Can companies find their better selves in crises?
I have Jack Ma to thank for introducing me (via the pages of the SCMP) to the thinking of Kazuo Inamori, the Founder of Kyocera Corporation. Mr. Ma, who would know about doing business in recessions having launched Taobao amid the SARS outbreak in 2003, recently spoke about five strategies that Inamori-san had for companies during economic contractions.
These strategies revolve around the idea that recessions can be opportunities for growth. One in particular stands out for me because of its bold contrarianism: “put all your energy into developing new products.”
This is very relevant today. As well as causing human suffering, it is clear that the coronavirus is going to have a serious impact on businesses across Asia and beyond. For as long as it lasts, it will be a significant commercial problem for many companies. But it may also be a strategic opportunity for some to re-think what they offer their clients – and perhaps discover an even better version of themselves.
As Inamori-san said: “This is the time to devotedly work on developing products you were too busy to work on before, or to improve products which did not completely meet customer needs during better economic times.”
Companies from around the world have responded to the coronavirus with great generosity, making large financial donations, offering discounts or free products and services and deploying their resources to support relief efforts.
You could argue that offering discounts and free offers are ethical choices during a crisis, but not a foundation for long term profitability. However, these circumstances are giving some companies an unusual freedom to experiment with and test their propositions away from short term commercial pressures. If they are gaining some new insights into the true value of what they offer customers, then that should actually help them to grow in the future.
For example, if a financial institution is waiving some fees now, would it actually be better for business in the long run to abolish these fees altogether, especially if technology can help reduce costs? If a software provider has been able to adapt its technology offering to support more people working or learning from home during the crisis, is that a long term opportunity to enable people to live more flexibly? If online medical consultations have been popular and effective during the worst phase of the outbreak, does that point towards the emergence of a new healthcare model for the future?
Industry experts will be able to judge better than me whether shifts like this hold commercial potential or not. But they could certainly have the power to enhance a company’s reputation: there can be no better evidence that your business serves society than how you were able to help people during a crisis, so incorporating what you did at that time into your long term business model would clearly strengthen your ability to demonstrate social purpose.
The rare chance that a crisis brings to re-define what a company means to customers and society is closely connected with Inamori-san’s insight that times of economic hardship conceal growth opportunities. The best companies should be able to capture both opportunities; not because they are opportunists in a crisis, but because they have been doing the right thing for society during the worst of times. And that's a powerful story.