A key question for start-ups: how strong is your business model in the current market situation?
The start-up world has suddenly changed. While increasing user numbers or revenue growth is still important, it is currently losing importance if short-term liquidity can no longer be guaranteed. The hype "growth without concern for financial losses" must necessarily be replaced by a solid business model. The current crisis is moving the actual business back to the center of attention - not only for start-ups - because investors are once again becoming more critical in their evaluations. I experienced and successfully managed the same situation after the dotcom crash in 2000 as a member of the board of a globally operating company. How and with which actions I turned the loss caused by the crash into a respectable profit, as well as the insights I gained from it, I am happy to share with entrepreneurs and investors. Do not hesitate and get in touch with us.
The corona pandemic reinforced trends.
Overnight, "the mousy" digitization and thus new digital solutions became a subject of vital importance to many companies in order to react to the new market situation in the best possible way. A functioning infrastructure that enables digital work from anywhere and at any time became an acute necessity as a result of the pandemic. Digitalization is now no longer just a trend topic, but an absolute necessity, thus accelerating development by at least two years.
Even before the crisis, securing competitiveness through greater efficiency was an important issue for companies. However, the current situation has increased the pressure on companies in this area in particular. An increase in efficiency has an enormous economic benefit.
Some work processes will now change permanently across the entire company.
Of course, it is important to act with the necessary sense of proportion. In all efforts to digitise as many processes as possible, it should be borne in mind that the interpersonal component should continue to receive a great deal of attention and not blindly sacrifice all activities to digitisation. In certain areas, direct personal exchange still has a higher quality.
Today more than ever, many companies are challenged to replace inefficient processes with new ones in order to improve their economic and strategic situation in the long term. However, driving digital projects forward is not easy at the moment, as in many companies the issue of cost reduction has become a priority. However, many management boards are currently hesitant to make additional investments. But it is precisely this kind of behavior that can become a boomerang for companies in the long term.
Real leader - or "just" a manager?
In times of crises - no matter of what nature - it becomes obvious who is a real leader and who is "only" a manager. Even if certain trends are difficult or impossible to predict, employees, customers and owners need a solid perspective.
Recent crises have shown that the loss of confidence is extremely damaging, and the turnaround will only be sustainable when trust returns.
In times like these, fear is the biggest enemy of the economy. Most entrepreneurs tend to be cautious and will rethink their original plans or business plan for 2022 and question the planned investments. But precisely this kind of behavior can become a boomerang for the company in the long run.
In our experience, hesitant managers will cause more damage in the medium term than those who take a bold step. Of course, CEOs do not have a crystal ball on their desks, and there is a risk of wrong decisions being made. In order to minimize such risks, and because in today's situation managers face complex challenges, it is advisable to consult a crisis-proven leader. We are here and happy to support you.
Digitization in Enterprises
Digitization has an impact on different levels. Digitization is being driven by technological developments and new digital ecosystems that have an impact on society, politics and the economy. Nevertheless, many companies are still forgetting what digitization is all about: It's about finding a competitive position in the digital age. The results of a study by the Fachhochschule Nordwestschweiz show that the transformation of companies is driven by the need for optimized processes (82%), changes in customer requirements (59%) and new technology (53%).
The effects of transformation are perceptible on different levels:
In almost 85% of SME's, digital transformation has an impact on the business model and internal cooperation.
Almost 70% of SME's believe that digital transformation has an impact on corporate culture.
63% of SME's have already introduced new technologies.
62% of SME's have adjusted their market position
But only 30% of SME's are satisfied with their own digitization efforts.
Digitization in SME's: seven fields of action
The high expenditure of time and the lack of knowledge among managers and employees continues to be a barrier to successful digitization in SME's. The study identified the following seven fields for action in digitization:
Constant customer orientation
New strategies and business models
New approaches to leadership and culture
New technologies such as Internet of Things (IoT)
Cloud & data, i.e. a modern IT infrastructure