The impact of the COVID-19 pandemic and the associated lockdown has been significant for every business. There is much talk of the “new normal” and hopes of recovery, but it would be foolish to assume that a business just has to pick up where it left off and carry on doing what it did before, in the way it did before, to succeed. The business world has changed fundamentally and we need to recognise that and adapt accordingly. There will be a certain level of Darwinian principle in play, where some businesses will founder and others will change, adapt and flourish; every disruption is an opportunity if you approach it well.
So, how do you make sure your business falls into the successful category to survive and flourish?
Abraham Maslow was an American psychologist who proposed a motivational theory based on a five-tier model of human needs, often depicted as hierarchical levels in a pyramid. Needs lower down the hierarchy must be satisfied before individuals can attend to needs higher up. For example, if you don’t have food and water, you need to worry about them before you can spend too much time thinking about relationships and friends.
A similar approach can be taken to the needs of a business as it grows and evolves. At the lowest level, business leaders need to worry about cashflow, recruiting and having the right product before they worry too much about partnerships and recognition, for example.
The Hierarchy of Needs Model
Following the Maslow model, below is a hierarchy of needs that might apply to a business. For any business there will be other factors to consider at each level – the list is not meant to be exhaustive, but it serves as a basis for structured thinking about the dynamics of a successfully growing business.
In the same way that Maslow defined a base level of physiological needs (food, water, warmth, rest) a business has a level of the most basic material needs for survival that must be satisfied before higher level needs can be addressed. These include:
- Financial resources to support ongoing business operations;
- The people needed to make the business run properly: in the right numbers, with the right skills and well-motivated;
- The necessary infrastructure, such as: premises, plant and machinery, IT and communications;
- A core product that meets a recognised market need and is the fundamental bedrock of the business.
There is a direct read across from Maslow’s second level of safety needs to the needs of a business to make itself resilient in the face of the many challenges and shocks that it will face. (COVID-19 is a case in point.) There will be many aspects to this for different businesses and available cash will always be important, but some of the key issues are:
- Physical security of premises and property to prevent material loss or damage;
- A health and safety regime to ensure a responsibly managed and sustainable working environment for all members of staff;
- Protection of the business’ intellectual property to maintain competitive advantage;
- A support network to provide advice and practical support across a range of business areas, with strength in depth and some resilience and redundancy in-built.
Where the first two levels of need are about survival, the next two are about social context (for an individual), or a business’ place in its geographical or sector business community. The first part of this involves the relationships a business forms and maintains with the other players in its field:
- Moving on from purely transactional relationships with the supply chain to ones based more on trust, mutual respect and cooperation;
- Building long term customer relationships to foster loyalty and create powerful advocates for the business;
- Collaborating with partners and networks of similar organisations for mutual benefit, rather than pure competition;
- Contributing to organisations such as trade associations or chambers of commerce.
The fourth level in Maslow’s hierarchy is centred on esteem, both for oneself and from others. In the business context this relates both to the business itself and the leaders associated with it, and builds on the relationships forged at the previous level. The main aspects are:
- Feedback from across the customer base on the value they derive from trading with the business in preference to its competitors;
- Recognition from peers for the achievement of the business and its leaders, whether evidenced through formal awards schemes or informal commentary;
- Self-recognition for the achievements brought about through hard work, risk-taking and determination;
- The bottom line – real, tangible financial gain delivered through the business’ operations.
The pinnacle of the pyramid for a business (and its leaders) is about realising strategic value and fulfilling the dream that was at the heart of starting the business in the first place. For Maslow, this was about self-actualisation: an individual’s desire to become the most that they can be. In the business context, this might be about the business leaders’ exit plan or about reaching the level where it is time to pay back into the business community. This could include taking an ethical stance on the business’ approach to corporate social responsibility, creating or supporting charitable endeavours, or directly supporting less mature businesses through mentoring programmes. However it is manifested for a particular business, it represents the fulfilment of all strategic goals and is the carrot that keeps leaders motivated when times are tough.
How does it help?
Climbing the pyramid as a business grows
When a business is in the early stages of its formation and growth, much of the focus and effort in keeping it moving along is spent on the lower levels of material and resilience needs. Without getting these right at the start, efforts on the higher-level needs are risky without strong foundations in place. As a business grows and becomes more established and successful, its leaders will find their time and effort is more focused on the higher levels of relationships and recognition as the route towards achieving and realising strategic value. This is not a linear progression where one level must be “completed” before the next level can be started, but a general principle that the lower levels dominate until they are satisfied to an acceptable level and attention can be turned to the higher levels.
So, a business leader who has built their business over several years into something that is working well and moving towards creating strategic value will quite rightly be spending most of their time on the higher-level issues. The lower levels are still important, but they are generally either ticking over very nicely or responsibility for looking after them has been delegated.
Impact of lockdown
The impact of the lockdown and all it has done to prevent businesses trading as normal, enforce remote working, disrupt supply chains and deplete balance sheets will be to hollow out the lower levels of the hierarchy of needs. Cashflow will almost certainly have been affected, the workforce may be depleted or slow to return and the measures necessary to comply with social distancing rules will make safety and security a very different matter. There will be other aspects for every different business and not all will be immediately apparent now, but they will all show up in time.
Think of it like a Jenga tower: the aim is to keep building at the top, but there are gaps lower down. As a minimum, you need to know where the gaps are to be able to take them into account; even better, filling the gaps creates a more stable base for the tower and prevents it toppling.
So, for the leadership team, now is the time to climb back down the pyramid and check the foundations before going back to work on the higher levels.
How to move forward
So, how does the Maslow approach help us to plan how to recover from lockdown?
Here is a logical process that uses the Maslow model to help understand the challenge and formulate a plan to regain a business’ former operating level.
Stage 1 – Assess
Take a step back and critically assess the current state of the business, using the Maslow model. Start at the lowest level and identify what the material needs for your business are. Think right back to when it was starting up and be very critical about what is genuinely a need and what is something that is non-essential but has become assumed over time. Then assess each of these and determine their current state of health. Again, think back to the early years of the business and ask whether you would be moving forward until the issues had been addressed.
In particular, take some time to look at your product/offering to the market and think about whether it needs to evolve or be delivered in a different way to meet your customers’ new needs. Now is the time to be innovative and take advantage of the disruption where you can.
Move on to carry out the same exercise for the next level of resilience needs and then relationships. It’s a matter of choice how far you go and the top two levels of recognition and strategic value may not deliver many important insights at this stage.
The end result of this exercise will be a view of your Jenga tower and where the gaps are.
Stage 2 – Evaluate
It is unlikely you will have the resources or time to address all the gaps at once and it may not be necessary to focus just on the material needs first. Take a critical view of the situation and prioritise which areas you want to address first to address the biggest risks. Look at the measures you were forced to put in place during lockdown to change your product/service or how it is delivered to your customers; are any of them actually better than the way you did business before and merit sticking with?
As a general principle, you should be looking to address the critical gaps in the lower levels first. Then build on this to tackle the more complex areas higher up the pyramid. The output should be a hit list of the actions to be taken and the resources needed.
Stage 3 – Plan
Create a campaign plan to map out how, when and by whom each of the actions will be carried out. Include goals and deadlines to drive progress and group activities as appropriate. It is particularly important to understand and expose the relationships and dependencies between the activities and their outputs.
Stage 4 – Energise
Having a decent campaign plan is only half the battle; even the best plan is doomed if the people who need to carry it out don’t believe in it. This comes down to good old-fashioned leadership. Remember that your workforce have had a fairly major shock with the disruption of the world as they knew it and will all be struggling with things outside work as well as within. Add in the negative media reporting and general uncertainty about the future and you can forgive them a little cynicism about going back a few steps and going over old ground.
You must believe it can be done and pass that on to your staff. Give each of them a part to play in the plan and use the campaign plan to explain how it all fits together to achieve the goals you have set. Above all, inject your own drive into the team to energise them and get them on side.
Stage 5 – Iterate
There is an old military saying that no plan survives first contact with the enemy, or in this case with the brutally real world of the business marketplace. For the campaign plan to succeed, you must monitor progress and adjust the plan accordingly. As the gaps in the lower levels are filled, so the focus will naturally shift to the higher levels and something that looks more familiar as business as usual.
Act now to get ahead
Your business may have had a knock, but if the core element that made it great is still there it can be great again. You need to believe it can be done and have a proper strategy for making it so – and don’t be afraid to use your support network to make it happen; that’s what it’s there for. (They’re part of the pyramid, but also part of the plan to rebuild it.)
And finally – don’t let impatience for recovery steer you into recklessness. If you step back, assess the situation and make a decent plan to move forward, you’ll stand a far better chance of success and might just get back on your feet before your competitors do.
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