How to Reimagine Your Business in These TimesSenior Fellow at Northwestern University’s Kellogg School of Management
Eight months into the COVID-19 pandemic, companies are having to make the adjustment from assuming this was a short-term challenge to realizing that there may never be a return to pre-pandemic life as usual.
Sanjay Khosla is a senior fellow at the Kellogg School of Management at Northwestern University, where he teaches marketing. BRINK spoke to him about how business practices are likely to change.
KHOSLA: I expect that, in the future, when there is a COVID-19 vaccine, we will go to a hybrid model. I will give you an example. We had what I call a Discovery Workshop scheduled in Shanghai in July 2020, with participants from about 15 countries. We conducted this workshop digitally and remotely, and it worked extremely efficiently.
What is interesting is that the follow-up Discovery Workshops are now all being planned remotely, even if travel resumes. Because the digital workshop was so efficient, everyone said, “Why don’t we just continue doing it this way?”
But the reason I say “hybrid” is that humans also crave social interaction and connection. So, there will be a bit of both. In my own work as an executive coach and advisor, I’ll probably do a mix: a bit of travel, but a lot of the work will be done remotely. That’s really the assumption that I’m making.
BRINK: Were these kinds of forces of digitization already happening anyway in society?
KHOSLA: Absolutely. Digitization as a force was coming through anyway. This crisis simply accelerated it. As one company’s CEO said to me recently, “What people had planned to do in terms of digital transformation over the course of five years took only five months to implement.”
Also, globalization as a force was already there. What COVID-19 introduced is a high degree of uncertainty. I am currently learning a lot working with a number of companies to exploit growth opportunities in this GUD (global, uncertain, digital) world.
A Moment of Opportunity
BRINK: Obviously, for a lot of companies, this is a moment of great difficulty. Yet, you talk about it being a moment of opportunity. How do you get leaders to see this as a moment of opportunity when they might be facing severe economic challenges?
There is no going back to normal after the coronavirus pandemic ends, so how do we use this crisis as a business opportunity?
KHOSLA: Probably the best way to answer that question is through an example. One of the companies I’m an advisor to is an apparel company called Eberjey, which is based in Florida. I’ve been working with them since November 2019. Eberjey is a successful company built by two female co-founders 25 years ago. Then, COVID struck. Stores closed. The wholesale channel closed. I get a call from the two founders in panic, saying, “Gosh, what do we do? Cash is drying out. All our work of 25 years has gone.”
The first thing we did with Eberjey was a Discovery Workshop. We have been doing these workshops for many years. A key to a successful Discovery Workshop is a positive can-do attitude and answering the questions: So what? Now what? Who does what by when?
With Eberjey, we decided to focus on e-commerce and pajamas, which had growth potential and margins. And we decided to dream. The dream was to double the e-commerce business in three months. When we came up with that, there was a lot of skepticism.
Dream, Learn, Do
KHOSLA: It takes the same amount of effort to dream big as it does to dream small, so you might as well dream big. Dreaming big forces teams to do things differently, and not just continue with business as usual. We’ve been using a “dream, learn, do” model for some years, and we’re finding it extremely relevant in today’s world. After agreeing on a dream, it is important to learn from wherever you can. From within the company and outside the company. Over the years, we found that there are certain practical lessons in doing these Discovery Workshops. Let me highlight three lessons:
Focus on what you can control: The first lesson is to focus on what you can control and where you can win.
70% alignment/100% commitment: The second practical lesson is what we call 70% alignment/100% commitment. If you get 70% alignment, you actually encourage people to come with different points of view. However, at the end of the workshop, there must be 100% commitment. One team, one dream, one plan.
Focus Five: The third practical lesson is to summarize the five things you all agreed on in the workshop. So, everyone is behind that particular Focus Five, even though you may have had different views before. Even if somebody who was not in the workshop asks you afterward, “So, what happened in your workshop?” you have that Focus Five in front of you and saying, “These are the things that we are all committed to do.”
Spend More Time on Doing
KHOSLA: With Eberjey, by using this approach, the e-commerce business grew in three months by 250%. This is just the start of a journey. Now the question is, what’s the plan for the next few months with stores opening up?
BRINK: What about the “do” stage? What does that involve, and why does that require 90% of the effort?
KHOSLA: Success is 10% strategy and 90% execution. When we study a lot of companies, we find that they’re spending a lot of time on strategic planning and not enough time on doing. So clearly, it’s important to get everyone aligned behind where you want to focus on, but then the idea is to make it happen. However, if everything is going well, something is wrong. Failure happens. The idea is to fail fast, fail small, learn and move on.
Success Through Failure
KHOSLA: In fact, one exercise we’re doing with companies is not just celebrating successes, but actually structured programs on learning from failure. Of course, the role of the boss here is important, because you’re creating an environment where people need to be able to speak their minds, take risks and fail. The only way to succeed is to fail occasionally. There is no going back to normal, so how do we use this crisis as an opportunity?