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August 24, 2020 | 6-minute read (1007 words)
The business world is vastly different today than it was a year ago, and most of that change can be attributed to the impact of the coronavirus pandemic. Although the virus has affected some businesses more than others, everyone in the industry has felt at least some impact from COVID-19 — but not all of the news is bad. In fact, some leaders are pointing to the important lessons that have come out of the experience.
Check out how three CEOs say they’ve learned what’s important as a result of the pandemic.
1. There’s a Big Place for Small Businesses
Ace Hardware recently achieved record financial results, and that makes CEO John Venhuizen more aware than ever of how hard his team works. “It would feel like an act of ingratitude for me not to thank the Ace team for these incredible results,” he said during an interview with CNBC. “Their grit, their determination and their servant hearts made this what was arguably the most difficult, unusual, and yet perhaps rewarding quarter in Ace’s 96-year history. Ace shines brightest in the darkest hour.”
The company identified three drivers of what led to a strong quarter, starting with the fact that people were home and used that time for home improvements. The second factor was that many discretionary dollars naturally shifted to essential businesses. “That was both a blessing and a burden,” he said. The burden was that it strained the systems, supply chains and people. Because Ace considers protecting its people to be a paramount concern, the burst of volume in a small amount of time during the pandemic led to a “fatigued and fragile work force,” he said. “They don’t get to work from home. They’re essential.”
The third factor was that the company had excellent execution in place to ensure the safety of employees and customers, while also driving the firm’s strategy of delivering service, convenience and quality.
“We are a David and Goliath story and there’s no question that we are David,” Venhuizen said. “We represent small, mostly family-run businesses around the world that in aggregate are strong, but they're really small family businesses. And I think the results from the last quarter are a testament that there’s a place for the little guy, even though the Goliaths of the world are getting very, very large.”
2. Things That Weren’t Priorities Have Risen to the Top
Because movie theaters inherently serve as gathering sites for large groups of people, they were among the hardest-hit businesses during the pandemic. But the coronavirus-linked closures across the industry led to some important insights, said AMC Entertainment CEO Adam Aron during a talk with CNBC.
“We are very strictly limiting the supply of seats because we are taking social distancing very seriously,” he said about the firm’s commitment to safety when it reopens. “So when we open our doors, we’re not going to sell more than 30 percent of our available seats. We have a whole host of initiatives underway to make sure we operate our theaters safely and cleanly. It’s only when we can guarantee the public that they’ll be safe to come to a movie theater will we actually smile and take a breath of relief here at AMC.”
The firm has been working since March to determine what it would take to safely and responsibly open. The company worked with organizations like Harvard’s School of Public Health and The Clorox Company to integrate things like filtration filters, HEPA vacuums, electrostatic sprayers and sanitizers, among other things. “I actually think our theaters have never been cleaner,” Aron said. “I think dirty movie theaters are something people have been anxious about for decades. Well, not anymore because we simply cannot afford to operate our theaters unless you can eat off the floor. We know how important it is to the public and to the future of our company to operate these theaters safely, cleanly, and that is AMC’s commitment.”
The fact that the chain recognized the importance of cleanliness may have been on leaders’ minds for a while, but that priority has clearly risen to the top of their to-do lists in today’s environment.
3. It’s Important to Recognize Areas of Opportunity
Many people were surprised when Starbucks completely shut down its café-only restaurants for two weeks in March to reconfigure processes in line with the COVID-19 requirements, but the firm used that time to make some important strategic decisions, said Starbucks CEO Kevin Johnson during a CNBC interview.
“Back in March when we were working to close our stores and provide economic certainty for our partners and take care of the front-line health care workers, we put people over profit, and so certainly we think that was a very, very important thing to do because it reinforced our mission and our values and it built trust.” During the closures, the company helped create new operational strategies that would allow it to operate safely and “future-proof the company,” he said.
“We looked at what COVID-19 has created in terms of disruption and consumer behavior, and figured out how to accelerate initiatives that we already had in our strategy, but we’re accelerating those to really position Starbucks to better serve customers, not only in the COVID-19 world, but beyond.”
The drive-through stores in suburban markets, for instance, are performing extremely well because customers want safe, convenient and familiar experiences. So the company has determined how it can do that in urban environments, such as enacting programs like building more Starbucks Pickup stores, which have smaller footprints, are geared toward mobile ordering and are very convenient. These will be within a three- to five-minute walk of traditional Starbucks stores so consumers can choose whether to sit in a café location or to just visit a pickup store.
That underscores Starbucks’ ingenuity, showing how the firm swiftly pivoted to meet new needs while staying true to its mission and commitments.