How do I build a fluid business?
A fluid company can adapt to change and a crisis. An inflexible one will be destroyed by it. 2020 has been a harsh lesson in the need for flexible, adaptable business structures.
Never has the need for a fluid business structure to support your company been more apparent. As the end of 2020 comes in sight, one message is clear: the pandemic is not over. Winter is looking like a time for increased restrictions in many countries, and with that comes increased anxiety for businesses.
Yes, there is hope coming. Three — three! — vaccine candidates are close to approval, and so we have hope that by the summer restrictions might be lifting. We didn’t have that hope, even a month ago.
But, meanwhile, any hope of a rapid return to normal is gone. We still have months of this crisis to go. And we should take a lesson from that: we need to build our businesses in ways that allow them to bend with the wind and survive, to echo the proverb, usually attributed to Confucius:
“The green reed which bends in the wind is stronger than the mighty oak which breaks in a storm.”
We’ve built many mighty oaks over the past few decades, an era of (relative) stability in much of the world. But many of those big companies are cracking and falling in the face of the harsh pandemic storm. A British retail giant collapsed, taking a centuries old department store with it.
But, if we might reach to nature for a metaphor again, the collapse of a mighty tree in the forest provides the setting for a new ecosystem to develop, and other businesses rise to prominence.
Here are some issues that you might need to consider.
Business model agility
The word “pivot” has become horribly over-used in the startup space. It’s time to embrace it, though as many of us have spent 2020 not so much pivoting as pirouetting. With little idea of what trading conditions are going to look like from month to month, the idea of having a five-year business plan is looking like a nostalgic fantasy rather than a realistic approach to commerce.
And some businesses have adapted fast:
- Education has moved online, at all levels, but to varying degrees. Primary and secondary schools are still operating physically where they can, but tertiary and professional education is now almost completely online. While face-to-face work will always have its place, many educators and trainers have discovered how they can extend their business internationally — and people are coming to see the advantage of learning from others on the other side of the world.
- Hotels have realised that their often empty spaces can be used for other things. Bedrooms make fine temporary, socially isolated offices for those who struggle to work at home, or who desperately need a break from them.
- Clothing manufacturers retool as mask makers, coffee shops become food delivery firms.
These are, of course, just a handful of the examples. But the lasting lesson of 2020 is that you can’t assume that things will always continue much as before. You should always be on the lookout for changes to do things better, more flexibly, more creatively. And diversity of business can make you more resilient in the face of highly disruptive events. A fluid business doesn’t need to pivot, because it is always adapting.
For years, we’ve focused on proactive innovation — innovation we seek, and attempt to execute. This year has been an example of forced innovation — adapt or die. We need to build companies that can strive for the former — and rise to the challenge of the latter.
And we can’t talk about that process in the 21st century without talking about digital.
Use of digital is, of course, critical to most people’s business agility now. But it’s a significant enough issue that it’s worth considering it its own right.
On one hand, businesses without some digital capacity are ill-equipped to embrace the rapidly enforced digital transition over the last nine months. One UK retailer — Primark — essentially saw its income evaporate during the lockdown, as it had no online capacity.
Smaller businesses have an easier time here. They can quickly establish online stores, and potentially switch business models from sit-down service to collection or delivery.
However, the underlying trend here is clear: we’ve seen between five and 10 years of digital adaption in well under a year. No business can afford to sit on its hands on this issue any more. What’s more, that transformation has been on both ends of the business: both on the customer-facing end, and the internal processes.
There will probably never be a better time to re-engineer your company for flexibility than right now. All the assumptions about working practices have been thrown up in the air by lockdowns and stay-at-home orders. Put the time in now to create the structures that will support rapid change in future crises, be they biological, climatic or economic.
Real estate flexibility
Your statement office is no longer something to cherish. Many offices have been standing largely empty for the best part of the year now. Presumably, some truly terrifying ecosystems are growing in abandoned coffee cups and forgotten biscuit stashes in offices worldwide.
Some people will be very reluctant to return to the office. The flexibility, freedom and enhanced work-life balance that home working has brought us can be deeply seductive. Others will be desperate to return to the office, because of constrained home working conditions, a difficult living situation — or just a general joy in the gregarious nature of the workplace.
While some businesses have abandoned their offices entirely, others will have to rethink how they are used. They need office layouts that are fit for a more flexible, remote-working friendly world. After all, it’s much harder to argue that it won’t work, as it has worked for the best part of a year.
So, on one level, there will be the process of right-sizing the real estate portfolio, to reflect different working patterns. But, on another, there will be a rethinking of how we use office space when cramming ‘em all in isn’t the default mode.
Apple, amusingly, has turned their phenomenally expensive new HQ into the world’s most pricey backdrop for their product launch videos. Not all companies can afford to do that — and even Apple won’t do it forever — but that sort of creativity will be essential. Your office space serves you, you don’t serve it. How can it be recreated for a world where maybe we meet less, but considering it more valuable when we do?
What does a real estate portfolio for a fluid business look like?
The Reset Trap
As (and when) vaccination and other responses to the pandemic allow us to relieve restrictions, there will be two groups of companies. One group will attempt to reestablish the pre-pandemic status quo as fast as they can. The other will embrace the new normal, and become a fluid business.
That will lead to a competition for talent. Those who seek a return to the before times gravitate towards those businesses that return to the standard commute-and-work structure, and those who appreciate the escape from that seek out businesses that support remote work.
That will be a Darwinian battle for economic survival — but Darwin’s lesson has always been that it’s those who adapt to change that survive, not those who resist it.
It’s time to get fluid.
More Key Fluid Business Reads and Watches
- Matthias Schrader on accelerating digital change.
- How do companies adapt to the new age of remote working?
- The new frontier of workforce management
- Post-pandemic product design is systems design
- Post-pandemic consumerism