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5 Reasons you Need a Crisis to Drive Transformation

crisis

5 Reasons you Need a Crisis to Drive Transformation

There’s a saying that a crisis is a terrible thing to waste. What it actually represents is an opportunity–and the space–for change that normally isn’t available. Here are some of the key hurdles that usually stand in the way of change:

1. Change is uncomfortable

More to the point, the status quo is comfortable. We all take comfort in our routines, whether it’s a particular procedure for closing the books, taking comfort in a familiar organizational structure and close colleagues, or simply repeating the same stretches and workout routine every morning. Breaking out of that comfort zone is both difficult and not always seen as providing worthwhile rewards.

2. Incentives aren’t aligned

Every department and partner is driven by different objectives or KPIs. Revenue teams want to hire ahead of predicted growth, while finance wants to see proof, first. Companies with complementary capabilities to yours want to explore building the adjacent capabilities you deliver, rather than investing in partnerships. Suppliers and buyers are more invested in building long-term relationships and goodwill than in making sure every payment and collection is right on time. Without aligned incentives, finding a way to work together toward new and positive outcomes becomes arduous.

3. Stay in your lane

Teams tend to stay in their own swim lanes to avoid change. The tax department will keep to themselves, as will the invoice processing team. They have little need to talk to each other. If they need to align processes or computer systems, for example, they work methodically through that alignment, raising every possible objection and potential hurdle. The goal is to ensure the solution is correct, of course. But wading through the red tape of heavy opposition also serves to minimize change.

4. Competing incremental initiatives

In prosperous times, there are many attractive opportunities for an organization to invest in growth. From management’s point of view, focus is difficult to maintain and it becomes too easy to spread capital and management attention too broadly. Because there are many “easy wins,” more incremental, yet proven, ideas tend to fill up the investment budget.

5. If it ain’t broke don’t fix it

Persuading others to make changes is harder when the economic sea is calm and fortunate winds fill your sails. By definition, a crisis breaks things, and the fixes required can provide the impetus for changes that would be seen as too radical under normal circumstances.

Since you read this far, I’ve got two bonus reasons that you need a crisis to drive change:

6. A lack of momentum and energy

Those of you who remember chemistry class might recall that a chemical reaction requires energy to start, even if it releases energy overall in the course of the reaction (if no energy was needed, the reaction would have happened already).

A very similar logic exists for making major changes in a business. Although the outcome on the other side of the change might be a better situation compared to the status quo, it’s hard to get past the energy required to make a change.

7. The process doesn’t allow for change

Think about procurement processes, for example. For many large organizations, purchasing anything requires a request for quote (RFQ) from at least three pre-qualified vendors and a formal tender process. It’s a very prolonged, and actually quite inefficient, exercise.

What many enterprises often don’t realize is the ease with which adapting to a crisis can turn a seemingly untenable situation into an opportunity to thrive.

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Uri Kogan is VP of Product Marketing at AppZen, the world’s leading AI platform for modern finance teams

relevant

How Businesses Can Avoid Becoming Irrelevant In A Changing World

The business world has produced a veritable graveyard of once magnificently successful companies that came, conquered and thrived – but ultimately perished.

In many cases, those businesses share a common reason for their demise: Times changed. They didn’t.

“I’ve always been fond of the saying that if you don’t like change, you’re going to like irrelevance even less,” says Adam Witty, a successful entrepreneur and the ForbesBooks co-author of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant.

“Over the years, many businesses discovered they didn’t change quickly enough, much to their chagrin. Others realized their old business model no longer applied, and they did adapt.”

In the last decade or so, media companies especially have had to navigate their way through an extraordinary disruption of their business models, says Witty, who also is the founder and CEO of Advantage|ForbesBooks (www.advantagefamily.com).

“Reading habits and advertising habits shifted,” he says. “This meant media companies needed to diversify and be innovative if they wanted to continue to thrive.”

Witty was involved in such a diversification recently when his company announced a partnership with American City Business Journals, the publisher of 44 weekly Business Journals in cities across the U.S. Through the partnership, American City Business Journals is branching out into the book-publishing field with the creation of Business Journals Books, an enterprise that will be operated jointly with Witty’s company.

“This is an exciting new way for them to be creative and create a new revenue stream for their business,” Witty says.

With COVID-19 and the 2020 recession forcing companies to navigate their way through even more changes, Witty says businesses that want to avoid tumbling into irrelevance need to:

Review and rank their products. A few years ago when Witty’s company did such a ranking, he realized one product line the business had offered for years didn’t measure up and needed to go. “It was hard to deliver, had low gross margins, was extremely people intensive, and had very limited scalability,” he says. “The time, energy, effort and capital we were investing in this product line were taking away our ability to invest in new products that would be more scalable and more profitable.”

Always be on the lookout for new ideas. What worked yesterday may not work tomorrow, so savvy business leaders are always open to new ideas for bringing in revenue, Witty says. “You should also encourage employees to suggest ideas,” he says. “Maybe a lot of those won’t work. But the more ideas that get tossed around, the better the odds something will prove a winner.”

Favor facts and data over opinions. No matter how much an entrepreneur loves the business plan they used originally to launch their business, they need to make decisions about the future based on facts and data, Witty says. “You must deal with the way things are, rather than the way you want them to be,” he says. “Facts and data will tell you the way things are.”

“Because of COVID-19 and the recession, a willingness to adapt to changing consumer habits and ways of doing business is probably more important than ever,” Witty says. “The businesses most likely to thrive coming out of this are those that have a plan, but also remain flexible and are willing to change that plan as the circumstances around them change.”

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Adam Witty, co-author with Rusty Shelton of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant, is the CEO of Advantage|ForbesBooks (www.advantagefamily.com). Witty started Advantage in 2005 in a spare bedroom of his home. The company helps busy professionals become the authority in their field through publishing and marketing. In 2016, Advantage launched a partnership with Forbes to create ForbesBooks, a business book publisher for top business leaders. Witty is the author of seven books, and is also a sought-after speaker, teacher and consultant on marketing and business growth techniques for entrepreneurs and authors. He has been featured in The Wall Street Journal, Investors Business Daily and USA Today, and has appeared on ABC and Fox.

essential business

4 Factors to Consider Before Buying an Essential Business in COVID Times

The shutdowns and rollbacks of businesses due to the COVID-19 pandemic continue to play havoc with the U.S. economy. But the least-affected businesses during the crisis, for the most part, have been those deemed “essential” by state and local governments, allowing those companies to remain fully operational or close to it.

Meanwhile, with the idea that essential businesses can be recession-proof and even boom during a public crisis, buying one is becoming a more attractive prospect for some people, says Chris Buitron, president of Mosquito Authority® (www.mosquito-authority.com).

“Our current economic challenges as a nation are showing that owning an essential business can be a solid financial strategy for an individual,” Buitron says. “They are practical purchases. They are not often glamorous businesses, but they make sense largely because they offer services that are currently in demand, and as such they can weather economic downturns.

“Some essential businesses, such as ours, are busier than ever as people are trying to maintain social distance by staying home and not taking many vacations. People consider protection from mosquito bites and the diseases they carry as a high priority for their family’s health and outdoor enjoyment. Like other essential businesses, our franchisees provide measures of security and comfort, allowing people to enjoy being in their yards at a time so many are cooped up inside due to the pandemic.

“And at the same time, all kinds of essential businesses provide ownership opportunities while millions of unemployed people are looking for new opportunities or new career tracks. Perhaps they’re looking to be their own boss and to have more control over their financial future.”

Buitron suggests considering the following when weighing whether to buy an essential business:

Focus on successful types of essential businesses. Among the essential businesses  that have the potential to succeed even during difficult economic times are: delivery services, grocery stores, convenience stores, e-commerce, gas stations, cleaning services, liquor stores, auto repair, lawn care, pest control, mailing/shipping services, and contracting. “The pandemic may be with us for a while,” Buitron says. “People will be home more often, and businesses that can service their needs while home will gain customers.”

Consider franchises as ownership opportunities. While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs, and franchises annually employ 9 million people in the U.S. One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you. Reach out to other franchise owners to get a sense of the company’s commitment and support.”

Know a bargain vs. a bad investment. A relatively low sale price tempts some people into making a poor buying decision on a business. Buitron says it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.

Be sure you’re up to owning a business. “There are no guarantees with owning an essential business,” Buitron says. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”

“Owning an essential business brings with it the satisfaction of providing necessary services for people,” Buitron says. “In these times especially, that’s a noble pursuit.”

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Chris Buitron is president of Mosquito Authority® (www.mosquito-authority.com), a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).

remote work

Should Companies Rush Headlong into Permanent Remote Work?

New research from Stanford shows 42% of US workers are working from home full-time. After a successful transition for COVID-19, more and more tech companies are allowing their employees to work remotely for the foreseeable future. Twitter recently announced that most of their employees may continue working remotely as long as they want to. And 4,000 Nationwide Insurance employees recently became permanent telecommuters.

The benefits of an all-remote workforce are considerable and fairly easy to measure. But are we losing something equally important by ditching the office and in-person work?

The four benefits of all-remote work

When real estate startup Culdesac announced they were giving up their San Francisco headquarters, co-founder Ryan Johnson tweeted: “Remote work is going great for us.” Google, Facebook, and Zillow recently told their employees that they could continue to work from home until 2021. Google recently abandoned more than two million square feet of planned office space. “Our bias against working from home has been completely exploded,” Dan Spaulding, Zillow’s chief people officer, said. Zillow is “not seeing any discernible drop in productivity.”

Here are four reasons companies are ditching their offices for all-remote workforces.

1. Offices are expensive

According to commercial real estate firm Cushman and Wakefield, companies have been pushing more workers into less office space for years. Packing everyone in came at the cost of minimizing distractions, which is consistently the top driver of employees’ ability to focus on their work.

Not only that, but until there’s an effective treatment and/or vaccine, these uber-dense offices aren’t going to cut it. Spacious offices with thermometers, hand-sanitizer stations, phone sanitizer stations, new HVAC systems, touchless systems, and more they need to be safe are going to cost even more.

As we enter a COVID-led recession, Kate Lister, president of consulting firm Global Workplace Analytics, predicts that investors are going to insist that firms cut costs. Letting go of office space accomplishes this without cutting headcount.

2. Offices are distracting

Going all-remote not only saves companies money on office space, but also can lead to fewer distractions and more focus for workers.

A few stats:

–The average company sees a 10% to 43% increase in productivity after going all-remote.

–In a recent survey, 54% of workers said their productivity had improved since working from home full-time.

–64% of workers said their work quality has improved.

3. Commutes are terrible

Americans spend 30 billion hours commuting every year. Long commutes are one of the main reasons workers say they want to work from home. Research shows longer commutes are associated with obesity, high cholesterol, high blood pressure, back and neck pain, divorce, depression, death, political disengagement, poverty, absenteeism, lower productivity, and even pregnancy complications. Long commutes also exacerbate pollution and climate change.

4. Talent is distributed

Firms that hire remotely can access far more talent and may be able to offer lower salaries. Currently, Facebook is paying employees based on their geography’s cost of living. It may also make it easier for teams to meet their Diversity, Equity, and Inclusion goals. For example, it’s easier to employ people with disabilities when you don’t have to worry about office accessibility. Companies with greater gender diversity are 15% more likely to be high performers, according to one study. Companies with greater ethnic diversity are 35% more likely.

Drawbacks to all-remote

Remote work isn’t without its drawbacks, including loneliness and boredom. In addition, we found that many workers are having more meetings and working longer hours after going remote. There’s evidence that full-time remote workers have a harder time problem solving and being creative than their in-office peers. Many contend that it’s easy to overlook the value of the spontaneous ideas and networking that in-person coworking facilitates.

“Many companies are jumping into ‘remote-first’ too head-on,” said Can Duruk, Product Manager and co-writer of The Margins newsletter. “Once people burn through the accrued social capital you will see productivity drop as relationships decay, new hires not gelling well, etc.”

Futurists have long predicted that as telecommuting became technically feasible, firms and workers would abandon high-cost cities. Research shows that physical co-location is still valuable enough to justify the rents.

One interesting criticism of all-remote teams is that trust and social capital are hard to establish and maintain over distance. As trust and social capital are measurably associated with higher performance, will we see performance dip as they erode?

“We are operating under the assumption things won’t deteriorate and we are making these sweeping changes without much data,” Can said.

More broadly, some fear that widespread adoption of the all-remote model will finally lead to the long-predicted de-urbanization. A move away from large cities would have negative impacts on the environment. Urbanites use less electricity, drive less, and spend about $200-$400 less on electricity each year compared with suburban dwellers.

Plus, people who live in cities have more access to health care, employment, and education.

Alternative models to all-on-site and all-remote work

Workers tend to be happiest and most productive when they have the freedom to live where they want and choose how to organize their time.

This is in line with a Gallup poll showing that just 40% of Americans who are currently working from home are excited to go back to working in their office full-time. Nearly 60% would prefer to work remotely “as much as possible” going forward.

Within a couple of years, Kate Lister from Global Workforce Analytics predicts that 30% of workers will work from home a few days per week.

“I’m partial to what Stripe is doing,” Can from The Margins said. “Treat remote as a hub to position it to succeed, ensure people are available in the same time zone. Seems gradual enough to be low-risk, discrete enough to measure and tangible enough to support.”

The major downside to the split-office model happens when some workers are working from home full-time. Those workers are going to have a different experience than workers who come into the office, even occasionally. Remote workers may have trouble establishing relationships, getting put on the right projects, and getting promoted.

“It’s important that we are conscious of this situation if we want our high performers, wherever they may be, to be recognized for their excellent work,” writes CIO Contributor Dan Mangot. “Similarly, we need to make sure that those who are struggling, get the support they need so they can continue to be valuable members of our organizations.”

Going forward

While the benefits of going all-in on remote work are considerable, it’s also worth considering the drawbacks. For many workers and many companies, a staggered or split-office approach may work best.

To learn how to transition some workers back into office work, check out 6 tips for transitioning into a split office setup.

change

5 Reasons Company Leaders Resist Needed Change – Even During This Crisis

The thought of change can be scary, even more so during the type of crisis we’re experiencing now with the COVID-19 pandemic. Although there are business leaders who are already implementing change in response to the challenging economic and operational landscape, many others are not.

“Sometimes the writing is on the wall and organizations are triggered to change,” says Edwin Bosso, Founder and CEO of Myrtle Consulting Group and the ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey. “In fact, members of the organization often are keenly aware that something needs to be done. However, despite that, management does not act, and the cost of inertia can be high.”

According to Bosso, there are five reasons why leaders resist change and, as a consequence, struggle to move their company forward:

They confuse important versus urgent. Leaders sometimes confuse the terms important and urgent. “Important issues are those that do not necessarily have an explicit deadline, like urgent issues, but can effectively have some impact, large or small, on a business,” Bosso says. “The confusion sets in when owners and managers spend too much time putting out fires rather than planning. For example, the company may know that it is important to upgrade its operations. But it doesn’t become urgent until later on when the company looks at the output of its competitors that have completed transformation projects and have become a lot more cost-competitive.”

They lack courage/leadership abilities. Successfully initiating and executing a change process involves numerous leadership skills. “It can be intimidating taking on such a challenge that, to some leaders, may seem like moving a mountain,” Bosso says. “Others are better prepared to take risks, confront reality, envision a better way, make plans, and then act on those plans to lead a change.”

They misalign the incentives. The incentive to change or transform organizations can be misaligned with the incentives of people who are in charge of leading those transformations. “Misalignment of personal incentives can cause us not to act, even when we know it’s the best thing for the company,” Bosso says. “When we are in line for a promotion and higher pay, we certainly don’t want to take on risks that can potentially work against us.”

They lack support and/or resources. Not being afforded the requisite tools or the consensus for necessary transformation can leave a leader feeling powerless. “This is a set of obstacles that many leaders run into,” Bosso says. “The powerlessness can come from the lack of company means, organizational backing, human capital and resources to support the cost of a transformation. After a while, they run out of energy, or time, to make the case.”

They lack a method. It’s not uncommon for leaders to know the difference between where their company is and where it could be, but they don’t know how to proceed. “In such situations, leaders often freeze up and put off the impending need to change, or they approach it through trial and error,” Bosso says. “Having a methodology is beneficial when taking on such an effort. Some leaders take the time and effort to learn what needs to be done, while others bring in experienced people to provide a method for leading a smooth and successful transformation.”

According to Bosso, leaders must understand that there will never be a perfect time for change, but also that often the right change only happens if they force the issue.

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Edwin Bosso, the ForbesBooks author of 6,000 Dreams: The Leader’s Guide To A Successful Business Transformation Journey, is the founder/CEO of Myrtle Consulting Group (www.myrtlegroup.com). Bosso specializes in operations improvement and change management, and his project history includes work for major brands such as Heineken, Texas Petrochemicals, T-Mobile, Anheuser-Busch, Rohm and Haas, Campbells Soup Company, Kellogg’s and Morton Salt. A wide range of assignments has taken him throughout Asia, Europe, and North America. He completed his undergraduate education at The Hague Polytechnic in the Netherlands and earned an MBA from Rice University in Houston.

consumers

Will Consumers be in a Better Place by the End of 2020?

The pandemic unleashed a staggering one-two punch on the economy – double-digit unemployment and drastically reduced revenues for many businesses. As states reopen with varying restrictions, what the future holds in the next six to 12 months is anybody’s guess.

But while the economic downturn will continue to impact consumers and businesses indefinitely, it could have been even worse, says Ron Oertell, Chief Financial Officer at LendingUSA, LLC.

“Given the high unemployment rate, there was a very strong concern out there as to what short-term effect the pandemic would have on the consumer,” Oertell says. “The surprise has been that consumers have been relatively stable in paying their bills. That has been driven in part by public policy decisions such as the stimulus payment plans and the government stepping up in a strong way.

“In past crises, the government has walked solutions into the crisis. This time they have run to fix the problem from many different aspects. From a consumer finance side, deferments and defaults are lower than some of the initial estimates. However, there is a strong concern that we’re not out of the woods yet. We still have a very high unemployment rate. And nobody knows how long it’s going to take for the true economy to recover and for the marketplace to drive strong consumer performance.”

Oertell gives his outlook on key issues facing consumers as the nation tries to get back to work during the pandemic:

Tightening lending. With unemployment remaining high, many people seeking loans or credit may find both harder to secure. “I do believe it will be a challenge for many people to obtain credit,” Oertell says. “There will be an undersupply of credit and bank-backed funding for individuals who are unemployed. When the economy was strong, credit was relatively easy to obtain, but now lenders are cutting credit limits on some current customers and making new credit more difficult to get. The country went from its lowest unemployment rate in many decades to its highest in 90 years, and banks are showing they are nervous.”

Government support. If more consumers are denied credit or loans, where will they turn? “Much will depend on the actions of federal and state governments,” Oertell says. “If governments and lenders continue to provide unprecedented support to individuals through payments and/or expense relief measures, such as mortgage payment moratoriums or the halting of eviction proceedings, then I do not see personal bankruptcies rising significantly. The speed of the recovery will be critical in determining the effect of the high unemployment rate on the number of bankruptcies. “A theme many have recently expressed is the confidence in the government to continue forms of consumer support through the election period. However, such governmental actions cannot continue indefinitely. When consumers are denied traditional lower-cost credit, many will turn to higher APR lenders or non-traditional forms such as title loans to cover unexpected or emergency life events.”

Consumer debt. Recent reports have indicated consumer debt is down as a result of the pandemic and people drastically reducing their shopping. What impact could that have on people getting credit? “A reduction in shopping could reduce an individual’s request for credit as well as reduce outstanding balances on credit cards,” Oertell says. “Traditionally, both factors would increase availability based upon standard underwriting metrics. However, many lenders have placed hard cut-off rules based on employment status and other factors, which would more than offset any benefit from the reduction in shopping. Over the next few months, lenders will continue to deal with the uncertainty of future credit-worthiness when traditional indicators of payment behavior are distorted and capacity to pay in is highly uncertain.”

“Consumers are facing very challenging economic times, but the long-term impact of the pandemic on the credit markets isn’t close to clear,” Oertell says. “How many businesses are fully functioning, and whether the unemployment rate is substantially lowered, will be the key things to watch in the next few months.”

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Ron Oertell is Chief Financial Officer at LendingUSA, LLC, a consumer lending company focused on physical point-of-sale locations. He has more than 25 years of experience as an attorney, investment banker, investment fund manager and CFO, and has completed over $9 billion in capital transactions.

trade shows

The Future of Trade Shows in a Post-COVID-19 Fashion Industry

The fashion sector woke up recently to yet another trade show cancellation – the newly launched footwear show Sole, due to take place in August after its February success, announced that the decision had been taken to cancel for now, with 2021 dates to be announced soon. And today, Hyve Fashion has announced that their upcoming events Pure, Pure Origin, Scoop and Jacket Required will also be cancelled until next year. They’re just another in a long line of cancelled shows this Summer, including Premium Berlin, Modefabriek, Tranoï and Scoop International to name but a few.

There are some, perhaps more optimistic platforms, which have simply postponed their dates to later in the year, but there is a real sense in the industry that things might not go back to the way they were before. There is a universal feeling of uncertainty – lockdown restrictions are being eased, but with mixed messages from governments throughout the world, the idea of visiting exhibition centres packed with thousands of people from all corners of the globe is less than appealing for many.

TradeGala works with thousands of small boutique owners and, of those that we surveyed, 66% responded that they had no plans to attend a trade show for the rest of 2020. But if the very foundation of the industry is under threat, what will fashion buying and selling look like in a post-COVID-19 world?

In the short term, some of the major players are experimenting with technology and virtual reality to continue reaching their target audience. Shanghai Fashion Week was first to take the step into the unknown, holding their first fully digital event in April, while London’s famous Fashion Week followed suit with a virtual showcase in June.

Experimentation was the order of the day, with everything from live-streamed, green-screen catwalk shows to 3D virtual reality design galleries. Despite some detractors who found the new format somewhat lacking, and a few technological glitches throughout, both events were considered a success, and Paris is planning to host their first virtual events in July. Independent trade shows are also dipping into the digital world with Modefabriek launching an online B2B marketplace in July to showcase the collections from their cancelled event, while collaborations are emerging with Coterie, Magic and Project to launch “digital tradeshows” in August and September.

But won’t things all just go back to normal eventually? If we’re honest, do we really want to go back to the way things were before? Perhaps it’s about time we embrace the ways that technology can enhance our analogue experience. Why should brands and buyers be obliged to travel internationally (investing stretched budgets and increasing the fashion industry’s already heavy burden on our carbon footprint) when we have the option to reach out and connect via the web? London Fashion Week is already planning their next event in September as a virtual/real-life hybrid (lockdown restrictions permitting) and looks to continue this trend indefinitely – perhaps this is the future of trade shows as we know them?

At the end of the day, we’re tactile creatures, and there’s nothing quite like being able to see and feel a satin dress or leather handbag when considering our next season’s stock. But as bulk forward-ordering is no longer the only option (and a risk many buyers no longer wish to take), retailers will still have the option to attend one or two shows a year to source new brands or trends while supplementing their stock more regularly with suppliers online. This is where TradeGala can make a difference.

A year-round “virtual tradeshow,” TradeGala showcases brands throughout the world offering short-order stock for instant purchase. A user-friendly platform, it allows buyers to respond quickly to the changing trends and offer their customers what they really want to buy, rather than speculating months in advance.

One day soon, we hope, we will be able to attend our favorite trade shows as we did before – sourcing, networking, finding inspiration. Our Trade Show Calendar is regularly updated with upcoming shows throughout the world (both virtual and physical) and you can subscribe for the latest updates, so you won’t miss a date! But the future has come more quickly than we expected – is your fashion business ready to embrace the digital revolution?

Aristotle

How Aristotle Can Help You Lead Your Business Through Tough Times

Business leaders face plenty of questions as they try to get a handle on the new economic reality brought about by the COVID-19 shutdown and the resulting recession.

But the answers to those questions may not appear in their corporate handbooks. Instead, they could lie in ancient philosophies with lessons that apply just as much today as they did centuries ago, says Cristina DiGiacomo (www.cristinadigiacomo.com), author of Wise Up! At Work and founder of MorAlchemy, a philosophical consulting firm that helps CEOs and executives tackle their biggest challenges by teaching them how to think differently so they see new solutions and their companies thrive.

“We could all use a little wisdom these days because COVID-19 has caused a shift in the way people think, the way people work, the way they live and how they think of themselves,” DiGiacomo says. “Technology may change, culture may change, but acting wisely is no different in the 21st century than the 5th century.”

Too often, when people hear words like philosophy and wisdom, they conjure images of a bearded man on a mountain, with enlightenment seekers trekking to see him, DiGiacomo says.

“In reality, the philosophers whose teachings changed the world were the kind of people who rolled up their sleeves, got to work, dug deep, and spoke up despite hardship, resistance and even threat of death,” she says. “Their views aren’t some abstract idea but have practical applications in today’s world.”

So, if Aristotle, Socrates, Voltaire and Immanuel Kant opened a corporate consulting business, here are a few things they would tell you about moving your business forward as the world tries to recover from COVID-19:

Don’t be rushed into rash decisions. Voltaire said “doubt is an unpleasant condition, but certainty is absurd.” Sometimes CEOs feel the need to make quick decisions, perhaps to avoid seeming indecisive. That’s not always the best approach, DiGiacomo says. “Are you making critical decisions, with long-term consequences, on the fly without actually having developed your ability to deliberate?” she asks. “Our reactionary mind wants us to set it and forget it, so it can move onto the next thing.” Resist that temptation.

Avoid letting your “darkest moments” color reality. Immanuel Kant, among others, believed your mind shapes and structures your experience. “Your mind influences to a very large degree how you see the world and how you feel about it,” DiGiacomo says. “Those things you say to yourself, in those darkest moments, are shaping your reality. But it’s entirely possible that those thoughts you have about what you think reality is might not always be true.” She says it helps to “hit the pause button” and make sure the situation is what you think it is.

Say “I don’t know” even if you think you know. The country faces uncertain times over the next several months, but that’s not unusual, DiGiacomo says. The future is always uncertain – coronavirus or no coronavirus. One of her favorite quotes from Socrates is: “I know that I know not, and that makes me a wise man.” DiGiacomo says being in “I don’t know” mode releases your mind to discover new solutions and ideas. “If you constantly believe you know everything,” she says, “then there’s no impetus for your mind to be creative or continue to look for new information.”

And finally, DiGiacomo says, Aristotle offers encouragement for business leaders who are afraid they aren’t up to the task of making wise decisions. “Aristotle’s foundational idea of being human is that we are all wise, inherently,” she says. “It’s just a matter of tapping into that innate wisdom and building the skills that will help you to not only be wise, but to act wisely.”

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Cristina DiGiacomo (www.cristinadigiacomo.com), author of Wise Up! At Work, is the founder of MorAlchemy, a philosophical consulting firm. She also is the inventor of industrial philosophy and is the driving force behind the idea of applying philosophy in the workplace for the benefit of the leadership of organizations. DiGiacomo has 20 years of corporate executive experience at companies such as The New York Times, Citigroup, AMC Networks, and R/GA. She holds a master’s degree in Organizational Change Management from The New School. She also dedicated nine years to the study and practice of philosophy.

risk mitigation strategies

Moving Past COVID-19: Risk Mitigation Strategies to Drive Supply Chain Resilience

As the world begins to ease movement restrictions imposed during the COVID-19 pandemic, companies are wondering where they go from here and how they can reduce risks moving forward.

These questions are especially relevant to supply chains, as the pandemic disrupted trade flows across borders, from raw materials to finished products. The initial decline in production in China rippled across the world, as the country sits at the heart of many global manufacturing networks. As the virus spread west, more nations instituted lockdowns to protect public health, leading to an increase in factory closures and a sudden drop in consumer demand.

The shock to the global economy was breathtaking in both scope and speed. The search for efficiencies within disrupted supply chains is now driving organizations to look at the lessons that can be learned, in order to better manage and mitigate risk of disruption from future events.

Before you develop risk mitigation strategies, you have to first understand how your suppliers were affected by the pandemic. Are they considered essential? Did they have trouble sourcing raw materials or run low on critical inventory? Did they suffer a shortage of labor due to workers falling sick? Did they face transportation issues?

Once these questions have been answered, then you can start developing and implementing risk mitigation strategies: from immediate actions to enhance supply chain resilience and reduce future supply bottlenecks, to longer-term strategies that require a greater investment of time and resources.

Short- to Medium-Term Strategies

1. Develop a supply chain risk monitoring program

If not already in place, companies should integrate risk management into their supply chain, sourcing strategies and ongoing category management processes. A comprehensive risk monitoring framework should capture the following key elements:

-Understanding the critical risk-prone categories and level of risk across the supply chain

-Regular monitoring of different risk types across suppliers – going beyond just financial indicators, to cover operational, compliance, strategic and geographic risks

-Scenario and contingency planning for unforeseen situations

2. Identity alternative logistics partners for future contingencies

Companies trying to recover from economic lockdowns will face hurdles in shipping markets roiled by deep capacity cuts and weeks of disruption. Airfreight could be constrained for months as airlines continue to operate reduced schedules. Identify and qualify alternative logistics providers to mitigate service failures by an existing partner.

3. Shift supplier base to other low-cost countries

The drop in exports from China in the first quarter led to a significant increase in sourcing from other countries for many product categories. American and European manufacturers started sourcing raw materials and goods from low-cost countries such as India, Vietnam, Bangladesh and Turkey. A diversified geographical sourcing strategy is an effective way to ensure supply chain continuity. Larger companies are leading the charge in this respect: Apple, for example, recently pledged to invest more in Vietnam.

4. Adequate focus on ensuring compliance with new regulatory norms

Companies need to assess new regulations put in place by regulatory bodies across the globe, and identify those that impact their supply chains, manufacturing processes or end products. Dedicating time and resources to reviewing and adapting existing procedures will be critical to ensure compliance with the latest requirements.

Long-Term Strategies

1. Implement a Direct-to-Consumer (DTC) model for uninterrupted supply

COVID-19 has affected many e-commerce businesses as well as how consumers shop. Brands need to be agile and able to move at speed to find and meet demand. Many B2C businesses (and their partners) are pivoting to a direct-to-consumer model because it helps strengthen brand loyalty and increase consumer confidence in terms of certainty and guaranteed supply of goods and products.

2. Develop alternative supply chains

Developing new supply chains in collaboration with respective governments can ensure faster delivery of key raw materials. Further, to avoid supply chain disruptions arising from factory shutdowns in the future, companies can develop a manufacturing network strategy that leverages government economic development programs that encourage domestic production.

3. Consider supply chain digitalization supported by automation

The coronavirus crisis may be a tipping point in the transition to digital platforms and applications that help establish an interconnected network of supply chain components. In a digital supply chain, every activity is able to interact with one another, allowing for greater connectivity between areas that previously did not exist.

Investment in technologies such as artificial intelligence, machine learning and Internet of Things can help companies gain real-time visibility, better manage inventories, improve logistics tracking and make better-informed decisions. These alternatives to often error-prone ERP systems and manual spreadsheets can help businesses predict disruptions and design actionable mitigation strategies.

4. Adopt robust demand planning practices

Traditional planning tries to match demand with supply for the next 30 days. The problem with this process is that a lot of things can change in a month, or even a week. Today’s fast-moving markets require more forward-looking planning to correctly determine demand for future production and identify potential material and manufacturing capacity shortages. Companies should also invest in strengthening their online presence, and focus on quality assurance and delivery timelines, as more and more customers become reliant on e-commerce channels.

Outlook for the future

The COVID-19 pandemic has had significant effects on international supply chains. Going forward, the crisis is likely to give further impetus to trends already underway. More companies are seeking to leverage their production plants outside China or are planning to build production in new locations. The shift to online shopping will accelerate, putting more pressure on companies to meet expectations in an on-demand economy.

When planning ahead, timely, relevant market intelligence is fundamental to making complex decisions and embedding long-term strategies.

Access to timely, relevant market intelligence, conducting the right analysis and asking the right questions now, will provide the opportunity to build a robust, agile procurement strategy that minimizes risk and safeguards business continuity, without sacrificing profitability.

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Tavleen Kaur and P Vijay are Research Managers at The Smart Cube

consumer

As Consumer Habits Change, How Can Businesses Keep Up?

American consumers don’t act and buy the way they did just a few short months ago – at least most of them don’t.

The pandemic and the need for social distancing led to an upsurge in online buying. Takeout and delivery replaced, at least temporarily, dining out. Many consumers, worried about the health risks of spending time in grocery stores, turned to services that would do their shopping for them.

Now, as the country tries to reopen and seek the next normal, businesses across the nation must figure out which of those consumer behaviors will become permanent, which were temporary, and whether any new ones yet unthought of might emerge.

“We live in a time when information can become outdated pretty quickly, and that’s become even more true because of COVID-19,” says Janét Aizenstros (www.janetaizenstros.com), a serial entrepreneur and the chairwoman and CEO of Ahava Digital, a company that ethically sources data on American consumers.

“The businesses that are going to succeed moving forward are those that grasp what consumers want and understand their changing habits.”

In contrast, those businesses that fail to understand what the latest consumer data is telling them, and are slow to adapt to the changes in consumer behavior, are going to be at risk, Aizenstros says.

She says going forward, businesses need to:

-Be prepared to pivot. Business leaders must be flexible. Many restaurants figured that out when the pandemic began, Aizenstros points out. Patrons could no longer dine-in, so the restaurants put an emphasis on takeout and delivery services. In the same way, each business will need to figure out how it can adapt and adjust its services or products to meet what customers want and need, she says.

-Gather reliable consumer data. With the internet, social media and numerous other sources, there is plenty of information available today about consumers, but not all of it is reliable. Make sure data comes from a quality source and that it reflects as much as possible the current thinking and behavior among consumers, Aizenstros says. “Businesses that fail to use reliable data and stay on top of the consumer trends,” she says, “will have a difficult time thriving as we go forward.”

-Take steps to make consumers feel comfortable. Even as people venture out more to dine in restaurants or shop in person, a Gallup survey shows they still plan to exercise caution. Businesses can help themselves by letting consumers know what steps they are taking to keep their stores, restaurants, and offices as safe as possible. “This is just another example of understanding and keeping up with what consumers want,” Aizenstros says.

Businesses have always had their plans and operations disrupted by both technological advancements and changing consumer habits. But rarely does consumer behavior evolve as quickly as it did in the early months of 2020 – and the changes didn’t always happen in easily predictable ways.

“Some areas such as home decor and fashion have done well recently,” Aizenstros says. “At the same time, we are seeing trends with businesses like J.C. Penney, Hertz and others struggling and filing for bankruptcy. It’s hard to keep up with consumer thinking unless your data is consistent, relevant and accurate. But if you understand what your customers want and work to give it to them, your business will have the opportunity to prosper.”

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Janét Aizenstros (www.janetaizenstros.com) is a serial entrepreneur and the chairwoman and CEO of Ahava Digital, which provides businesses and investors with ethically-sourced verified data about American consumers. Her background includes roles in finance at TD Canada Trust, Canon, and Brookfield LePage Johnson Controls, along with management consulting in a broad range of functions, such as supply chain operations, data analysis, and strategic thinking. She has a doctorate in metaphysical sciences with a specialization in conscious business ethics.