How to create a scalable strategy in the midst of the COVID-19 crisis
Let’s talk a little more about what it means to be scalable and how to start increasing your speed of growth.
We have already talked about how the world has quickly changed within the context of the COVID-19 pandemic and social isolation. Companies had to take extreme measures to adapt their processes and recalibrate their strategies.
Even before the pandemic, entrepreneurs already had a difficult time remaining relevant in an increasingly competitive market. In addition to this daily threat, businesses are now faced with a new unstabilizing factor: uncertainty.
In this context, designing a strategy that keeps your business healthy and sustainable on an ongoing basis – a crisis resilient one – can be the difference between success and failure.
Scalability will guarantee not only an increase in revenue but an exponential increase in results. This guarantees your foothold in the market for much longer.
What does it mean to be scalable?
To explain what it means to be scalable, let’s bring up a description by Nassim Nicholas Taleb. The Lebanese mathematician and statistician is the author of works such as The Logic of the Black Swan (2007) and Antifragile: Things that Benefit from Chaos (2012) – which we have already talked about in our webinar Antifragile Future: where are we headed?.
To explain scalability, Taleb creates two classes of activities: scalable and non-scalable.
Non-scalable: a profession, activity, or strategy that requires greater effort, time, and dedication to reach the result and provide profit/remuneration.
Scalable: a profession, activity, or strategy that does not require full dedication to achieve the result. It is the ability to expand production activities without a proportional increase in costs.
The concept of scalability is directly linked to the generation of profit and impact. A scalable business is able to increase productivity and reproduce in large quantities, without increasing the demand for resources (such as investment or labor).
How to become scalable
We already know how the COVID-19 pandemic shook the world economy and turned our consumption habits (locally and globally) upside down. Therefore, in times of constant uncertainty, a scalable business can make all the difference between the life and death of your company.
A scalable strategy always gets you ready for the next step, whether it’s sudden growth or increased demands.
Let’s take a look at a practical example. With the COVID-19 pandemic, we had a considerable change in the behavior of e-commerce: an exponential increase in sales.
Obvious reasons: the forced movement of social isolation and the closing of physical stores. Soon, even consumers who did not have the habit of shopping online started to buy everything over the internet.
The items whose sale was most affected were personal hygiene products and groceries. Disposable gloves, masks, and hand sanitizer led the ranking of best selling products. Nobody expected this sudden and considerably immense increase. It simply happened on its own.
Now let’s flip to the other side of the coin. Tourism and gastronomy were two sectors that were extremely negatively impacted, with a never before seen drop.
Where does the concept of scalability come in? Due to the fact that they could not function during quarantine, physical stores had to adapt quickly to survive. The only viable option was e-commerce.
Purpose + scalability: recipe for success
Many companies have already adopted the scalable business model simply because it guarantees a simple and accurate equation: great growth potential without a proportional increase in expenses.
In times of recession, a scalable model will ensure that your costs do not overshadow your revenue. If this happens, the financial deficit may be too great for the average entrepreneur, causing their business to go bankrupt.
These examples should help explain: The giants, Netflix, Facebook, and Amazon maintain high quality in the provision of their services, all while not increasing their production costs at all. And believe me: their revenue is on the rise.
You must be wondering: how this is possible? Remember in our other article where we talked about the power of purpose? Bingo!
The 3 companies understood the needs of their consumers and created deep relationships with them, becoming more and more of a protagonist in their lives. More than selling, they delight their customers and create passionate communities. All while expanding their operations in the market, of course!
Start now: 8 sure-fire tips for your business!
If you can see now the need for a scalable business, but do not know where to begin, we’ll give you 8 tips on how you can get started today.
Constant strategic redesign
This principle is directly linked to reality at MJV. We have been doing this for years through Agile Methodologies. It is essential to create a habit of constant replanning. Long term plans do not work in our current context, precisely because unforeseen events are happening and things need to be rethought all the time.
Here’s a spoiler: strategic redesign will be extremely popular in our new normal because most companies will have realized the importance of continuously redesigning and setting new goals.
Create an MVP
This idea is also linked to our reality here at MJV. It comes from Design Thinking, which is a pillar of our foundation. It is essential to be able to experiment, iterate, and take small risks, often.
If you have an idea, test it out on a small scale. Don’t expect everything to be ready for implementation immediately after testing, either. Test it, tweak it, test it again. Believe me, only then will these ideas evolve into full-fledged strategies. This mindset also helps when it comes to preparing for crisis and unpredictability.
Immerse yourself in Digital Transformation
Some companies have already taken their first steps on this journey, even before COVID-19, but many others are still chasing after losses.
New variables, such as the need for temporary social isolation, push companies towards the process of digital transformation. Additionally, the decentralization of their practices, routines, decision making, and so many other aspects define how they should operate now and in the future. It is necessary to know how to operate remotely, in a decentralized network.
RPA to automate your processes
Robotic Process Automation is the application of technology governed by business logic and structured inputs, aiming to automate business processes. Currently, it is among the main technological trends in the world.
Important! Whenever possible, automate processes to free your employees for strategic activities.
Make continuous improvements
You can only gain new customers and retain current ones if you make continuous improvements to your products and services. This is the giant leap forward for companies like Netflix, Facebook, and Amazon: they are always attentive to feedback and requests from their consumers. With their wishes and interests met, the consumption experience rises and you will have generated a faithful and passionate community.
Apply your purpose
We’ve touched many times on the power of purpose and how it needs to shine in all company processes. In the case of scalability, we go further. It is necessary for managers to be able to pass and teach the corporation’s productive process to each and every member of their team. This ensures the quick, easy, and safe expansion of the business.
Use the Cloud
We’ve already talked about how cloud storage is a solution worth prioritizing. Storage virtualization is essential to enhance important strategies, such as data-oriented management. And we go further: the cloud allows your company to be fully ready for expansion at any time!
The home office can help
Having a physical location for your company, when employees can work remotely from anywhere, can be limiting in terms of scalability. Having an office comes at a cost that can grow significantly if the company intends to expand its operations.
In the home office, employees continue to perform their duties, regardless of whether the company grows. Projects, customers, the brand, and consequently, revenue can continue to increase. But not the costs.
Moments of uncertainty serve as a catalyst for new processes. Many challenges have appeared – and continue to appear. Perhaps the biggest one lies in building the future – how to pave the way to success without an exact indication of what’s to come.
We know how uncomfortable the unknown is, as well as the vulnerability it poses. But historically speaking, these are the great catalysts for change.
For this moment of transition, the most important thing is to dive into the innovative potential of the unknown and create strategies to achieve your business goals. In order for your company to remain competitive and not lose speed in times of crisis, it is necessary to think about a scalable strategy.
One thing is for certain: change is already underway and there is nothing to do but follow suit. In this important moment of transition, we want to help you operate quickly and efficiently. Let’s talk about your challenges!