This Mindset Is Essential for Successful Business Comebacks
As we seem to be stuck in a chronic game of “Ready. Set. Wait.” while our local and national leaders decide how to move forward in the new normal, we have two choices to make:
- Hunker down and hold tight to what we have so we can resume the life we once knew when the storm passes.
- Focus on improving what we have, look for opportunities, and prepare for growth so we can hit the ground running and operate even better down the road.
When nothing is certain, it seems certain that the first choice of hunkering down makes the most sense: Hold on to what you have so you don’t go under when the ship starts to sink. After all, playing it safe is better than risking it all.
If the above is how you are thinking, think again!
The first approach is that of a Fixed Mindset, and the second reflects a Growth Mindset.
Which of these mindsets you apply to your marketing and business operations as you face the challenging environment in which we operate now will determine if you succeed or fail. It’s really that simple.
Historically, the companies that succeed through tumultuous and uncertain times are those with leaders who have a common characteristic associated with a growth mindset: psychological resilience.
Wikipedia describes psychological resilience as follows:
The ability to mentally or emotionally cope with a crisis or return to pre-crisis status quickly. ... Psychological resilience exists when people develop psychological and behavioral capabilities that allow them to remain calm during crises/chaos and to move on from the incident without long-term negative consequences.
While many may argue whether resilience is a trait we are born with or a learned skill, I am going with renowned psychologist, Stanford professor, and author of “Mindset,” Carol Dweck, who claims resilience is a skill, not an innate human trait. Dweck maintains that resilience is part of a growth mindset which is grounded in the belief that hard work, dedication, one’s intelligence and ability to overcome challenges can result in great accomplishments.
The fixed mindset believes your abilities are fixed, so you stick with what you have, and you believe your potential is predetermined by circumstances beyond your control. As a result, you don’t sharpen your skills and ability to identify opportunities, improve efficiencies, and make futuristic decisions vs. short-term choices.
When you look at companies that rose above past recessions stronger and better than competitors, creating and executing growth plans was the primary difference.
An article in the March 2010 edition of the Harvard Business Review, Roaring Out of Recession, reviewed winners and losers from three previous recessions—1980, 1990, and 2000—and found that businesses lead by a growth mindset rose above competitors substantially. In fact, their studies show that only 9% of businesses monitored survived and actually grew coming out of a downturn, 80% failed to achieve their pre-recession levels within 3 years, and 17% failed altogether.
What about that 9%? These were the companies leading with a growth mindset that balanced offensive actions, such as improving efficiencies and seizing new opportunities, with defensive tactics of cutting back on costs to prepare for the worst.
What they did:
- Kept and even added staff instead of letting people go
- Remained committed to marketing programs
- Invested in assets for long-term growth
As a result, these 9% came out stronger than before. Office Depot vs. Staples is a prime example offered in the HBR article:
Office Depot cut staff by 6% in order to cut losses for the near term. Staples hired more staff and looked for opportunities to improve operational efficiencies and invest for the long term. As a result, Staples’ sales were doubled at the end of the 2000 recession and were substantially higher than Office Depot’s sales, which were billions ahead of Staples before the recession.
Lessons learned from the HBR study, and the impact of a growth mindset vs a fixed mindset, include:
- Maintain marketing programs and brand presence during uncertain or down times so that when purchasers start purchasing again, they think of and come to you first. Keeping your brand presence alive is key to letting customers and influencers know you will be around when the dust settles.
- Reduce operational costs not staff. Doing so sends a signal to all employees that you are committed to the value they add which in turn increases their creativity, drive, and contributions at a time these attributes are needed most.
- Invest in assets you can likely get for lower prices due to the recession to save money. This way you will be ready to respond to future opportunities quickly, and enjoy higher profit margins while others are scrambling to catch up.
Staying the course and believing in your business’ ability to reinvent, reinvigorate, and rise is perhaps the most important strategy you can execute while our communities juggle the pros and cons of getting back to the old normal or the new normal, whatever it may be. If you lose customers now and have to start rebuilding your base when the recession is over, you will have a very hard time catching up with those that managed to keep their base and grow incrementally.
Jeanette McMurtry is a psychology-based marketing expert providing strategy, campaign development, and sales and marketing training to brands in all industries on how to achieve psychological relevance for all aspects of a customer's experience. She is the author of the recently released edition of “Marketing for Dummies” (Fifth Edition, Wiley) and “Big Business Marketing for Small Business Budgets” (McGraw Hill). She is a popular and engaging keynote speaker and workshop instructor on marketing psychology worldwide. Her blog will share insights and tactics for engaging B2B and B2C purchasers' unconscious minds which drive 90 percent of our thoughts, attitudes and behavior, and provide actionable and affordable tips for upping sales and ROI through emotional selling propositions. Her blog will share insights and tactics for engaging consumers' unconscious minds, which drive 90 percent of our thoughts and purchasing attitudes and behavior. She'll explore how color, images and social influences like scarcity, peer pressure and even religion affect consumers' interest in engaging with your brand, your message and buying from you. Reach her at Jeanette@e4marketingco.com.