Paralyzed by the dashboard lights
The opportunity for Small & Medium Businesses in today and tomorrow’s war for talent
00.00.00 March 14tht, 2020: Belgium went in lockdown mode, following or being followed by many other countries.
Only a few days later, hiring freezes and investment stops of all kind were announced by many organizations across the globe.
Dealing with uncertainty – who’s in charge?
One of my key observations, is the huge difference in crisis behavior between stock market driven multinationals versus autonomous small, medium and large local organizations.
Right after March 14, the majority of the CFO’s and finance managers were not capable anymore of forecasting. The dashboards went blind. Instantly and with impressive execution power, multinational “shareholder driven” organizations froze their investments. And hiring plans. Even in companies and industries that were not affected by the crisis, this prudent approach came naturally. That’s the name of the corporate game, paralyzed by the dashboard lights.
SMB’s (small & medium businesses) and local organizations did a much more balanced exercise and acted differently. Obviously numbers and an uncertain outlook played an important role. At the same time, real business discussions, driven by an entrepreneurial leadership popped up. Looking at all aspects of the crisis: What opportunities do we have? Where do we need to adapt our business model? How to be ready when recovery kicks in? What (prudent) investments do we continue to make? Fundamental reflection and agility ruled.
Both reactions are understandable and even logic, looking at who is really in charge: the shareholder or the entrepreneur.
The short, mid and long term – and the winners are?
Short term, the risk taken and the struggle to survive is much bigger in the SMB space. The investment stops of the multinationals even accelerate these risks for SMB’s, in particular for those that are very much dependent on revenue from their corporate customers. As such, a self fulfilling prophecy might be installed, SMB’s being pulled down by corporate investment stops.
From a business perspective, it will be interesting to see what happens in the mid and long term. A forced strong acceleration of, and shift to new business models will definitely shake up “old” practices. As quite often these kind of initiatives are digital driven, they might even disrupt some industries. It already happened in the food & drink industry, where takeaway and online ordering are growing at a galactic speed. I even had to queue in the local “Frietkot” for half an hour last week… while only 2 people were ahead of me. The reason is that my “Frietkot” owner had built an online ordering system and Deliveroo boys were running in and out to pick up their priority orders. Highly creative initiatives are being taken by companies that are under pressure. This business model shift is happening much more and at a different speed in the belly of SMB’s than in corporate world.
Will the financially most fit survive? Or is it the one who is most agile? It might be both. Time will tell.
The opportunity for SMB’s– attracting and retaining talent
People make the difference. That didn’t change and will not change. However generations change.
Gen Z -the current and near future generation of graduates- has different expectations of their employer and life in general. Even more than millenials, they are addicted to variation and permanent learning. The so called “generation impatience” and their DNA will drive them to micro careers. Preferably in the same organization, if not externally. The logic consequence is that both millennials and Gen Z highly value agile organizations that offer regular job content rotation options.
The way organizations are dealing with the current crisis and in particular their attitude towards their employees, is heavily impacting their employer brand. It’s well known that for Gen Z and to a larger extend for millennials, working for organizations that match with their personal values is one of the key drivers in their career. Sustainability and “doing good” is more important to 20- and 30 years old than their more senior colleagues.
Thirdly, there is an increasing cry from people across the globe towards organizations to be socially relevant. A focus on maximizing shareholder value keeps companies financially sustainable, and definitely has an advantage in a crisis period. It might be perceived by employees as a stable employer choice, even. And as such temporary attractive. However, the public opinion and even more upcoming generations have deep down different drivers and will require a different mix of core company drivers.
In summary, there is a huge opportunity today for SMB’s and local organizations to take a major advantage in the war for talent:
Large corporates are in hiring freeze mode, or at least very prudent. Talent is available to you that might not have been before. Go and get it, the war for talent will be there again soon.
The creativity and agility SMB’s have shown in this crisis period is highly attractive for young professionals and fills in a lot of their structural needs. It facilitates micro-careers (project driven) within the same company.
SMB ecosystems are often strongly value driven, because it takes them more efforts to seduce the customers…and employees. So SMB organizations are often more customer AND employee intimate.
As a consequence, developing and putting your company culture forward will play an increasing role in talent attraction and retention. What is your company culture and DNA?