At Chief Outsiders, we use the phrase “Building sustainable engines for growth” as our goal is to build an asset that can drive revenue today and be monetized by investors tomorrow.  Unfortunately, many companies’ engines have been shut down because of the global pandemic as customers have stopped buying due to choice, circumstances, or government decree.  Restarting those engines is not as simple as just turning a switch back to “ON” – at least it shouldn’t be.

Some 3-4 weeks into lockdown, most private equity investors have triaged their portfolios and built survival plans focused on cutting expenses, delaying payments, securing new capital, reducing workforces, and accessing government programs where possible.  Those lucky enough to have portcos with products/services that have seen a surge of demand during the current crisis, have ramped up near-term production to take advantage of the surge.  Smart investors have started to turn to what it will take to restart commercial engines once the economy is able to reopen. I fear that too many Private Equity investors and the CEOs who run their companies will remain solely focused on the financial and operational aspects of their commercial engine restarts, while missing the go-to-market implications.

A recent piece in The Harvard Business Review provides a good overview of some of the things company CEOs should be thinking about as they restart their commercial engines.  Titled, “Preparing Your Business for a Post-Pandemic World”, authors Carsten Lund Pedersen and Thomas Ritter present some “steps that organizations should do to lay the groundwork for their recoveries now.”  They present several questions as a guide.  Number 1 on their list is “What position can you attain during and after the pandemic?”

I love this question as it gets to the heart of the thinking required to be successful in a post-pandemic world.  I’ve put together my own set of questions Private Equity investors should be pressing their CEOs to ask and answer when preparing to restart their commercial engines.  Unfortunately, I’m not seeing this happening enough – at least not at this point.  In my opinion, that's not only a missed opportunity to get off to a fast restart, it also represents tremendous risk to future investment outcomes for investors.

At a minimum, Private Equity investors should be pushing their companies to address these two critical areas to protect the health of their investments:

Markets and Customers: it’s all about emerging in a stronger competitive position with deeper customer relationships and reinforced customer relevance.

• What’s changed about how our customers want to interact with and buy from us going forward?
• Are our communications strategies still appropriate? Are our messages simple, empathetic, relevant and clear?
• How will our markets be different post COVID-19? What new competitors will see opportunities to enter, and where can we take share from traditional ones?
• Are our products and services as relevant and valuable to our customers as they were before?
• Have changes in the market and customer behaviors opened opportunities to target new customers we couldn’t before?
• Do we have core capabilities we can deploy in new ways to offer new value to our customers?
• Is our pre-COVID sales model still appropriate in a post-COVID world?
• Is our pricing model still appropriate? Do we have the right price-points?

Organizational Readiness:  the team and structure that got you here may not be as appropriate for the future when viewed through the lens of changing market and customer dynamics.

• What skills and experience are most critical to address the changes in market and customer dynamics, and how does the current team measure up?
• Do we have the right ecosystem of employees, agencies, and consultants to allow us to quickly adjust and navigate what’s next?
• Do we have the right level of thinking to allow us to plan to act differently or are we geared only to do things the same old way?
• What technologies will be required for the future, and do we know how to acquire, integrate, and use them effectively?
• Are our digital marketing and e-commerce capabilities appropriate to meet changing customer needs? If we’re behind our competitors, how can we catch up?
• Can customer service teams communicate seamlessly in multiple environments; remote and in-person?
• Do we have the right level of automation to streamline our approach and allow us to move quickly?

These are a baseline of the questions CEOs and their teams need to ask instead of falling back into the old ways of doing business.  It’s up to boards and investors to help their companies see the new world and what’s required to win in it.  I fear that too many will be disappointed in the results if they don’t.

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