. The ability to trust a company, and how they behave, will give customers confidence in the products and services you are selling. As the economy enters a severe downturn, it is the ability to build and maintain a long-term relationship with customers that will determine the success of your business.
* Measuring Culture in Leading Companies, MIT Sloan Management Review, 2019
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