Strategy beyond COVID-19
As we emerge from this crisis there is an opportunity to ensure continued success for your family business.
Choosing the right strategy will be the difference between doing this in a way that is aligned to your values as a family, and coming across in a genuine way, compared to appearing as tone deaf and icky.
Jeremy Miller is a the Founder of Sticky Branding a branding and strategy agency based in Toronto, Canada.
Jeremy works with family businesses to help them to grow their brands. He used these techniques to grow his own family business before deciding to sell the business to focus on what he was passionate about.
In this episode we discuss branding, strategy and give practical and real examples of businesses who are positioning themselves to thrive in an ‘After-COVID’ world.
We also discuss succession and the role that the next generation can play in the future strategy of the business.
You can find out more about Jeremy here: www.stickybranding.com
If you would like to email Jeremy for his ‘Green Shoots Worksheet’ you can do so here: firstname.lastname@example.org
What we cover in this episode
Green Shoots are appearing
As we look outside its spring, we see the blossoms. There’s that vitality. The same feeling is returning for many businesses as we emerge from the global pandemic. Hope is returning to our mindsets and so the strategies that we apply to our businesses need to reflect the opportunities that lie ahead of us.
Introduction to Jeremy Miller
In this episode of the podcast I chat with Jeremy Miller of Sticking Branding. He has worked within his own family’s business and following the sale of that business now follows his passion for branding and strategy.
He is an author and speaker and a consultant but explains how the current COVID-19 situation has impacted on his outlook “I had a very visceral reaction to what happened with the coronavirus lockdowns”.
“I grew up in a family business, in the recruiting sector, and we would go up and down with the economy When this crisis started, I immediately saw the beginning of March that we were being thrown into a recession and all of my programming kicked in.
And so today what Sticky Branding does is we work with business owners and their teams to help them. First, recover the customers and revenue taken by COVID 19.”
The New World
We are emerging into a ‘new world’, and experiencing something that we have not experienced before. Whilst we can learn from previous crises, this current situation is one that has affected people and businesses all over the world.
“The first one is, that this is a very fluid situation. What I have found so stimulating on this is that the strategy models that we are applying and developing are evolving in real time, and what I’ve seen happening within our clients and in my own practices, is an acceleration of learning, development and application.”
“I would say, there’s a thinking that, that COVID 19 is an ‘agent of change’ and I would argue no, it’s not.
It’s actually an accelerant.
Many of the ideas and plans we had in place before this is just accelerated. We’re getting products to market what might have taken a year or are happening in weeks.”
“So new needs, the things that we are experiencing today. Today we’re having Zoom webinars and virtual conferences and work from home and on all of these different situations. Well, those are all new needs. But the thing that’s interesting is many of the new needs that are established today become tomorrow’s markets.”
“ I’ll give you a very brief example. The 2002 / 2003 SARS pandemic in China Caused millions of people to stay at home and have social distancing type restrictions like we’re having today, and so as a result, they embraced e-commerce a decade before the rest of the world. And that caused the rise of giants like Alibaba.”
“Every sector has green shoots of opportunity”.
Consider the knock-on effect in your own business, your consumers, your supply chain etc.
How much of the temporary behaviour we have seen over recent weeks is going to become, the new way consumers expect to receive goods and services?
A lot of the thinking around working patterns and ‘work / life balance’ as an example would say that people will be spending more time working away from their offices and spending more time in virtual meetings.
Because our behaviours as consumers will be changing as we emerge from this crisis businesses will need to adapt their own strategies, their own branding and messaging in order to be applicable as we emerge from this crisis.
Jeremy agrees. “So we have this acceleration issue, which I think has created the greatest entrepreneurial opportunity of our lifetime, multiple generations. This is one of the greatest moments, but within this, there’s so much complexity because this isn’t an economic crisis. This is a health crisis.”
“If you look at Maslow’s hierarchy of needs, it’s like we’ve been smushed down the entire triangle and we’re fearful, our safety concerns related to our health, our homes, our jobs, our wealth, have all been put on the line.”
There is a note of caution here though, Jeremy explains;
“The psychological switch is breaking so much of our marketing. Many brands are coming across as ‘tone deaf’ or opportunistic or worse, they’re just gross and icky.”
“This has created a fear for marketers and companies that they don’t want to market. They don’t want to sell, even though they have to. You’ve got to sell right now. This is the only way you’re going to survive. But there’s this fear of sales because you don’t want to come across as opportunistic and icky, which means you have to change your value proposition and your approach in order to navigate this thing well.”
Family businesses are well positioned to adapt quickly to the new environment. The longer term view on things allow families to put decisions into perspective around the long term strategy for the business. Utilising your families values in your strategy and marketing moving forward will set you aside from the competition.
“Again, this is, this is accelerant thing. So, family businesses before coronavirus had a competitive advantage because customers and consumers trusted family businesses more.”
“If you had a known family that was connected to the community, that was a more trustworthy company than say, a conglomerate or that faceless brand you want to, who do you want to work with?”
Jeremy goes on to state:
“But there’s a second layer that I would put onto this. The most effective way for any business not to be perceived as opportunistic or icky is by being helpful.
“What we have is this shared experience. Every company, every person from the around the world is going through the exact same thing at the exact same time.”
“So, the question I keep posing to people in crisis marketing is who needs your expertise and capabilities the most right now?”
“You could ask that question, how do we be helpful?”
“And from there you can identify, well, how do we adapt our products and services to serve that need? And then how do we sell that? And if you focus on that need of generosity and helpfulness, which is all part of your family values, then you will never be perceived as opportunistic and icky.
Your marketing will never be perceived as tone deaf and it will actually create a really strong level of engagement.”
An opportunity for the Next Generation?
There is a huge opportunity for the next generation to have real influence over the future strategy of their family business. Assuming that they want to be involved over the longer term, the decisions made now will help to shape the future of the business.
If the future leaders of the business are wondering if now is the time to stay quiet on their thoughts, we would suggest it isn’t.
“In my family business, my parents had a stated goal from before we joined the family business, that their job was to create next generation entrepreneurs.”
“They had no interest in gifting the company to my brother or I. They thought their responsibility wasn’t to teach us how to run their business, it was to teach us how to build businesses and, and so I feel eternally grateful for that because that has guided me ever since.”
“I think that the shame that we see is in many family businesses is that doesn’t happen, and the next generation are basically raised as caretakers and they become caretakers of the previous generations vision.”
“That can be lucrative, that can be beneficial, but today caretakers are at a substantial disadvantage.”
“Even if your company is leading and you’re making hand sanitiser and you’ve got the tiger by the tail, your competitors are in that same place too. And they have this accelerated mindset.”
“The companies who act first and adapt fastest have the advantage today.”
“In every family business, the question is not only within the first generation or the current generation, but in the next generation and your staff.”
“How do you drive that entrepreneurial agility and that warrior mindset into all facets of your business?”
“You have total permission to do that right now, if someone says, well, I don’t want to do that.”
“You go, “it’s COVID outside”, let’s get going.”
Jeremy’s comments remind me of the saying “because that’s how we’ve always done things around here”, this is one way to ensure slow demise for most businesses during normal market conditions.
Adopting that kind of mindset now going to leave those businesses very, very vulnerable to the world when we return to the ‘new normal’.
Is now the ideal time to start or accelerate the discussions around succession?
For many this pandemic would have bought into focus their own mortality, irrespective of how they feel about the virus and how healthy they may be. This is likely to prompt thoughts around succession and passing the business to the next generation.
Jeremy’s views are:
“You can exit, you can hibernate, or you can innovate. For some, hibernation has been a thought. So, you look at the restaurant industry and just what’s happening there and you can’t operate right now.”
“So, what do you do?”
“Do you exit, innovate or hibernate?”
“If your wealth is at risk and the length of recovery is going to force you to basically finance the business you haven’t had to finance for a generation, you have to ask the question, do we take the chips off the table?”
“Maybe we reallocate that wealth to the next generation? Maybe we come back later?”
Taking your chips off the table is a very viable conversation right now. I really am scared by hibernation, I think that is a form of gophering or turtling you put your head down and “it’ll get better”.
I don’t think it’s going to get better.
“You’re going to innovate. And that means your next generation really has to define us. Cause you could be looking at a two, three, four, five year a run rate. And if the next generation is in their thirties that’s prime ‘succession zone’. So, they need to be voicing what they want the business to look like after as they take control.”
Their voice now is more important than ever before.”
Has this polarised your feelings about your family business?
In my own work the conversations that I am having at the moment are looking at how the pandemic has polarised views of the family business within the next generation. Some are being drawn closer to the business. It is perhaps under threat for the first time in their lives and they are feeling an emotional pull to the business that in some cases is surprising.
In others they are looking at the current situation and they are thinking that they may be better suited pursuing a life away from the family business. There is no doubt that for a lot of businesses the next few years are going to be really tough and so being realistic and honest about whether you want to be part of the shaping of the strategy for the business, as a future owner or leader is really important at the moment.
Jeremy had this very discussion with his parents and this was facilitated by a family business adviser.
“I went through my succession process in roughly 2007 and we had a family facilitator come in and we were going through that and he posted me a question.”
“He said, “Jeremy, if your parents gave you a half a million dollars, would you invest it in shares in the business?” Being the eldest and person working in the business. My brother wasn’t in at the time. I said, yeah, of course. That’s what you do, I’m the eldest, so I’m gonna take over from my parents.”
“They need to retire.”
And he’s like:
“Well, that’s stupid!”
“Alright, thanks Tom. but he said, no, that’s really stupid investing logic. I’m like, okay. It’s like you’ve just been given a whole whack ton of money. How do you want to invest this? This is your inheritance. Nobody’s expecting you to buy shares in the business as you can do. Everyone. You can put it in the stock market.”
“You can buy a house. What are you going to do with it? So I took, some time and then, and thought about it and talked to an advisor and, and I came back to the Family Council and said, you know what, Mom and Dad, based on what I’m seeing in the market, I wouldn’t buy shares in your company. And in the HR recruiting sector, we were being disrupted by technology.
“And my dad was just starts clapping. I’m like, okay, so he felt relieved because now he didn’t have to steward us in. He had direction from me of what I needed. And so what happened was, that was, a clarifying moment. I, I felt really guilty. I’ve got to tell you that I was scared out of my mind to say that to my parents.”
“I thought I was letting them down and they, they were totally pumped”
“I sold the company in 2013 that commission allowed me to write my first book, Sticky Branding, and it allowed me to do what I want to do today, which is work with companies to grow their businesses and brands. But it was that decision. It was having that frank conversation and, and I think that’s what COVID has given us, is that accelerant moment that you can broach that conversation with mom and dad and say, all right, I heard this really cool idea.”
“If you gave me a half a million dollars, a half a million pounds, or even a million, whatever that number is, how would I invest it? If you were to say, I want to go all in and invest in the, in the business. That’s a very powerful conversation. If you were to say, you know what? I would go and be buying some Tesla stock right now.”
“That’s a very different conversation. So that is a, is it? But it’s about opening that door. The problem we have though, in a family business is it’s an emotional as well as a business conversation. And so often we need that outside facilitation to help navigate the conversation. And this is where that strategy piece comes in, is that the work that I do with families today is when, we talk about branding, one of the first questions I always ask is, are we branding and building a business strategy for succession, or are we doing it for an exit?”
“They’re two very different paths or two very different investment strategies. They’re two very different development strategies. When you talk of the mid market, it’s all about developing your leadership capability capabilities and your operational capabilities to operate at higher and higher levels.”
“But if you’re exiting. Different mindset. And so this succession conversation is something that should never be under the radar. I think parents need to be openly discussing their wants and needs, and children need to be openly discussing their wants and needs. It’s just a difficult conversation and we have to be cognisant of that.”
“Just look at that triangle. If you drew a triangle on the white board on a piece of paper, and you would exit, hibernate, innovate, which path do we want to go on and what are the ramifications of that and what does this mean to the family? What does this mean to our wealth? What does this mean to our employees?”
Before closing the show Jeremy shares another example of a family owned business adapting their strategy to the new business environment that they find themselves in.
“But what we have seen is this, this element of, of punching back. And, so I’ll give you an example actually, of an extreme example that should be way down, but it’s not.
“Element Fitness, which is one of Canada’s largest CrossFit and fitness facilities. And you would expect a place like that would be decimated in this crisis.”
“But let me just give you the stats so. As of two weeks ago, they have actually grown their revenue after the crisis within the first month. They maintained a 92% member retention rate paying full fee. So, $200 a month for fitness with a 9.8 net promoter score (9.8 out of 10 member satisfaction).”
“So, how did they do that?”
Well, Alex Severi, who is the founder, is a really sharp entrepreneur. He said to his team, first and foremost, “how do we recreate what’s magic inside of our facilities virtually?” So, how do we recreate the class experience online? But he did something that was also really powerful from a framing perspective.”
“He said, most fitness and gym facilities think of themselves as a rental service. Buy membership, you go, you pay your fee, you use their equipment, they leave. He said, we are in the coaching and community business, and so that gave them power to innovate. So they should be down like their competitors, 95% they’ve actually, they’re in the leading category.”
“So they did that. So like everyone, they put their programming online and they gave that away for free. That was table stakes in their mind, but where they innovate is they assigned every member, a dedicated coach that would do daily check-ins and calls. They did online classes. They, they run surveys constantly and adapt the programming, the initial assumption at the beginning of this was people want to have a short workout at home, get sweaty, and get all of your day.”
“It turns out people are really bored being at home, so they want longer, more community oriented things. So they extended their classes to an hour, and then they’ve also put all these community things.”
“So every night at 19.30, they have a different activity and these are often member led, so they have one member who teaches dance. They have a game night, a wine tasting night, and so like TV programming and prime time, and so all of this has, has opened up a huge opportunity, but you think of it, each of their gyms costs about $300,000 a year in rent and their revenue is increasing without using any of those facilities today.”
“So this has opened up a market that they see that their revenue, they anticipate the gym will be reopened again this summer. but they anticipate that these new online virtual programs, they give them new markets, new reach, new membership, new services. They’ll likely double their revenue out of this whole thing.”
How do you focus on the areas of need right now?
“Because right now today’s needs may be tomorrow’s markets, but it’s also, how do you be flexible and agile in your thinking rather than saying, this is what we did before coronavirus, let’s look out to the landscape on looking for green shoots, attacking them and being of immense service and value. And if this appeals to you, we have a little worksheet of Sticky Branding called the ‘Green Shoot Worksheet’.”
“So, if anyone’s interested, just send me an email at email@example.com and just put ‘Green Shoot Worksheet’ in the subject line so I know what you’re asking for and I’ll send it back to you. And it’s a simple tool that allows you to look at a market, look at the state of it, identify a need and then how do you adapt your products and services to fit that need?”
“And you can continue to just do that, that exercise again and again and again throughout this crisis because this is a fluid situation. Today’s needs will evolve in June, July, September, January, et cetera.”
How can you find out more about Jeremy and Sticky Branding?”
“The easiest way to find me is just ‘Google’ Sticky Branding.
“My website is http://www.stickybranding.com. I’m on all the social networks @stickybranding. And the book, my first book at least is called Sticky Branding, and that’s on Amazon and again where books are sold.
Just Google Sticky Branding. That’s a long, long winded way of saying how to find me.”