How Corporates Can Calm Stormy Crises

Managers have several ways to stop stormy crisis

When a crisis whether internal or external strikes a business as has Covid-19, managers often scramble to contain the situation and avoid financial bleeding.

The way they go about this may differ but it basically boils down to two approaches – beachhead strategy and spray and pray or a mix of the two.

Beachhead is a concept coined by military strategists where an army focuses its strength and resources on winning a strategic small border area (the beachhead) which then becomes the stronghold from which to advance into the rest of the territory. When applied to a business context, an enterprise chooses to focus its resources on a small market area or a product category to turn it into a stronghold before expanding to the broader market.

Spray and pray, on the other hand, is the opposite of beachhead strategy. This approach is more general, ‘spraying’ resources and efforts and ‘praying’ that the target would somehow be hit. The proponents of this strategy often look to increase their chances of finding the secret sauce from a cocktail of efforts. They choose not to limit themselves by broadening their scope unlike beachhead supporters. This is especially common during unforeseen crises when managers are at a loss on how to handle the situation. During a crisis, the natural approach tends to become trial and error. Some would say experimental, the goal being to increase the probability of success amid uncertainty.

The question is: of the two strategies, which is the most effective during a crisis?

It helps to understand that beachhead managers often respond to a crisis by offloading non-performing assets, folding non-core business lines and trimming staff costs to free up cash. This leaves them with only the core business line and assets to worry about and a lean human resource that is easier to manage and compensate.

Several businesses have walked down this austere path during the pandemic with different stories to tell. Their main goal was to ring-fence their respective areas of strength (beachhead) and shed off deadweight amid the fallout from the virus shock. To this end, the beachhead concept is applicable not only to business growth strategies and models but also to response to crises.

On the opposite end of the spectrum are the ‘spray and pray’ executives who having weighed the options on the table decided all were as important in ensuring survival and stronger recovery for their enterprises.

Besides, they felt that leaving any option off the table could later come back to bite them should the option work out for their rivals.

And so they scattered their resources and efforts to the four winds to increase their odds of catching lucky breaks during the downturn. Subscribers of this school of thought have different stories to tell too regarding the outcome of their approach.

Yet for some, a blend of the two strategies became their sweet spot. They trimmed their expenses to stay afloat and still explored new horizons for likely opportunities presented by the crisis.

Regarding which approach takes the cake when it comes to steering a business to safety during a raging storm, the jury is out there. The key is that each organisation has to choose whichever strategy that they believe could work for them based on their industry dynamics, resources available, vision of the board and company policy.

This applies to business growth strategies as it does to communication and marketing campaigns. A firm has to research and decide which messaging approach would produce the biggest bang for their buck between beachhead and spray and pray marketing.

As the virus wave appears to slowly recede after violently rocking the globe early this year, finding stronger recovery pathways in this uncharted territory is clearly a top priority for most corporations and economies. But this focus should not be limited to protecting capital reserves and bottom lines only.

Efforts should also be directed towards social and environmental goals. Following the pandemic that caught almost everyone unawares and with increasing effects of climate change, the concept of triple bottom line – planet, people and profit – should take centre stage. Businesses should strive to tick all the three sustainability boxes throughout their entire value chain.

On the policy side, environmental and social targets should be made a part of job description set out for executives and managers. Consumers, on their part and besides observing responsible consumption, should be demanding of corporations to conduct their operations in a sustainable way, with a long-term consideration for future generations.

This article was originally published by the Business Daily


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