The foodservice industry ― and the greater economy for that matter ― continues to reel in uncertainty since March 2020. In spite of an alarming array of surrounding factors, such as a global pandemic, skyrocketing unemployment, dismal wage growth, plummeting consumer confidence, and escalating poverty rates, the S&P 500 and the Dow Jones industrial average continue to reach historic peaks.
Yet the future of the Federal Stimulus Bill, the 2020 Presidential Election, and the potential development of a vaccine all contribute to ongoing market unpredictability.
We wrote last fall about the debunking of the Phillips Curve, which had been a cornerstone of correlating employment to inflation. It, like Keynesian Economics, have become historical relics in the new century. Will we see the same become true of GDP’s positive correlation to the equity markets after the pandemic?
While all these unknowns have forced many of us to ditch our pre-pandemic 2020/2021 strategic plans, there are still ways for management to strategize and plan during this new “uncertain” normal. In August, we wrote that a majority of consumers will not return to a restaurant until there is a vaccine, so what can food companies do when there is so much unknown? We have five ideas.
Prepare for Multiple Outcomes
We are strong proponents of scenario planning at FSIP. We urge firms to make multiple guesses of what is most likely to happen as opposed to making a single “best guess.” Planning for multiple outcomes fosters innovation and ingenuity. For example, don’t bet everything on a single pack size, format, or brand without having other capabilities at hand.
Stick to What You Can Predict
Ask yourself, “What are we certain that will happen with our customers, competitors, and the market?” Chances are, there are a number of things that will surface. Prioritize those you can predict, and work the unpredictable outcomes into the first idea in this blog post.
Evaluate Steps in Implementation, Not Just the Results
This may seem counterintuitive to strategists (because, well, it is). Randomness, associated with Covid-19, will confound even the best efforts to produce results. When assessing an initiative’s success, consider the quality of the decision to undertake it.
Strong leadership teams and flexible organizations understand the need for a proven process, but will also recognize small gains (such as new skills developed by staff members), even if the outcome is not ideal. Reassess, adjust and execute. Repeat.
Remain a Stubbornly Agile and Flexible Culture
With Zoom meetings replacing boardroom discussions, firms may fall victim to “groupthink,” where ideas are incubated internally without external evidence. Use data to create simple statistical models in the pandemic climate, instead of more complex frameworks.
Simple models allow for a broader room for error and therefore, ideas, that will help teams collaborate on potential options and to switch gears quickly. The firm with a common purpose is a happier team.
Stick to Your Firm’s Purpose and Mission
It is easy to become all things to all people in the pandemic. For foodservice manufacturers, retail is looking attractive at the moment, but what is the risk involved in acquiring assets or organically creating a retail division? We have written that the cost of acquiring a new customer is 25 times more than keeping and growing one.
The final point of this exercise is to avoid “running really fast without a destination.” While the pandemic is changing the structure of the macro-economy on a daily basis, firms are not powerless. Sticking to what is predictable, a firm’s purpose, and listening to stakeholders will help companies remain stable as the tides shift.
If you are looking for a fresh strategy, please see our services for Covid-19 planning.
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