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New Zealand has just left our Covid-19 lockdown, but is now facing a massive global recession. Riding out the recession and its fallout will be more challenging and painful than spending two months at home.

When threatened a hedgehog curls into a ball until it feels safe to come out. As a business owner I can sympathise with this approach - when danger threatens protecting your soft parts and waiting for safety feels like a good option.

The hedgehog’s response served it well for millions of years - right up until the invention of the motor vehicle. Suddenly curling into a ball is the worst thing that a hedgehog can do and millions of them have paid the price.

There’s a popular notion that some hedgehogs have learnt to run from logging trucks rather than curl up. While the science is inconclusive, there has been a recorded decline in hedgehog roadkill and anecdotal evidence that more and more hedgehogs are running from vehicles.

So as a business owner, while it does feel safe to curl up we have to remember that sometimes it’s better to keep moving. As a member of Generation X I’ve been through a few recessions and know that what can feel like the safest option can bring the worst long term outcome.

There’s an excellent article in the Harvard Business Review that looks at business responsive vs performance during recessions. Even though it’s written 10 years ago much of it rings true in the current situation:

Almost all business leaders reluctantly admit that the current crisis also marks an inflection point: The world after it is unlikely to resemble the one before it. Their priority, when they get a moment’s respite, must be to remake their organizations to cope with the “new normal.” But CEOs, like generals in the heat of battle, are so busy tackling short-term priorities that the future is obscured by the fog of war.

It’s generally known that slashing staff and services in the face of a recession is a terrible long-term strategy. On the flip side over eager investment doesn’t do a whole lot better - especially when trying to change too much at once. The successful approach is in the middle ground with a good dose of strategic smarts.

Choosing the direction the business will pivot to face new threats, and implementing the new approach in the most efficient way possible, are all good keys to success.

Paul (my business partner) and I have been talking a lot of strategy over the past few months. On one hand we are fortunate to have a business experienced in delivering digital transformation, at a time when that concept is key to the new way of doing business. But on the other hand a recession is a recession and it’s hard to know what’s around the corner.

In the end we decided to expand our workforce and continue our focus on app development, high quality business websites and improving audience engagement. Hiring new developers meant I can focus more on creating solutions without having to juggle the delivery as well. It also upped our skill coverage around app development, which has been where a lot of UpShift’s growth is. Many of our app projects involve taking manual business processes and transforming them into digital tools.

We’ve seen a number of our clients rise to meet the challenge including actions like:

  • Moving retail staff from bricks and mortar to e-commerce support.

  • Identifying and developing new markets.

  • Building new audiences.

  • Reviewing the company response to the Covid-19 lockdown and implementing changes based on those findings.

For these sorts of transformations a top down approach works best. Identifying the path the business needs to take and developing strategy/actions to get there. A pitfall to avoid is starting with actions to “do something” without any firm direction. A clear path also helps focus what parts of your business you should invest in. While improved efficiencies help businesses weather downturns cutting too many corners can damage the ability to change.

Back to the hedgehogs, running is only a good option if your path takes you out of danger.

As the eighteen wheeler of Covid-19 crested the horizon we decided to pick a direction and run. Listening to our expanded dev team working happily away on one of our latest client projects I’m glad we didn’t curl up. Even if I’m still not sure what else is coming down the road.

 

Banner Photo by                                     Orlando Leon