As we tentatively cast our eyes toward a new future, it is critical for leaders to pause and reflect on the lessons learned from COVID-19 and its ensuing global turmoil. We call on and challenge leaders to consider how their organisation pivoted during this time, and to contemplate the characteristics of businesses that thrived.

Mandy Johnson, co-founder and ex-director of Flight Centre UK and now a best-selling business author, recently shared her perspective with Maximus, on an industry that has been fundamentally disrupted by COVID-19, offering her insight into achieving success during times of unprecedented upheaval.

Here, Johnson’s wisdom – and 20 years of experience as a leader – provides some key ingredients as to what a resilient business looks like.

DIVERSIFY YOUR OFFERINGS

My first thing is that the whole concept of diversification needs to evolve and Flight Centre is a great case study for this. They saw events like the Gulf War that really knocked their Australian revenue and said, ‘We need to diversify’. They took a very traditional approach and diversified into other countries, which, when SARS hit, was really good because even though Hong Kong and Canada were wiped out, Europe was still fine and South Africa was fine, and so their revenue took a hit, but they were still ok. But now, having all your eggs in one industry basket can be the death of you. With COVID-19 all [of Flight Centre’s] eggs were in the travel basket and travel died, except for the bike business.

When Flight Centre bought 99 Bikes there was some bad press. Whenever you diversify outside your core product, you tend to be seen as nuts by conventional thinking. The CEO’s son and the CEO Graham Turner are both mad mountain biking fanatics. His son decided that he wanted to start a bike shop. He said traditional bike shops are run by bike experts, and most people feel intimidated about going in. So, he thought about the Flight Centre-isation of bike shops – it would be the family version of bike shops and you’d have one on every street corner. He started up two or three, and after about five years, Flight Centre bought the business.

They’ve expanded a lot and now have over 35 stores – they also bought a bike wholesaler because they couldn’t supply enough from the overseas supplier. So, from the minute COVID-19 hit the whole business has just gone off – and the lucky thing was they had their own wholesaler as well. That has been an absolute boon for them.

Diversification into other areas and industries is going to be quite crucial, whereas that was never necessary in the past.

CHANGE THE PARADIGM, NOT THE PRODUCT

The other thing is elasticity: the ability to ramp up and ramp down quickly. I think that’s going to be absolutely crucial, and it’s something that hasn’t really been thought through in traditional businesses.

Elasticity can be in anything: in costs or services, products or people. Dark kitchens are a classic example. Good restaurants with great names suddenly being able to run dark kitchens or swivel to takeaway offerings. – Gerard’s Bistro in Brisbane did this, where they were creating beautiful food but delivering it like Hello Fresh. Much like the gin factories that started making hand sanitiser, or the car manufacturers who started making face masks.

If you look at the businesses that are successful now, they are the ones that are changing the paradigms. In the past, businesses just tinkered with products. So, with cars you might make a better headlight… If you look at streaming of films rather than renting videos, the product stayed the same but the whole paradigm of delivery changed.

This kind of strategic thinking is vital now because as well as increasing external threats, business lifestyles have also changed dramatically. In 1950, the life expectancy of a firm in the Fortune 500 was around 75 years. By 2001 it was less than 15 years. Today, the life cycle of any product or service is estimated to be about 5-7 years. (Deloitte’s Center for the Edge research.)

BE AGILE, NOT PERFECT

Owner managers who have not been pivoting well are the perfectionists. You know there’s that saying, ‘Agile, not perfect’? They go, ‘Oh, we want to pivot but this, this, this and this needs to happen first’. Actually, if you are making hand sanitiser, whack a label on it and put a note in the box saying, ‘Sorry about our slightly dodgy labels, but this time we couldn’t print overseas’.

My husband and I call it jumping off a cliff. At the start of every year we ask ourselves, ‘What are we going to do this year that’s going to throw us out of our comfort zones, make us feel really uncomfortable, but that’s going to grow us?’ We’ve found that to be a really useful strategy. Instead of doing the same old same old, you’re always moving forward.

LEVERAGE THE EXPERTISE OF OTHERS

The other thing for business leaders is really looking hard at the people you surround yourself with. I think this is going to be important – getting sounding boards that are outside your tent. You get experts in their fields, who meet with you once every eight weeks, and you run by them what you’re doing. They’re outside the tent and they’ll go ‘What about the grain prices? They are dying over in WA. That’s really going to hit your blah-blah-blah’.

If the information you’re putting in is wrong, you can’t make good decisions based on it. You’re inside the tent so you just can’t see it. Competent people who are experts in their field will speak up without fear. They won’t just tell you what you want to hear.

This interview was conceptualised by the team at Maximus appearing in part in our special edition of M Magazine: Black Swan.
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