Resilience Beyond COVID: Digitalizing Your SME Comeback as a CEO
If you are a CEO or owner of a small business or mid-size enterprise (SME or SMB), you are among the millions “fire fighting” to keep your business afloat due to COVID. Finding ways to retain customers and staff, as well as ensure enough cash flow to continue operating fills every waking moment.
Digitalizing your business couldn’t be further from your mind right now. Yet, a digital-first mindset may well be the leverage you need to push for a comeback.
The Critical State of B2B SMEs
There will always be winners and losers in every crisis, but the COVID shutdown has particularly been lethal for small to mid-size businesses or enterprises (SMBs or SMEs) in the B2B sectors. It has also shown up stark and uneven vulnerabilities among those not able to leverage digital technologies quickly enough.
Digital transformation has been bandied about for a long while now, and some companies have made strides, including tech-oriented SMEs. But for their non-technology counterparts, the call for digitalizing operations has largely fallen on deaf ears.
A 2019 SME survey on Going Digital of five European countries showed that two-thirds of SME bosses did not consider digitalization a top priority.
This sorry state of affairs is now seeing repercussions, and it is due to one thing and one thing only: the lack of a digital-first mindset. I may be simplifying but if you see what’s going on in this shutdown, it boils down to that.
Hopefully, the crisis has led to a re-think of strategic priorities for B2B SMEs and their bosses.
The “Digital Zootopia” of B2B SMEs
Several countries are planning to lift the lockdown in different stages and with different measures in place over the next few weeks.
However, if there’s one thing we can be certain of is that the world, which greets us out of confinement, will be very unlike the one we remembered “leaving”. Customers will be extremely prudent, buying only what they need to run and generate income immediately. Markets will have shrunk drastically, all except those dealing with the essentials of COVID and its fallout or longer-term projects.
In this climate, B2B SMEs will need to be even more creative, agile and resilient to mitigate the volatility of an accordion-like economy. Whatever strategy being formulated will need to allow for fast or innovative pivots, not only to sustain through the COVID fallout, but also to prep for a brighter future beyond.
One major leverage for a resilient and agile strategy is to go digital. For this to happen, SME leaders must, first and foremost, debunk unrealistic hang-ups and long held limiting beliefs. Then, carving out a solid digital-first strategy that works to their context will be a critical step forward.
There are generally three categories of such SME bosses: digital ostriches, digital moles and digital lemmings.
Digital Ostriches bury their head in the sand, refusing to face up to the realities of a digital economy. They fear technology and what they believe to be negative implications such as killing precious jobs. But what they fear most is seeing the business they understand radically change into one they don’t and cannot control. The COVID economic contraction may finally force their heads out of the sand.
Digital Moles are somewhat similar but unlike Digital Ostriches, they only see things they want to. Trapped in a tunnel vision, they decide digital is just “much ado about nothing”. Their customers are happy; their businesses are stable and growing; why bother rocking the boat at all; but that was before. The funny thing with change is that it’s always a lot more disruptive and costly when it’s imposed rather than embraced.
Digital Lemmings on the other hand, are switched on. They know digitalizing will make them more competitive, especially for export. The same European survey reported that 60% of SMEs had already started on some digitalization. However, their challenge ranges from inadequate capacity or skills to competing resources, or worse – an inappropriate strategy. Their good intentions get waylaid as implementation starts and stops, is incremental at best and never quite achieves full potential.
Turning the situation around will depend on the extent these bosses will galvanize into taking back control to build resilience into their survival and recovery strategy.
If you are among them, you will want to get strategic support from outside experts. Having worked with startup and SME leaders, believe me when I say it is not easy to do this by yourself. You may feel lonely bearing the heavy burden of your company and the people who count on you, but you don’t have to be alone in finding the right solution for a comeback.
Often enough, critical change is propelled by a sense of urgency and an external trigger. The COVID pandemic serves its purpose on these two counts. But the only way to counter its negativity is to regain real control with self-empowered positive triggers.
If you are with me so far, read on.
Disrupt Yourself as CEO
Ironically enough, a digital-first mindset is really about customer-first continuity.
Digitalizing is the only sure way to continue operating and delivering value in a volatile market. With well-coordinated digital processes, your company’s resilience and agility to engage and retain customers, acquire new ones and expand market horizons in this new normal will grow in leaps and bounds.
This starts with thinking “customer”.
Most of you will say that you already do, and it’s true. It’s very rare that SMEs don’t put their customers first. It’s usually their biggest strength and value as compared to big business.
However, what I’m alluding to is the understanding of how customers have evolved in their behaviors, habits and expectations. They are digitally savvy and increasingly digital-first as consumers and even business buyers.
In a Salesforce report, B2B buyers (80%) were found to be a lot more demanding of prompt responses and real-time interactions from the vendor than consumers (64%). In social isolation, this will be the case even more with prolonged online connectivity.
The same report also revealed that 82% of business buyers seek the same buying experience they get as a consumer. 69% want Amazon-like purchase experience. Yet only 15% of SMEs sell online while less than 30% of B2B buyers say they get excellent customer experience (CX).
Overall, more than 75% of customers expect companies to anticipate their needs. This is easily one of the most important things to note if we consider that 80% of buying decisions are made way before the first sales contact is made.
On top of that, with B2B buying, its often a longer decision-making process that typically involves engaging and convincing three to seven key stakeholders at least. So they all have to be taken into consideration when creating customer touch points.
Therefore, the post-COVID SME comeback requires a different kind of CEO – one who stands for Customer Excellence Officer.
This is a chance to re-think your role and disrupt yourself as a business owner or shareholder CEO. Re-invent yourself into a digital-first CEO – i.e. a Customer Excellence Officer who drives customer experience (CX) optimization.
What will you do then? Where to begin? The answer really depends on what you want to achieve in the next 6-12 months, where your company stands and how adaptable your business can be.
Looking at 5 strategic axis will help inform your comeback strategy as a digital-first CEO.
5 Axis for A Digital-first CEO Strategy
1. Digitize Your Customer Intelligence
The more you know your customers, the more effective your digital-first strategy will be. How is your customer data gathered, stored and shared? Does it help answer these questions and more?
What is the portion of your loyal and recurrent customer base and who are they?
How do they buy and how much do they spend?
What keeps them coming back for more and why?
What is your portion of new or one-time customers and who are they?
If your product line were not to exist, who would they buy from and where?
More often than I care to see are SME bosses who keep all their customer contacts in an excel sheet on their desktop or a company server while most of the intelligence is stored in their heads.