5 Reasons Not To Abandon Your Long-Term Strategy During A Crisis
By now, we are all familiar with operating during a crisis, whether it is a temporary industry downturn or a once-in-a-lifetime economic disruption like the COVID-19 pandemic. As a business leader during these times, it can be tempting to focus only on putting out immediate fires and relegate long-term strategy to the back burner. Maybe your company had a strategy in place prior to the pandemic and abandoning it for now seems like the better choice; or perhaps you hadn’t gotten around to formalizing your long-term strategy, and now it feels counterintuitive to create one when you have so many immediate problems. “If I don’t solve X right now, there won’t even be a company to consider next year” might sound familiar.
While many crisis-induced problems are extremely important and should be addressed, this doesn’t eliminate the need for a long-term strategy. The two are not mutually exclusive. In fact, having a long term-strategy can actually aid in solving your immediate problems.
A Long-Term Strategy Answers the “Why”
In a crisis, there’s no shortage of problems. Having a long-term strategy in place keeps the focus on why we need to solve these problems. With a constant barrage of issues, there is a real danger of fatigue and stress leading to burnout, leaving you to wonder what the point of putting out one fire is if two more are going to spark right after. A long-term strategy counters this defeating mindset, reminding you that each fire you extinguish is contributing to something larger and worthwhile. Answering the “why” means you are providing a vision for the future that you are working towards, which offers much-needed hope in the midst of a crisis and acts as a proverbial light at the end of the tunnel.
A Strategy Strengthens and Orients Your Team
“Can’t see the forest for the trees” is very relevant here, particularly when it comes to your company’s management team. It’s all too easy to pursue counterproductive solutions when everyone is working in their own silo, addressing problems in their purview on their own, without the larger context. There are two ways to avoid this: consolidating problem-solving at the top, or providing a roadmap for the team to follow. The former is unrealistic – and undesirable – for most business owners.
Thus, providing a roadmap in the form of a long-term strategy is the solution. Having a shared set of goals re-orients the team and ensures everyone is rowing in the same direction, without the need for the owner or CEO to direct every move. Whether your VP of Sales is working to rebuild the pipeline, or the Director of Operations is sourcing a new supplier, their end goals are the same.
This reality highlights the importance of a collaborative strategic planning process. The collaborative process creates buy-in to the plan from all team members from the beginning, as opposed to having initiatives dictated to them. In the latter case, when a crisis hits, it’s common for team members to question the plan, point out holes or flaws that had always existed (but they were never asked), and discard it altogether in favor of what they think is best for their department. For teams that have a collaboratively developed strategy, team members are already aligned on the basics and much less likely to abandon a plan they had a hand in creating. This is not to say that strategies are set in stone – they should be fluid, living documents. Making tweaks based on current circumstances is okay, healthy even, but likely will not involve a total overhaul or abandonment of the map that everyone is following.
A Long-Term Strategy Prioritizes Problems
We’ve already established the sheer number of problems you can face during a crisis. The good news? Not all problems need to be solved, at least not with the same sense of urgency. Understanding the long-term vision of the company helps prioritize which problems to tackle first. When you have a written plan with a limited number of strategic priorities, you can refer to it as problems arise and ask yourself “How does solving this problem contribute to achieving our strategic priorities?”
If the answer is that it doesn’t or that the contribution to the strategic plan is weaker than the contribution from solving a different problem, then you gain clarity on which problem to focus on. You can stop wasting your most valuable resources – time and mindshare – on problems that won’t contribute to your long-term success. Rather than feeling overwhelmed by the volume of problems, a long-term strategy allows leaders to focus on the highest priorities while either delegating other items or freeing themselves from the distraction of addressing too many things simultaneously.
A Long-Term Strategy Avoids Band-Aid Fixes
In a crisis, it is very tempting to make reactive decisions. The speed at which problems arise, the number cropping up at once, and the very real potential consequences of failing to act force a sense of urgency to most decisions. We’ve all likely said something in the heat of an argument we wish we could take back. Unfortunately, reactive decisions can have the same consequence, as (just like a snarky comeback) they are often not fully thought through. Even if they solve the immediate problem, short-term fixes can often compromise or contradict long-term plans.
A simple example would be cutting a product line during a downturn to streamline operations and reduce supply costs. While sometimes this could be in line with a company’s long-term strategy, if it is a purely reactive decision, the business may find that it is harder to recoup enough in sales with a reduced product line. It could make it harder to bring customers back post-crisis if there isn’t enough variety or the product was a favorite, or the cost of adding the product back in later could be prohibitive or more expensive than if production had just continued through the crisis.
These are all potential consequences that would be explored in a reflective decision. Having a long-term strategy in place makes it easier to make reflective decisions, as the strategic goals act as a barometer to weigh each solution and its potential consequences against. As with many business decisions, it’s not a science, there are moments of intuition or weighing the rewards vs. the risk, but you are not flying blind.
A Long-Term Strategy Positions You for Post-Crisis Opportunities
Churchill has been credited with saying “Never let a good crisis go to waste.” While it’s certainly not fun being in the throes of a crisis, history has shown us that good can still come from it. And those who are planning for beyond the immediacy of the crisis are better positioned post-crisis.
It’s the difference between just surviving the crisis and thriving post-crisis. Imagine you are a settler traveling over a dangerous sea to get to a new land. In the “survive” mindset, your focus is on the journey itself, using all of your extra lumber to patch holes in the ship as storms hit or throwing food and water overboard to lighten the load if the patching isn’t enough. When you finally land, any sense of elation is quickly dashed when you realize you still have to find food and shelter despite being physically and mentally battered.
In the “thrive” mindset, you still face the same difficult journey, but you know upfront why you need to conserve some lumber and food for after you arrive. Instead of only using lumber to patch the holes, maybe you invent a new type of tar pitch out of other supplies and some of your food stores. Notice you still have to make some difficult decisions or trade-offs – this is a crisis after all – but having your long-term strategy meant you were still in better shape after the storms passed.
In a more real-world example, one of our partner company’s long-term strategy was tested early in the pandemic. Prior to Q1 2020, Boundary Devices, a leading provider of embedded computing solutions, had documented and detailed a strategy that, among other priorities, included standing up in-house manufacturing (previously, Boundary Devices designed and engineered its printed circuit boards but outsourced all manufacturing). Vertically integrating their manufacturing required significant capital investment and additional personnel, but was crucial to their long-term plans of continuing to scale, expanding margins and reducing reliance on suppliers.
Absent their long-term strategic plan, this investment would likely have been, at a minimum, paused amidst the natural tendency to play as conservative as possible given the unknowns of COVID-19 at the time. The strategic plan allowed the leadership team and board to efficiently evaluate the decision to move forward with the in-house manufacturing strategy. Ultimately, the reflective decision was made to stick to the plan in spite of the uncertainty of COVID-19, and the investment has been transformational for the company. As we look to finally exit the pandemic, Boundary Devices is actually better positioned to continue rapid growth than they were prior to the crisis.
It is important to remember that not every action taken in a crisis must have been pre-planned (in other words, if you didn’t already have a strategy in place, that doesn’t prevent you from making decisions with the future in mind). Sometimes the best opportunity post-crisis for your company arises because of the crisis (think to-go food and alcohol for many restaurants that never would have considered this as a revenue stream prior to the pandemic). The result – better positioning for your company after the crisis has passed – is the same.
There are a lot of competing priorities for your time during a crisis like the COVID-19 pandemic. It’s tempting to say that long-term planning should be pushed to another time, whether that’s postponing execution of your existing plan or you had been meaning to create your strategy prior to the crisis hitting. It feels counterintuitive, because your immediate, day-to-day problems seem much more pressing. Remember that long-term strategy is not counterintuitive, it’s complementary – and for the most prepared businesses, crucial – to finding your way out of the crisis.